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NSW government to delay EV Tax and take “holistic” approach


As the Victorian Government pushes ahead with an EV Tax, the NSW Government has declared it will take a more considered approach with a plan set to be announced in the upcoming state budget.

NSW Treasurer Dominic Perrottet has said he will delay imposing a distance-based electric vehicle tax to avoid impeding the adoption of the emerging technology.

Mr Perrottet said he had been working with NSW Environment Minister Matt Kean on a “holistic package” that would be announced in the state budget.

Chargefox has 15 rapid charging stations around the country
NSW Treasurer Dominic Perrottet has announced he will not impose an EV tax as to not impede the take up of the emerging technology

The Treasurer made it clear that he wanted to see wider adoption of electric vehicles in NSW before he would consider imposing the tax, with EVs currently accounting for less than one per cent of sales in Australia.

“A user charge is where the future lies but what’s important is that we promote, not impede, the take-up of electric vehicles,” Mr Perrottet told the Sydney Morning Herald.

“Over time, people who use the roads should pay for the roads, just like they do with fuel excise, but what we don’t want to do is impede innovation and take-up of electric vehicles”.

Nissan Leaf e+ 2021 charging
The upcoming NSW state budget is expected to include investment in electric chargers

Mr Perrottet said he originally planned to unveil the strategy last year, which is understood to include investment in electric vehicle infrastructure. 

The move is in complete contrast to that of Victoria, which has pushed ahead with a plan to tax electric vehicles owners 2.5 cents per kilometre from July 1 – while South Australia has put its EV tax plans on hold for the next 12 months.

The tax is meant to serve as a fair equivalent to the fuel excise tax that is charged at a rate of 42 cents per litre on petrol and diesel fuels, as electric vehicle owners naturally do not need to buy fuel. 

Mercedes-AMG G63 2021 exhaust
The EV tax is meant to be an equivalent to the fuel exercise tax charged on petrol and diesel fuel but critics have said it will kill off EV take up in Australia

The proposal of an EV tax has been met with fierce opposition from environmental groups and car manufacturers alike, with Tony Weber, chief executive of the FCAI accusing those of imposing the tax of attempting to kill off the technology in its infancy. 

Behyad Jafari, the CEO of the Electric Vehicle Council, commended the NSW Government on taking a nuanced approach instead of introducing a “blunt Victoria-style tax”.

“The NSW Government appears committed to develop policy that supports and accelerates the state’s transition to electric vehicles,” he said.

Electric Vehicle Council CEO Behyad Jafari commended Mr Perrottet on his stance

“We don’t expect to agree with everything the Treasurer proposes, but what we do respect is the fact that he is genuinely listening on this complex policy area.

“Done well, road user charges are a sensible way forward. But they should not be introduced in a way that encourages people to stay in oil-thirsty vehicles. That’s unfortunately what Victoria’s blunt EV tax will do, and it is a trap Mr Perrottet has thankfully avoided for his state.”

The NSW Government is expected to release more details on its electric vehicle strategy when it announces the budget towards the end of this year.