Victorian government to repay electric vehicle owners over unconstitutional tax
Australia's High Court has struck down Victoria's electric vehicle tax in ruling that will almost certainly cancel other state's plans, and pave the way for a fairer, federally-collected scheme.
The High Court, by 4-3 majority, held that s 7(1) of the Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic) ("the ZLEV Charge Act") is invalid on the basis that it imposes a duty of excise within the meaning of s 90 of the Constitution. Section 90 relevantly provides that the power of the Commonwealth Parliament "to impose duties of customs and of excise" is "exclusive" of the powers of the States and self-governing Territories.
A summary of the court's ruling can be found here: hca-30-2023-10-18.pdf (hcourt.gov.au)
The Australian Electirc Vehicle Association has long argued that as the nation's road transport fleet electrifies, the role of fuel excise as a revenue stream will dimininsh, and a universal road user charge should be implemented.
In a media statement, the AEVA welcomed the decision, and encouraged the Federal government to start working on a universal, mass-multiplied road user charge for light vehicles. It argues that a federal scheme would be much fairer and more consistent, while not disadvantaging those who choose to drive a vehicle powered by electricity.
AEVA's preferred model would be to retain the light vehicle fuel excise in it's current form as an effective 'pollution levy'; disincentivising the purchase of internal combustion engines in favour of zero-emission options. In 2020, AEVA made a submission to the Federal Financial Relations review recommending a new model for road costing, which is just as relevent today.