Wednesday, 1 November 2023

Motions

Electric vehicle tax

Evan MULHOLLAND (Northern Metropolitan) (15:13): I want to speak on the EV tax, but due to the previous motion I know that my good friend and colleague Mr Davis will be celebrating, while at his CPA conference, his win on changes to sessional orders. I know he is a great fan of transparency in government – another masterstroke by him. I move:

That this house notes:

(1) on 18 October 2023 the High Court of Australia determined that Labor’s electric vehicle (EV) tax was unlawful;

(2) Labor’s EV tax was widely criticised at the time as a disincentive to electric vehicle take-up, effectively punishing Victorians who make the switch;

(3) prior to the November 2022 state election, the Liberals and Nationals committed to pausing Labor’s EV tax, in line with the position of New South Wales;

(4) Labor’s EV tax was a bad tax from the very beginning and was only introduced because the Labor government was desperate to find new ways to pay for their record debt, waste and mismanagement;

(5) Labor’s EV tax was always just a tax grab that crushed take-up of electric vehicles by Victorians;

and calls on the Allan government to immediately commit to returning every cent raised from Victorians by this botched and unlawful tax and now come clean on how much money was spent fighting the case in the High Court.

I urge the house to support this motion. I think this motion is one we can all get behind, because there are many different perspectives one can take on the EV tax but I think we can all agree that it was a bad tax. The EV tax refers to the zero- and low-emission vehicle road user charge. It was levied on electric vehicles, hydrogen vehicles and other zero-emission vehicles at 2.8 cents per kilometre. It was also levied on plug-in hybrid vehicles at 2.3 cents per kilometre. It was calculated based on the distance travelled within a given registration period and required registered vehicle operators to provide VicRoads with odometer readings when required. From an environmental perspective, the tax disincentivised the uptake of electric and low-emission vehicles. It punished Victorians for doing their bit to make the switch.

Labor’s EV tax was widely criticised when it was introduced, including by the Liberals and Nationals opposition. Before the tax came in, 25 organisations, including Environment Victoria, the World Wildlife Fund and others, called on the government to reconsider the levy. Leading car makers such as Volkswagen and Hyundai also joined the call. They described it as ‘the worst electric vehicle policy in the world’. The Labor government like to claim they are world-leading on a lot of things. They are world-leading on bad, poorly designed and unlawful taxes. The Australian Industry Group said the Victorian government was ‘putting the cart before the horse’. Transport is responsible for around a quarter of Victoria’s greenhouse gas emissions. According to Infrastructure Victoria, if all vehicles on the state’s roads were zero-emission vehicles, about 27 million tonnes of greenhouse gas emissions would be eliminated in Victoria by 2046. By introducing this tax, Labor made it harder for people to switch to low-emission vehicles and made it harder for Victoria to reduce emissions.

From a broader economic perspective, it is just a bad tax, and I think you would all acknowledge that it is a bad tax. As John Quiggin, an economics professor at the University of Queensland, has pointed out:

… the policy rested on a misunderstanding of economics.

He said the government argued that:

EV drivers don’t buy petrol or diesel, which means they avoid the fuel excise that other drivers pay

…

Drivers who fill up with petrol, gas or diesel don’t bear the social and environmental costs of their choices in the form of carbon dioxide and other pollutants emitted …

You have got their federal Labor colleagues wanting to introduce fuel emissions standards to drive EV uptake and disincentivise regular petrol cars, but you have got this lot taxing electric vehicles in the process, so it seems like they are not really speaking to their comrades in Canberra. They seem to be on different pages regarding this tax. Mr Quiggin said:

… by taxing EVs, you make traditional car drivers better off – and that leads to worse social outcomes …

There is also a fiscal perspective. The Labor government have faced nearly $30 billion of blowouts on major projects such as the Metro Tunnel, the West Gate Tunnel, the North East Link and the Suburban Rail Loop and an almost dizzying array of blowouts on smaller projects, all of which the Premier has had direct responsibility for. I think we are up to – Mr McCracken might be able to help me – about $600 million wasted on the Commonwealth Games alone, which this Premier was directly responsible for. Labor brought in the EV tax not because it was good for uptake of EVs, not because it was good for the environment and not because it was good for Victorians but because they are desperate for cash to pay for their record debt, waste and mismanagement. The reality is that Labor are addicted to spending, and the mismanagement we see in major projects and smaller ones alike is a demonstration of the contempt Labor have for the money of hardworking Victorian taxpayers. The last thing Labor need is to have their recklessness subsidised by yet another tax, in this case paid for by the early adopters of EVs, who were trying to do the right thing and trying to do their bit to reduce emissions.

