The New South Wales Government says road-user charges for electric cars will replacing lost revenue from fuel excise.
The New South Wales Government has outlined its plans to introduce road-user charges for electric vehicles from mid-2027, to make sure petrol-free cars pay their way in the absence of revenue from fuel excise.
The Future Transport Strategy says electric-car road user charges will be fairer way of funding the state’s roads rather than relying on a portion of fuel excise collected by the Federal Government.
Other state governments have considered – or plan to introduce – similar charges to make sure electric vehicles don’t get a free ride.
Road user charges are primarily designed to recover lost revenue from electric cars which do not pay the fuel excise – a large portion of which goes into national road funding.
As reported last year, the NSW Government plans to introduce a per-kilometre road user charge from July 1, 2027 – or when electric-car uptake reaches 30 per cent in the state.
Under the proposed plan, electric car owners in NSW will pay a fixed rate of 2.5 cents per kilometre – while plug-in hybrid vehicle (PHEV) owners will be charged 2 cents per kilometre – in place of existing ongoing government costs such as registration, tolls and stamp duty.
These fees mirror similar charges announced in Victoria. Drivers of such vehicles will be required to fill-out logbooks and then be charged accordingly.
NSW currently offers a stamp duty exemption to all electric cars priced below $78,000, while the first 25,000 electric cars priced below $68,750 and purchased after September 1, 2021 receive a $3000 rebate.
The NSW Government’s 120-page Future Transport Strategy report suggests road-user charges will incentivise drivers to move away from petrol and diesel-powered cars and towards electric vehicles.
“There is an opportunity to reduce congestion and improve travel choices by exploring charges that are clearer, fairer, more efficient and more sustainable,” says the report.
“The development of a roadmap for long-term reform of user contributions across the road and public transport networks provides an opportunity to explore how we can influence travel behaviour to tailor demand to the capacity of our existing networks.
“Any long-term reform must consider the interdependencies with all modes, the relationship with parking, and equity considerations for customers who have limited travel options.
“NSW is leading reform in road user charging to support the transition to electric vehicles. This will help provide a sustainable and efficient source of road funding into the future without acting as a brake on electric vehicle uptake.”
While Victoria became the first Australian state to introduce a road user charge for electric cars from July 1, 2021, the state government was criticised for forcing plug-in hybrid owners to pay the per-kilometre tax in addition to the fuel excise at the bowser.
Despite Infrastructure Australia previously proposing a congestion tax – charging motorists for where and when they drive – should be introduced in the state’s capital, NSW Premier Dominic Perrottet said it was not a part of the government’s strategy.
“We don’t have any plans in relation to congestion charging and this has been raised before when elements of the document were released. This is important in terms of setting out the strategy for the future,” Mr Perrotett said, according to a report by The Sydney Morning Herald.
“(A road user charge) is clearly the future, and ultimately, you pay a tax today – stamp duties, fuel excise – that’s the position today as we move forward to an EV (electric vehicle) future.
“We know with electric vehicles being the future of road transport in Sydney, around the country and around the world that these new systems need to keep up with that choice.”
Last year, Infrastructure Victoria recommended the road user charge model should be implemented within 10 years, encompassing the costs of registration, tolls, the fuel excise and congestion charges.
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