The Coalition government dumped plans to examine a road-user charge because of fears of a political backlash, it has emerged.
As the government mounts a full-blown attack on Labor’s plan to boost the uptake of electric vehicles by the end of the next decade, one of its key criticisms is that Labor has made no provision for the decline in revenue from fuel excise that will be a consequence.
Multiple sources have told The Australian Financial Review that in 2017 the Turnbull government cut dead a process to examine the introduction of a road-user charge for electric vehicles, as recommended by tax experts and the Australian Automobile Association.
Fuel excise is worth about $11 billion a year to the budget.
In 2016, then urban infrastructure minister Paul Fletcher first promised an inquiry into replacing fuel excise and registration fees with a system in which motorists would be charged for every kilometre they drive.
The inquiry was to be led by an eminent Australian and each major party would nominate two other committee members.
It is understood that the then chief executive officer of Infrastructure Australia, Philip Davies, was chosen to lead the inquiry.
Although Mr Fletcher stressed at the time that introducing the charge would take 10 years and would require federal bipartisan support and the support of the states, the idea was dumped due to fears of a political backlash.
Barnaby swung the axe
The axe was finally swung around December 2017 when Barnaby Joyce became minister for infrastructure and transport.
“He heard Fletcher talking about it on the radio, went and saw Turnbull and that was it,” said a source.
When Scott Morrison became leader in August 2018, there was no move to revive the inquiry.
The inaction has caused enormous frustration among motoring bodies that feel the case for change needs to start being made now.
The Australian Automobile Association called long ago for fuel excise to be itemised on petrol receipts so people would realise how much tax they were paying.
Need to start transition now: AAA
In January, the AAA called for a road-user charge to start being applied to electric vehicles so it is phased in along with the new technology.
Last week, Labor announced as part if its climate change policy an aspiration for 50 per cent of new car sales by 2030 to be electric vehicles.
To encourage the uptake, it would mandate electric vehicles as a proportion of the government fleet in 2025 and introduce emissions standards equal to those which apply in the US.
Shadow transport minister Anthony Albanese indicated last week Labor was open to the introduction of a road-user charge but it would require bipartisan support.
“This is a government that recognised, Paul Fletcher recognises, something of what the future looks like, but aren’t capable of even making baby steps forward,” he said.
Despite Deputy Liberal leader Josh Frydenberg advocating a similar policy approach last year, the government has attacked Labor’s policy and claimed it will amount to a $5000 tax on current vehicles.
On Tuesday, Mr Morrison, campaigning at a car dealership in the NSW central coast, claimed Labor was mandating change with its emissions standards which would rule out 17 of 20 popular models it sold today.
Extracted from AFR