EV charging in regional Australia is getting more mainstream. (Photo by the author)

The Clean-Air Tax is Bad Policy

A form-letter for your clean-air taxing local senator or local member

Dear (insert correct salutation),

I am voter in the electorate of (insert the name of your electorate) and write to you as someone who is concerned about the proposed introduction of a clean-air tax, aka an electric vehicle road-use tax.

refs: pick one, or find another
- https://thedriven.io/2020/11/11/south-australia-to-impose-road-user-tax-on-electric-vehicles-from-2021/
- https://www.theage.com.au/politics/victoria/pallas-zaps-electric-cars-with-road-charge-20201121-p56gp3.html

The proposed tax is bad policy

I have read the report Road User Charging for Electric Vehicles released by Infrastructure Partnerships Australia, which paints the idea of a per-kilometre charge for EVs as an inevitability, but which discounts the many benefits of EV use.

This report purports to provide the intellectual underpinnings of the move by (you, your government, party, leader, treasurer) to penalise EV users, however its central argument that “all users should pay for road use”, is based on the false assumption that EV users do not pay income tax, GST, or local council rates.

Road construction and maintenance is funded out of federal tax revenue at a federal level, GST at a state level, and from council rates and occasionally also from road tolls at a local level. EV users and non-EV users alike already pay for the maintenance of roads.

Fuel excises were intended, in part, to provide compensation for damage done, both to roads themselves and to public health in general, by tailpipe emissions. The reality is that these excises flow to general federal revenue, and were decoupled from state revenues in the Howard era.

Fuel excises are not, and were never, specifically allocated to road maintenance, or to any kind of infrastructure development.

EV owners pay higher levels of tax than many non-EV owners due to the higher cost of their vehicles. Most EV owners were forced to pay luxury car tax, a tax that was originally intended to protect the now defunct local car manufacturing industry, and they pay higher amounts in GST as their cars cost more.

Who Benefits

If you examine sections 77HA, and 77HB of the excise act of 1901, and sections 6H and 6J of the Excise Tarrif Act of 1921, there are already significant exemptions and carve-outs for a wide range of fuels used in aviation and heavy industry.

  • The federal government remits a large amount of the fuel excise it raises back to large fuel users, fuel producers, and fuel transporters in the form of subsidies, grants, and interest-free loans.
  • Much of that money is simply shipped offshore as dividends to the shareholders of those companies.
  • Few of these companies pay much tax.
  • Very little, if indeed any, of the fuel excise raised is used for the benefit of Australian road users.

The Damage Done

Tailpipe emissions are a significant contibutor to harm in public health, as well as damage to roads, other public and private infrastructure, and to other vehicles. They also of course contribute to the buildup of greenhouse gasses, something Australia is already committing significant funds to reducing.

EVs currently comprise fewer than 1% of all cars on Australian roads, and while this is projected to rise significantly in the coming years, this rise will be countered by a reduction in the need for petrol stations, and vastly fewer heavy fuel transporting trucks on the roads.

The trucks that distribute fuel to petrol stations do more damage to roads and associated infrastructure than all of the EVs in the Australian fleet.

The EV Future

EV use correlates directly with improved health outcomes on a societal level. The benefits are tangible and amount to many thousands of dollars per year. Cities with high proportion of EV use are typically quieter, and have lower cleaning and maintenance costs in comparison to when fuel burners ran rampant.

EVs are projected to play a vital role in balancing out energy grid use, with “virtual power plant” projects currently being trialled across the country. Some EV charging stations can function as dual-use local battery systems which help stabilise the energy grid. As more household and workplace renewable energy systems come online, having a network of batteries will lead to significant savings in terms of energy transmission systems; the maintenance of which is the leading cause of high energy prices in Australia.

Widespread adoption of EVs will lead directly to lower public health costs and improved health outcomes, lower energy prices, quieter, cleaner cities, cheaper commitment to our Kyoto and Paris accord obligations, and a more resilient energy grid.

There will be losers

Not everyone will be a winner in the EV future, at least not in the short-term. I wouldn't be holding any shares in the auto-parts industry that’s for sure. Petrol station franchises will be the new Blockbuster Video stores, as new, strategically located charging stations take advantage of the 20 minute downtime drivers might take, drawing trade into much overlooked regional townships.

Drivers commuting locally will typically always charge at home, or at work. Vans and trucks are all going electric, with the Tesla Semi, and Cybertruck both in development now, and other EV truck makers are jumping on the idea. Trucks make great EVs as they can carry huge batteries and need to have low centre of gravity.

We can’t hold back the march to electric vehicles and distributed, load shared, smart energy grids in order to protect a handful of businesses from becoming irrelevant.

There Will Be Many More Winners

Ordinary people, living ordinary lives, will benefit invisibly by the inevitable transition.

  • The restaurant in Hay, that does a roaring trade in schnitzels, that soaks up trade from the free EV charger in the car park out the back, becomes the place to be to break up a long haul with a proper meal and some chatter.
  • The house on the busy road that suffered terribly from road-noise, gains 20% in value as the ambient road-noise drops.
  • The school play whose power stayed on during opening night, despite a widespread outage, because parent’s EVs were connected to the school grid.
  • The state government that saves money by embracing change

While federal revenues from fuel-excises will fall away, just like federal revenues from taxing cigarettes is falling away; no-one is proposing a “fresh air” tax on non-smokers are they?

The situation is entirely analgous. We don’t penalise law-abiding citizens because crime levels are dropping. We don’t penalise teetotalers because of lost alcohol tax revenues. Why should EV users, who have already chosen to spend more money for the good of the country, be further penalised?

It feels like you are throwing gravel into the gears, with the tax (you, your party, treasurer, leader) (is, are) proposing.

A simple request

Please consider the broader benefits of the transition to EV use, and stand firm against this regressive proposal.

Yours faithfully,

(insert your name)
(insert your address)

Blockchain Tsar & Senior Javascript Practitioner at Industrie&Co. (https://industrie.co)

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