A bill to allow the tax passed South Australia’s Legislative Council on Thursday, with SA Best’s MLCs Connie Bonaros and Frank Pangallo as well as independent MLC John Darley voting with the government to approve it.
In order to secure its passage, the government offered some short-term sweeteners, including a three-year registration fee exemption for new electric vehicles, and a $3,000 subsidy for the first 7,000 electric vehicles sold.
Those subsidies will not apply for hybrid vehicles, or those priced at more than $68,750.
The bill will also establish a parliamentary committee to examine the rollout of electric vehicles.
The new tax will come into effect in July 2027, or when electric vehicles make up 30 per cent of the market, whichever is earliest.
Owners of plug-in hybrid vehicles will be charged an indexed fee of 2 cents per kilometre, while the owners of any other electric vehicles will be charged an indexed fee of 2.5 cents per kilometre.
The charge will be levied in arrears as part of the vehicle registration process, with the final cost calculated on the distance travelled since the previous registration renewal.
Treasurer Rob Lucas said that, while South Australia was the first to propose the tax, it would not be the last state to enact it.
“Look, I think it’s a recognition that this is inevitable,” he said.
“And we’re going to have to have a mechanism which funds the maintenance and replacement of our road network, because fuel excise will completely disappear.”
Fuel excise is currently charged by the federal government.
Opponents of the new tax said its passage would slow the state’s ambition to be a national leader of electric vehicle uptake.
“While statements and goals are good, adequate policy commitments to support the EV sector are now needed,” said the Australia Institute’s South Australian director, Noah Schultz-Byard.
“Our research shows the EV package in South Australia falls well short of what is being offered by the SA government’s Coalition counterparts in New South Wales.”
The Labor opposition said the passage of the bill days before the Glasgow Climate Change Conference sent the wrong message.
“This is a state government trying to fix a federal government revenue issue while the planet is literally on the verge of climate catastrophe,” Deputy Labor Leader Susan Close said.
“While most of the rest of the world is trying to incentivise take-up of electric cars, Steven Marshall’s government has just brought in a big new tax to act as a disincentive.
“Sadly, it seems the reckless climate policies of the Liberals at a federal level are now infecting the Liberals here in SA.
Greens MLC Robert Simms said the vote on the bill was an “embarrassing day for South Australia”.
“Much like the Morrison federal government, the Liberals here in South Australia just aren’t taking the threat of climate change seriously,” Mr Simms said.