21st Century Mixed Gauge Muddle
Introduction
I thank the Committee and the Secretariat for the work it has done in relation to this inquiry and thank the people and organisations that made submissions.
Sadly the Morrison Government is totally lost when it comes to Electric Vehicles (EVs). It is often said that history repeats. That's certainly the case here, where Australia’s faces a shambles that can be compared to the long delay in standardisation of railway gauges in Australia. There are still people in the South Australian township of Peterborough that remember the mixed gauge muddle of the seventies when the town serviced no less than three different gauge rail lines: narrow, standard and broad gauge rail.
Absent a promised National Electric Vehicle Strategy, states are going it alone on EVs. This bill seeks to un-muddle some of the muddle and should be supported.
Effects of the bill
It does not make sense for penny poor state governments to discourage the take up of EVs at this point in time, just to try to fill their coffers. The bill sensibly removes any financial incentive from states and territories seeking to impose a road user tax on EVs by reducing grants by an equivalent amount or obtaining equivalent compensation through the COAG Reform Fund.
It also seeks to avert a mishmash of different taxes across jurisdictions.
This bill does not, and cannot, resolve the overarching issue of not having a national solution to transition to a future transport solution that is properly planned and implemented. But the bill is a step in the right direction and should be supported.
Where's the vision? Look in the rear view mirror!
The Morrison Government has no 'vision' of what Australia’s transport mix should look like in the future and what needs to happen around that to ensure the nation has been future-proofed, but at the very least is future ready. It's highly concerning and unacceptable.
The Bill must be viewed in the broader context, and that is to address a symptom of the Federal Government failing to have a National Strategy for Electric Vehicles; a strategy that should deal with the ongoing introduction and uptake of EVs, provide the guidance to the population, industry and the states and provide a common agenda across the country.
There is a statement in project management that is highly applicable to this situation, "Fail to Plan, Plan to Fail". Right now there are so many aspects of the transport transition where the Government has conspicuously failed to plan. The absence of planning is already having a negative effect. Vehicle manufacturers are withholding some of their EV models from the Australian market. The private sector is hesitant to invest. The national EV charging network is not progressing as it should be. We have states rolling out road user taxes for EVs. Aussies interested in owning and operating EVs are reticent to make the investment and the situation is worse for heavy vehicle operators such as bus companies.
The commencement of the EV road user tax in Victoria on 1 July 2021 is the first real life example of inconsistently applied road user taxes. South Australia had signalled its intent to follow suit.
The need for a national strategy and approach was an underlying sentiment echoed across the majority of the submissions and this should not only be reflected in the report, it should be highlighted.
The inescapable reality is that EVs are the future transport solution; overseas manufacturers are openly stating they're moving in that direction and have been for a number of years. Australia no longer has a local car industry that could manufacture internal combustion engine powered alternatives. It's not like Australia has a viable alternative to EVs.
Australia is on a journey to net zero carbon emissions by 2050. The Morrison Government claims the pathway will be through "technology, not taxes". EVs are a technology that must be part of the journey, yet the Federal Government's standing by and allowing states to impose taxes on that technology, a clear disincentive. It would also, as the Electric Vehicle Council explained, make Australia the first country in the world to discourage EV uptake. This not a category we want to be first in.
Where has the money gone?
The fuel excise is the largest source of road related revenue, it is also well recognised that the fuel excise is not just spent on roads, it covers far more government expenditure. Another fact is that it is in decline and it has been for some time. This trend will continue and as more EVs get on the road, the rate of decline will accelerate. This reduction in fuel excise revenue will negatively impact the Federal Government’s bottom line, forcing a cut in spending or initiation of a new tax on something else.
The Federal Government do need to have a plan for dealing with the lost fuel excise revenue, but that can’t include a road user tax on EVs. As a disincentive to EV take-up, the imposition of such a tax at this time is short-sighted policy.
Committee recommendation
The report has one committee recommendation, "that the bill not be passed". It is a recommendation consistent with the Morrison Government’s approach of "let's do nothing". This is not acceptable.
The report fails to properly represent the underlying view of the majority of those that made submissions or appeared before the inquiry.
The report should also recommend the Government urgently develop and publish a National Strategy for EVs. We would be foolish indeed if Australia decided to repeat the colonial experience of differing railway gauges with this new and critically important transport technology.
Recommendation:
this bill should be supported; and
this weekend the Prime Minister should read the 2019 Select Committee on Electric Vehicles report, and especially my additional comments. I can assure him that doing so won't ruin his weekend.
Senator Rex Patrick
Member
Independent Senator for South Australia