A road user tax could help drive motoring equity

We are still lumbered with a range of revenue raising measures disguised as automotive taxes and charges, with little bearing on our future land transport needs.

The federal government has an historic opportunity to modernise the tax and land transport system, as oil makes way for the electrical vehicle era.

The current electric vehicle (EV) market here represents less than two per cent of vehicle sales while in Norway it's 75 per cent, the UK 10 per cent, Sweden 32 per cent and mountainous Switzerland 14 per cent.

EVs don't incur taxes, yet.

Three states are working on it, while on a population share basis Tasmanians pay $388 million a year in the 42.7 cents per litre federal fuel levy.

EVs are a no-brainer.

It costs me about $70 to fill up my SUV while a small electric vehicle can cost as little as $25 per charge.

The federal government will bank roll electric charging points, but not much else, so a fully-fledged EV is still out of the average motorist's price range.

For years we heard stories about multinational oil companies buying up any innovative plan to develop and market an electric vehicle industry, in order to shut it down.

Well, time's up. Even our slightly 1950s federal government has finally twigged to modern things like climate change and the new world of electric vehicles.

With this historic, albeit gradual shift, comes a complex egg of an issue, which has to be unscrambled.

At present, under the traditional automotive industry, the poor motorist in Tasmania is staggering under the burden of almost $1800 a year in state and federal motoring imposts.

Quite simply, according to the experts, the industry in Australia is a cash cow for governments.

Revenue is the primary objective.

The feds make more than $16 billion a year in fuel excise and GST on fuel excise, including $388 million from Tasmanians, on top of endless state taxes and charges.

This financial year, in the state sphere, the government collects $59.5 million in motor vehicle stamp duty, $100.5 million in motor tax, $48.3 million in vehicle rego, $9.6 million in motor vehicle fire levy and $7.5 million for drivers licenses.

As well, the government will bleed the third party insurer, the Motor Accidents Insurance Board, of $13 million in tax equivalent payments and $53 million in dividends, and this must have an impact on premiums.

Hence the $1800 a year federal and state tax take, before you pump a drop of petrol in the fuel tank.

The feds have a problem because more efficient vehicles have forced a 20 per cent drop in fuel levy revenue over the past 20 years.

So, with the belated onset of electric powered vehicles, we could revamp the whole automotive system and streamline the tax take with a road user tax.

In much the same way as the GST replaced a range of federal and state taxes and charges, so the road user tax would streamline the current system that helps oil companies and compliant governments get fabulously wealthy.

Right now the fuel levy unfairly targets the battler because older, inefficient vehicles guzzle petrol and cost more to maintain while the financially better off glide around in their expensive EVs, paying no fuel tax.

Real reform would involve a road user charge replacing the federal fuel excise plus vehicle registration, sales tax, motor tax, stamp duty, luxury tax and license fees.

The same principle could be applied to heavy transport, where for instance some trucks are on the road constantly while farm trucks and other heavy vehicles cover short distances.

Motoring bodies want road user charges to be based on vehicle mass, distance travelled, time travelled, where it travelled, as in urban or rural roads, and whether at peak times or off-peak times.

The impost would better reflect the use of the vehicle.

A regional motorist, driving a small EV at off-peak times over a short distance would pay a far more appropriate rate of tax than the mug motorist paying 43 cents a litre in fuel tax plus all the state taxes, regardless of the vehicle size, time of day, the distance travelled and where they travelled.

A road user tax would ensure the EV industry paid their fair share and would be fairer on motorists.

At present grandma pays far too much for how and when she uses her car because she is lumped with all those static taxes and charges imposts plus the fuel levy in spite of the infrequent use of her vehicle.

All she needs is an affordable, clean, green electric vehicle and a tax regime that properly reflects the extent of her travel.

It's a complex problem with a simple answer, and sadly, likely to fail in Canberra.