Victorian electric car owners win High Court challenge against controversial tax

October 18 2023
ABC News

The High Court has thrown out a controversial Victorian tax on electric cars which applies to zero and low-emission vehicles.   

Key points:
A Victorian road-user tax that charges electric vehicle users by how far they travel was found to be unconstitutional
The High Court determined the tax was an excise, which cannot be imposed by states or territories
The judgement means other jurisdictions are now prevented from introducing similar charges
The state government charge has been applied at a rate of about two cents per kilometre and was designed to match the contribution drivers of fuel-powered vehicles already make to road maintenance through a Commonwealth fuel excise.

It means drivers of plug-in hybrid and fully electric vehicles must pay for the distance they travel on public roads, both in and outside Victoria.

But electric car owners Christopher Vanderstock and Kathleen Davies mounted a High Court challenge, arguing the tax was an illegal "tax grab" because it was an excise, which only the Commonwealth could impose.

Today, the High Court agreed, finding the Victorian tax was unconstitutional.

Ms Davies said she was "thrilled" to have won the constitutional challenge.

"It is to me almost a common sense outcome. We no longer have an active disincentive to driving EVs," she said.

"When the tax came in in 2021, I thought 'oh you are joking how can you penalise people for driving an electric vehicle'.

"I was very angry so I took [the case] on. It was the wrong direction to go."

Ms Davies said she welcomed more discussion about tax but described the EV levy as "ad hoc".

"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," she said.   


Electric vehicle driver Kathleen Davies believes her successful High Court challenge will promote the uptake of EVs.
Mr Vanderstock said he believed the outcome was a triumph over "ad hoc, piecemeal policy which undermined our collective efforts to reduce emissions from transport".

"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," Mr Vanderstock said.   

The Victorian government had argued the charge was not an excise but rather a tax on activity which it was entitled to levy.

All other states and territories had lined up to support Victoria's case.

'Muddle-headed' policy: Electric Vehicle Council
Today, the High Court found the tax was an excise, which is a goods tax, and therefore could not be imposed by a state.

The court was deeply divided in its 4-3 ruling.

There is much at stake as a result of the judgement, not least because of the rising numbers of electric vehicles on the roads, which in turn will lead to falling revenue for states and territories from fuel excise.

The Electric Vehicle Council (EVC) said the decision was a win for motorists and the environment, adding that it expected other jurisdictions would now be unable to introduce similar charges.

"The electric vehicle industry warned the Victorian government this policy was muddle-headed years ago," EVC chief executive Behyad Jafari said.

"There is nothing inherently wrong with road user charges, but they should never be calibrated to discourage the take-up of electric vehicles."

Victorian government 'disappointed' with outcome
The Victorian Greens called on the state government to refund EV tax already claimed from vehicle owners.

Victorian Greens MP Ellen Sandell said the government should introduce subsidies to encourage electric vehicle take-up.

"Victoria's electric car policy is the worst in the world, so now we need to see Labor change course, to go back to the drawing board, to come up with an actual plan to get polluting petrol cars off the road," she said.

Shadow Treasurer Brad Rowswell agreed the money should be reimbursed.

"We've got Victorians who have paid this EV tax, we now know that it's unconstitutional," he said.

"The Allan Labor Government must immediately assure those Victorians who have paid that moey that they will get the refund that they deserve."

The Victorian Government said it was "disappointed" with the outcome, but accepted the court's ruling.

"We will take time to consider the judgement," a government spokesperson said.

Speaking before today's court decision, Victorian treasurer Tim Pallas said the tax was based on fairness.

"We'll obviously have to take a bit of a while digesting what the decision itself means, but I don't think we'll ever lose sight of the basic proposition that we need to put in place a system that ever user of the road basically pay their share of that maintenance," he said.

Mr Pallas said electric vehicles were heavier than regular vehicles and therefore contributed more to road degradation.

The case had coincided with schemes by all states, territories and the Commonwealth designed to increase the number of electric cars.

Oh wow! This IS interesting news.

NSW was about to follow Victoria in this scheme.

Ha! It’s unconstitutional!!!

The Victorian government had argued the charge was not an excise but rather a tax on activity which it was entitled to levy.

All other states and territories had lined up to support Victoria's case.

'Muddle-headed' policy: Electric Vehicle Council
Today, the High Court found the tax was an excise, which is a goods tax, and therefore could not be imposed by a state.

The court was deeply divided in its 4-3 ruling.

Bottom line : It was a close call.

So now the virtue signallers drive on the roads without cost. So much for caring and sharing.

Of course it is now in Albo's hands. He will come up with a solution; won't he?

whiteknight wrote on Oct 18^th, 2023 at 6:38pm:



And bugger the road maintenance.

I wonder how poor roads will affect the life of the batteries?