Victoria’s electric vehicle tax slammed for ‘putting cart before the horse’

Victoria has been criticised for slamming the brakes on electric cars.

Victoria has been criticised for slamming the brakes on electric cars. Photo: TND

Australia’s largest employer organisation, Ai Group, is urging the Victorian government to put the brakes on its plan to tax drivers of electric cars.

Ai Group chief executive Innes Willox said the proposed charges effectively put “the cart before the horse” and should not be introduced until cleaner cars were more widely adopted.

“Road infrastructure needs to be paid for and it will be important in the long term to maintain the tax base as batteries and fuel cells replace petrol tanks in Australia’s vehicle fleet. But Australia is currently well behind our peers in that transition,” Mr Willox said.

“Our slow uptake of clean vehicles is holding back national progress towards emissions targets – and increasing the pressure on every other part of the economy to deliver cuts.”

His comments come after governments around the world moved to ban the sale of new petrol and diesel cars within the next decade or so.

The widespread adoption of electric vehicles is widely regarded as a crucial step towards achieving net-zero emissions by 2050.

But although Australia’s transport emissions have been rising steadily over the past two decades, and were 33 per cent higher in 2018-2019 than in 2001-2002, the federal government has no specific policies to drive faster uptake of EVs.

And several states beyond Victoria are mulling similar plans to charge EV owners for every kilometre they drive on Australian roads.

Victorian Treasurer Tim Pallas says his proposed tax on EVs will make road charging fairer. Photo: AAP

Mr Willox described Victoria’s plans as a “major disincentive” to EV ownership and said Australian governments had got it completely wrong.

“Now is the time to be helping businesses and individuals access the cleaner vehicles that meet their needs and advance our shared net-zero emissions goals,” he said.

“All sides of politics have the opportunity to develop coherent, and preferably nationally co-ordinated, incentives that are consistent with overall plans for achieving a net-zero emissions economy by 2050.”

Official advice given to the Turnbull government in 2018 found the most effective way of encouraging Australians to buy electric cars was to introduce subsidies that help reduce their upfront costs – something the Morrison government ruled out in its Future Fuels discussion paper.

This is because while electric cars are cheaper to run, only six models in Australia can be bought new for less than $75,000.

But, according to the Australian Financial Review, that might soon change.

The newspaper reported on Friday that a Sydney-based manufacturer had claimed it was preparing to launch a new VW Golf-sized hatchback for less than $35,000.

The brand is Chinese-label BYD, and the local company adapting the cars to the local market is TrueGreen Mobility.

The company’s CEO, Luke Todd, told the AFR the car would be available for Australians to buy online in the first quarter of 2022.

The announcement came after the Clean Energy Council published a study showing that large-scale batteries “are now undoubtedly the best option to meet periods of high electricity demand”.

Gas has often been talked up as the best way of supplying additional electricity when demand is high, such as on very hot days.

But after comparing a new 250MW gas peaker (a power plant that runs during times of high demand) with a 250MW four-hour grid-scale battery, the study found the battery provided cost savings of more than 30 per cent while offering greater flexibility and significantly lower emissions intensity.

“Batteries can provide a premium peaking service in periods of high demand traditionally met by peaking gas plants,” said Kane Thornton, chief executive of the Clean Energy Council.

“Batteries can ramp up quickly, have near-zero start-up time and provide a better frequency response.”

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