Another perspective simply is that the tax has been found to be unlawful by the High Court. According to the Electric Vehicle Council’s latest State of Electric Vehicles report Victoria is lagging behind New South Wales in EV uptake. I wonder why that is. Maybe it is because New South Wales do not have a tax on electric vehicles and Victorians do. It is very right for the Electric Vehicle Council to point that out in their report and condemn the government for introducing what has been a bad, botched and unlawful tax. Prior to the 2022 November state election the Liberals and Nationals committed to pausing Labor’s EV tax in line with New South Wales. We knew it was a bad tax underscored by questionable legal advice. We now stand by our position, and I think it was a fairly good one in that we almost predicted the outcome here.

It now seems that the Labor government are dithering on whether Victorians that have paid the EV tax will receive a refund. VicRoads have now advised that despite the High Court striking the tax down, motorists who are due to renew their zero- and low-emission vehicle registration should continue to pay. So you have got High Court decision where the High Court brought down a ruling that this tax is unlawful, and you have got VicRoads saying motorists should still pay. We have seen this government show contempt for High Court decisions before, and they are doing the same here with electric vehicles. Again, VicRoads have said people should still pay the tax, even though the High Court has struck it down. This is despite renewal requiring an attestation of odometer readings in the renewal process. It is just absolutely extraordinary how much they have bungled this.

You have got a High Court ruling saying this is an unlawful tax, and not only are they asking people to keep paying it, they are not giving back the money that Victorians have paid through this charge, which was unlawful to begin with. Any government with decency should admit they were wrong and should return the money that was illegally thieved by this government to those Victorians. The decision was ruled to be unlawful by the High Court of Australia, our penultimate court, and yet this government continues on like nothing happened. I am sure that many in the electric vehicle and broader community will be pursuing the government over this matter; in fact I know that that is likely to occur. It is absolutely brazen of this government to keep trying to thieve money from hardworking Victorians who have paid a tax that has turned out to be unlawful. This motion calls on the Allan government to immediately commit to returning every cent raised by this botched and unlawful tax. It is a botched and unlawful tax. They have absolutely made a mess of it.

As I said earlier, this motion also calls on the government to front up with the Victorian people as to how much taxpayer money was spent fighting this battle in the High Court. How much taxpayer money was spent on legal fees fighting this battle in the High Court that it lost? It lost. We knew it was a bad tax from the start, and equally, in terms of tax collection one could ponder what other taxes may be unlawful. Perhaps the Airbnb tax levied directly on consumers could be unlawful if it were tested, because we know that a direct charge on EVs, on consumers, is unlawful also. So the government should front up with the Victorian people. How much taxpayer money have they spent fighting this only to lose?

The government need to now admit they were wrong – I hope they will with this motion; we might get it from the next speaker – admit it was botched and respect the High Court’s ruling that it is unlawful. In respecting the High Court ruling, the only sensible thing to do would be to actually say, ‘Yes, we were wrong. Yes, we are sorry, and here is the process we are going through to refund people that were charged unlawfully for this tax, and we are going to stop charging people this tax.’ That would be the fair thing for the government to do. I hope I hear similar words from the government regarding this tax. How could you not respect a High Court decision and keep charging people paying this tax? So I urge the house to support this motion, whether it be from an EV uptake perspective, an environmental perspective, an economic perspective, a legal policy perspective or possibly even for other reasons.

Lee TARLAMIS (South-Eastern Metropolitan) (15:27): I move:

That debate on this motion be adjourned until later this day.

Motion agreed to and debate adjourned until later this day.