The NSW Treasurer and Transport Minister say the federal government must consider bigger tax breaks to incentivise the take-up of electric vehicles.

Transport Minister Andrew Constance described the transition away from a federal fuel excise tax towards state road user charges as “a dog’s breakfast” and implored Canberra to do more to spur growth of electric vehicles.

Mr Constance said the federal government should increase its luxury car tax threshold from $77,000 to $90,000 for electric vehicles, and also consider a fringe benefit tax relief for fleet vehicles.

“What we’re seeing at the moment is the federal Treasury saying to the states ‘well we’re losing fuel excise, off you go, set your rates’ – it’s become a dog’s breakfast,” Mr Constance said.

“At a national level this clumsiness about being worried about what people think and the nature of the arguments, stop it, just stop it.”

Treasurer Dominic Perrottet, who is planning to implement a future distance-based tax at the next state budget said he also wanted to see the federal government consider extending the threshold on the luxury vehicle tax.

“The luxury car tax is clearly a Commonwealth tax and the threshold is already set higher for fuel efficient vehicles to encourage uptake,” he said.

“Of course you have to balance changes and it can’t become a permanent subsidy supporting an unfair playing field.”

The threshold for the 33 per cent luxury vehicle tax is $9000 greater for fuel efficient vehicles.

Federal Treasurer Josh Frydenberg’s office was twice contacted for comment before deadline.

Mr Constance said he was frustrated by the apprehension of federal governments to adopt climate-friendly policies.

It drives me nuts the level of energy that’s expended on whether climate change is real or not versus the energy that could have been expended on getting the public policy right,” Mr Constance said.

In the EV market we’ve got clunky uptake and we’ve got clumsiness around incentives. That’s not how to incentivise across the board a national shift in the market around innovation.”

Mr Constance on Wednesday suggested his government implement big incentives for electric vehicles, including subsidised car parks, access to commuter lanes and no stamp duty.

Mr Constance said the government should not introduce such a levy until electric vehicles made up 40 to 50 per cent of the car market. He said NSW also needed to pick a “drop-dead date” for a complete conversion to electric vehicles.

He said Australia risked becoming the “laughing stock of the world” if it didn’t do more to incentivise the technology.

Mr Perrottet has said he is planning to set in place a holistic distance-based levy, but only once more electric vehicles are on the roads.

The NSW approach will consider investing in electric vehicle infrastructure and be markedly different to the new Victorian system, which will tax EVs at 2.5 cents per kilometre.

Extracted in full from: Senior NSW ministers call for federal tax break on electric vehicles (