MELBOURNE, AAP – Victoria’s new tax on electric vehicles is set for a High Court challenge, with two Melbourne drivers mounting a legal case.
A levy of up to 2.5 cents per kilometre was introduced for electric vehicle users in July this year, but Chris Vanderstock and Kathleen Davis believe the tax is unconstitutional.
Their lawyer Jack McLean filed paperwork with the High Court on Thursday, arguing the State of Victoria doesn’t have the power to impose such a levy.
Section 90 of the Constitution gives the Commonwealth the exclusive power to impose duties and excises and, as a tax on the consumption of goods, Mr McLean says that’s what the electric vehicle levy is.
“I think people will be used to having income tax taken by the federal government, GST and the fuel tax taken by the federal government,” he said.
“There’s a reason for that – the federal government has the power to do so that the state governments do not have that power.”
Ms Davis has been driving an electric vehicle since 2012 and says the tax is a backward step in affordability.
“It punishes electric vehicle drivers and discourages the urgent need to decarbonise,” she said.
Mr Vanderstock believes the state government should switch its focus to getting “dirty cars” off the road instead.
Mr McLean said the tax was “burdensome” and forced drivers to pay the government a fee for every kilometre they drive in their own car.
Victoria is the first state to impose the user-pays style levy on electric vehicle drivers and based on average mileage works out to be about $330 per year.
Mr McLean said that was about $5000 over the life of an electric vehicle, and was an additional cost people would be considering when choosing to buy.
“What this tax does is not only punishes Victorians who have made the switch to electric vehicles, it also massively disincentivises other folks from buying their first electric vehicle,” he said.
He said justification for the tax was that electric vehicle drivers don’t pay the fuel excise, and with an increasing uptake in electric vehicles that revenue pool would decline over time leaving a “hole that needs to be plugged”.
The fuel excise – which is a federal tax of 42.3 cents per litre for petrol and diesel and 13.8 cents per litre for LPG – is pooled with other government funds and divided between the states.
“It’s not true to say the fuel excise pays for roads. There’s a fundamentally erroneous justification for this tax,” he said.
A timeline for the case is expected to be set within the coming weeks and months, but a hearing is unlikely until early next year.
A state government spokesman said they couldn’t comment on the case as it was currently before the courts.