Electric vehicle drivers in Victoria have gained a significant victory as the High Court deemed the imposed road user levy unconstitutional. As a result, drivers will no longer be saddled with an additional financial burden for supporting environmentally-friendly transportation.
Two Victorian electric vehicle users instigated the legal fight. They argued that the state lacked the authority to impose a road user charge on electric vehicles (EVs) and plug-in hybrid vehicles. Their petition was backed by the Commonwealth, which maintains exclusive rights concerning the levying of “duties of customs and excise” – a power that was indirectly curtailed by the Victorian tax.
This verdict is not only a triumph for EV users in Victoria but could also thwart similar measures proposed by other states. Both Western Australia and NSW, for instance, harboured plans to implement comparable road user charges beginning in 2027.
Presiding over the case, Chief Justice Susan Kiefel, bolstered by Justices Stephen Gageler, Jacqueline Gleeson, and Jayne Jagot, sided with the plaintiffs, Victorian EV drivers Chris Vanderstock and Kathleen Davies. The Victorian State Government bore the expense of the case.
David Hertzberg, a senior associate at Equity Generation Lawyers, reflected on the broader implications of the decision, stating, “Australia is lagging behind the rest of the world on electric vehicle uptake. Today’s judgment shows that taxing electric vehicles is counterproductive. We should be proactively encouraging the switch to cleaner automobiles.”
Indeed the milestone decision has invalidated Victoria’s EV tax and created a precedent that discourages other states from pursuing similar tax initiatives.
An elated Mr Vanderstock, a nurse manager himself, lauded the High Court’s decision. He expressed relief at the affirmation that the tax was a deterrent for prospective EV buyers and an unjust penalty on those who were diligently lowering their carbon footprint. He described the tax as a poorly structured policy that effectively undermined efforts to reduce transport emissions.
Under this tax, EV owners were obliged to annually submit a photograph of their vehicle’s odometer for verification. The repercussions of non-compliance could be hefty, including being charged for a default travel distance of 13,500km or having their vehicle registration cancelled or suspended.
Although initially expected to generate roughly $30 million, the newly-overturned tax has left a revenue deficit for the Victorian Treasurer, Tim Pallas. This lapse could potentially trigger federal implications, as hinted at by Treasurer Jim Chalmers, given the rising numbers of EVs on Australian roads.
The High Court’s ruling has since inspired Greens Leader Adam Bandt to urge the Labour party to discard its plans for a similar EV tax. He suggests that their focus should instead be on making electric vehicles more affordable and accessible. Despite the current average cost for an EV in Australia ranging from $60,000 to $90,000, Bandt remains optimistic, citing that “EVs are already affordable and it’s going in the right direction, but there’s still further to go.”
