Drivers in the market for an electric or hydrogen vehicle in Western Australia will get a $3500 rebate towards a new purchase but will have to start paying a per-kilometre tax in five years to go towards new roads and maintenance.
The state government revealed a $60 million pre-budget announcement on Tuesday which would see $36.5 million set aside for 10,000 West Australians looking to buy a vehicle up to a price of $70,000.
But all electric and hydrogen owners will be taxed 2.5 cents per kilometre from 2027 and plug-in hybrid owners will have to pay 2 cents, with the rate to be tied to rises in the consumer price index in subsequent years.
WA Climate Action Minister Reece Whitby said it was fairer for electric and hydrogen owners to pay a tax considering other motorists had to contribute at the petrol bowser through the federal fuel excise.
“If we don’t make this change that means people that are still driving petrol-fuelled cars – and often those will be people who can’t afford yet to buy an electric vehicle – will have the whole burden of funding our roads,” he said.
“If we’re taking about 10,000 vehicles, that’s the equivalent of removing 7000 tonnes of gas emissions into the … atmosphere.”
The excise was recently reduced, for a six-month period to help out Australians in their hip pocket, from 44.2 cents to 22.1 cents.
But recent analysis from the nation’s peak motoring body, the Australian Automobile Association, found only half of the money collected by the excise was going towards road and public transport projects.
Transport Minister Rita Saffioti said even though electric vehicle owners would be getting taxed, they would only be paying half as much as what other motorists contributed to the fuel excise on average.
At a rate of 2.5 cents per kilometre, an electric car owner who drove 10,000 kilometres in a year would be expected to pay about $250.
Australian industry group the Electric Vehicle Council welcomed the rebate but chief executive Behyad Jafari said WA should be looking more broadly at how it was taxing drivers.
“In the immediate term the rebates are useful to make electric vehicles more affordable to people,” he said.
“In terms of road user charges, moving our system over to them makes sense but there are smarter ways to do it.
“In NSW the government has decided to introduce them from 2027 but used them as an opportunity to remove stamp duty rather than add an additional tax onto electric vehicles.”
The council was scathing of Victoria’s plan to immediately bring in a road tax on electric vehicle owners, calling it a disincentive and one of the worst policies in the world in the space.
Jafari said having a lag time out to 2027 gave the WA government time to get a pulse on the market and look at other initiatives like potentially waiving stamp duty.
Subsidy is a policy backflip for WA government
WA has lagged behind other states in bringing in a rebate or waiving stamp duty on new and used electric vehicles.
The rebate comes as a surprise in WA after the state’s Energy Minister Bill Johnston said at a forum last year the government did not need to incentivise anybody to go electric as manufacturers moved towards phasing out petrol engines.
“Because – guess what – you’re going to be buying electric cars,” he said.
“It’s a bit rich for these car companies to ask the taxpayers to pay for them not to reduce the price of their cars.”
Greens MP Brad Pettitt, a former dean at Murdoch University’s School of Sustainability, said the government should have brought in its new policy two years ago.
“There’s going to be good reason to be frustrated to leave it so long as getting a car will be difficult now,” he said.
“Had that been in place two years ago when we were asking for it, it would have been easier to purchase one.
“Now there’s long waits on all cars. That’s the frustration around this delay.”
The Tesla Model 3 is the highest-selling electric car in Australia, with 12,094 sold last year, but wait times have blown out to as much as 12 months.
While the WA government fleet includes 459 hybrid vehicles, there is not much of a resale market for electric cars as the state fleet only includes 32 vehicles.
The state government has a target of 25 per cent electric for its small and medium-sized vehicles by 2025-26.
Pettitt said the government should be moving towards road charges for all drivers and not just people who had electric vehicles.
Jafari said 0.1 per cent of cars on Australian roads were electric or hydrogen and ideally petrol and diesel vehicle owners would be paying for the pollution they caused on top of the wear and tear on roads.
Long-time Perth electric vehicle owner Rob Dean said he did not have a problem with the road user charge that would be introduced but said offering rebate incentives when there was not many vehicles available was not a good move.
“Where the money should be spent on charging infrastructure and reliable charging infrastructure,” he said
“One of the issues in the eastern states is non-Tesla infrastructure is starting to fall to pieces.”
Greater infrastructure spending included in package
About $22.6 million will also be part of the budget package for infrastructure like charging stations.
There will be $4 million going towards the Public Transport Authority for a trial of charging infrastructure at four train stations with up to 20 bays per carpark.
Not-for-profits, small and medium businesses and local governments will get a share of $15 million towards installation costs for charging infrastructure.
More than $2.9 million will go into eight charging stations between Norseman and Eucla to help electrify the National Highway between WA and South Australia.