In a landmark judgement that will impact the plans of other state governments to implement a Road User Charge on electric vehicles, the High Court of Australia which found that Victoria’s electric vehicle tax is unconstitutional.
Two private EV owners, Mr Vanderstock and Ms Davies, brought the constitutional challenge in September 2021, arguing that the State of Victoria lacks the constitutional power to levy a road user charge on electric vehicle drivers.
The Victorian Government introduced the tax in July 2021. Electric vehicle owners pay between 2.3 cents and 2.8 cents for every kilometre they drive in and outside Victoria. The EV tax has been described as the “worst electric vehicle policy in the world”, and the Victorian Ombudsman has recently found that the “legislation is being administered unfairly”.
It remains to be seen what impact this will have on national fleets that have been resisting the implementation of electric vehicles in Victoria due to the impost of a road user charge, and a low percentage of renewable energy sources when charging fleet EVs.
David Hertzberg, Senior Associate at Equity Generation Lawyers, representing the drivers at the High Court, said:
“This is a landmark constitutional decision.
“Today’s judgment means that Victoria’s electric vehicle tax is invalid. It also sets a precedent which will likely prevent other States from implementing similar legislation.”
“I am thrilled by today’s judgment,” says Ms Davies.
“Australia is lagging behind the rest of the world on electric vehicle uptake. Now is not the time to be taxing electric vehicles – it’s the time to be doing everything we can to encourage people to make the switch to cleaner cars.
“The Victorian government has been moving in the wrong direction – it went out alone in taxing electric vehicles, and recently it scrapped its electric vehicle subsidy.
“We hope that today’s decision paves the way for the federal government to make coherent national policy which accelerates the transition to electric vehicles.”
Mr Vanderstock, who works as a nurse manager, said: “This is a great outcome not only for Victorian electric vehicle drivers, but for all Australians. Electric vehicles are fun to drive, but they also help decrease carbon emissions, reduce pollution, and improve our health.
“We believe that Victoria’s electric vehicle tax discouraged people from buying EVs, and punished existing EV owners who are trying to do the right thing. It was an ad hoc, piecemeal policy which undermined our collective efforts to reduce emissions from transport.
“We hope that today’s decision is a step in the right direction towards a cleaner, lower emissions future.”
Electric Vehicle Council Chief Executive Behyad Jafari said the High Court ruling would pave the way to better policy across the nation.
“There is nothing inherently wrong with road user charges, but they should never be calibrated to discourage the take up of electric vehicles,” Mr Jafari said.
“The electric vehicle industry warned the Victorian Government this policy was muddleheaded years ago, and the offer has always been on the table to work with the state on a more sensible approach.
“Any road user charge scheme should be national and we now look forward to working with the federal government on sensible road funding reform, without singling out drivers who are trying to do the right thing.
“Any scheme should apply to all vehicles and should take into consideration the economic cost of emissions.
“Australia’s priority should be on boosting the transition to EVs and decarbonising our transport system. There is no need for Australia to be dependent on imported oil today.
“Road funding is also an important consideration for government, but we should approach issues in the right order.
“Allowing states to simply shake down EV owners for a bit of extra tax is a retrograde approach, and I’m very glad to see the High Court slamming the brakes on that today.”
