Fuel tax could fall as more make the switch to EVs

Public news

Since the early 2000s, the fuel excise has fallen from 1.5% of GDP to slightly over 1% and could fall further.

South Australian Senator Tim Storer spoke at the Australia Institute’s Revenue Summit in Canberra last week saying, “This trend was but one of the reasons I advocated a senate inquiry into EVs, a committee I am now chairing and which we are in the process of preparing a report for Parliament. I am hoping that it will provide a roadmap enabling policy makers to make up for lost time as the rest of the world makes a transition to EVs.”

Senator Storer also says that the current situation highlights the tax and transfer system is not doing the job the community is expecting and also says that it points out the urgency of moving to a form of road user charge so costs of building and maintaining roads are spread equally through the community.

“Why should the owner of a $200,000 Tesla pay nothing to drive on our roads, subsidised in effect by owners of Holdens and Fords?”

The Senator went on to say, “The percentage of household spending subject to the GST has fallen from a little under 61% to less than 56% in the years since its introduction at the beginning of the 2000s. In short, according to the Parliamentary Budget Office, an array of taxes from the GST to taxes on alcohol, tobacco to the FBT to company taxes to taxes on fuel products has all fallen as a percentage of GDP since the beginning of this century.”