Fuel excise has fallen from 1.5% of GDP since the early 2000s to a little over 1% and is likely to fall further as Australians switch to electric vehicles.

That’s the message from South Australia independent senator Tim Storer to the Australia Institute’s Revenue Summit in Canberra on October 17.

“This trend was but one of the reasons I advocated a senate inquiry into EVs – a committee which I am now chairing and which we are in the process of preparing a report for the parliament,” he says.

“I am hoping that it will provide a roadmap enabling policy makers to make up for lost time as the rest of the world makes the transition to EVs.”

Storer says it also points to the urgency of moving to some form of road user charge so costs of building and maintaining roads are equitably spread through the community.

“Why should the owner of a $200,000 Tesla pay nothing to drive on our roads, subsidised in effect by owners of Holdens and Fords?”

Storer says such a situation highlights that the tax and transfer system is no longer doing the job the community expects. He says community unease is matched by the data.

“Government revenue has become increasingly dependent on personal income tax as other forms of taxation have fallen away,” Storer says.

“For example, the percentage of household spending subject to the GST has fallen from a little under 61% to less than 56% in the years since its introduction at the beginning of the 2000s.

“In short, according to the Parliamentary Budget Office, an array of taxes from the GST to taxes on alcohol and tobacco to the FBT to company taxes to taxes on fuel products have all fallen as a percentage of GDP since the beginning of this century,” he says.

“At the same time, the budget is still struggling to return to balance and net debt continues to rise.”

Extracted from Auto News