Jim Chalmers says future road user charge to ‘focus’ on EV vehicles, not ‘double tax’ on petrol, diesel cars

Jim Chalmers has clarified the pending road user charge will only be applied to electric vehicle drivers and will not be used as a way to “double tax” motorists who use petrol vehicles.

Following Thursday’s three-day roundtable, the Treasurer said there was broad consensus for a tax which would result in EV drivers being slugged with a tax, to make up for revenue lost through the fuel excise for petrol vehicles, currently calculated at 51.6 cents a litre.

The money is used to pay for road maintenance and upgrades, with the fee is automatically calculated into the cost of petrol when filling us at the bowser.

Further talks, including the presentation of an options paper, will occur at a joint state and federal treasurers’ meeting on September 5, following consultation with states and Infrastructure Minister Catherine King.

On Sunday Mr Chalmers clarified the road user charge would only be applied to EV drivers and said it would not a “double tax on internal combustion engines”.

“Our focus in road user charging is on electric vehicles,” he confirmed.

“We are trying to make sure that people who drive EVs, increasing numbers of people who drive electric vehicles are making a contribution to the upkeep of the roads that they use.”

Mr Chalmers added that members at the roundtable flagged questions on whether the rollout of a charge would be staggered or include light vehicles (i.e. cars) from the outset.

“The main point of contention at the reform roundtable was actually whether a road user charging regime focused on electric vehicles begins with heavy electric vehicles like electric trucks and there is some kind of sequence after that, or whether we be more ambitious earlier,” he said.

“I don’t want to predetermine the discussions I’ve had with the states and considerations with our government … but we have made it clear that we do think a change is required here and we will take the time to get it right.”

NSW is the only state which has flagged a road user charging system to hit EVs either by July 2027 or when EVs make up 30 per cent of all new vehicle sales.

Victoria attempted to bring in a similar proposal – calculated about 2 cents a kilometre – in 2022.

But the High Court ruled it as unconstitutional in 2023 and said the excise tax should be in the realm of the Commonwealth.

The Coalition has also indicated support for a levy on EV drivers, saying it will consider the merits of the policy once more details are released.

“Everybody agrees that it is not fair that some road users who fill up their car with petrol and diesel pay the costs of maintaining roads, and some road uses who have an EV don’t contribute to that cost, and so that is an issue which needs to be recognised,” Coalition finance spokesman James Paterson said on Friday.

“We want to see the details here, and it will involve co-operation with the states. It sounds like it’s not something that’s going to come very quickly, but we’ll consider on its merits any proposal that the government brings forward.”