Sunday 2 October 2022 11:33 PM Why Australian motorists could be taxed for every kilometre they drive as ... trends now
A leading economist has warned Australian motorists could be taxed for every kilometre they drive because petrol cars being phased out will blow a massive hole in the budget.
A wholesale switch from petrol-powered cars to electric vehicles is envisaged as part of Labor's plan to cut carbon dioxide emissions by 43 per cent by 2030, which passed through both houses of Parliament in September.
But the federal government's National Electric Vehicle Strategy discussion paper acknowledges that such a shift will see a massive drop in money raised by the existing fuel excise, which is nominally used to fund upkeep of the nation's roads.
'They've got to find an alternative source of revenue,' BAEconomics managing director Brian Fisher told Daily Mail Australia.
'The sort of thing that comes to mind is taxes by distance travelled.'
Australian motorists could be tolled for every kilometre they travel as petrol cars are phased out (pictured is the WestConnex M4 tunnel at Haberfield)
The government's discussion paper hinted at the country potentially going in that direction.
'Planning is... required as future fuel excise revenue declines from reduced consumption of petrol and diesel,' it said.
Queensland Nationals senator Matt Canavan (pictured with wife Andrea), a former economist, said he would have concerns about privacy violations should private cars be distance tolled
'While this revenue is not currently earmarked for expenditure on roads, it is an important source of funding.
'In the long run, Australia will need a more sustainable and fair way to pay for roads.'
Excise from petrol and diesel fuel produced $19.2billion in revenue in the 2021-22 financial year, Treasury Budget papers show.
The six-month halving of the excise to 22.1 cents a litre, which ended in late September, cost the Budget an estimated $3billion in revenue.
Victoria has since last year required EV owners to declare their odometer reading, making it the first state to impose distance tolling on private cars.
Dr Fisher, a former Commonwealth public service executive, said that model could be rolled out nationally to make up for the future drop in fuel excise.
'One way or another, somebody has to make up the difference or alternatively you have to cut expenditure,' he said.
'Certainly, the current government hasn't indicated any enthusiasm for cutting government expenditure so I imagine there has to be compensatory tax.
'If you want to keep tax revenue the same as it is currently, you have to find a new source of revenue and if you believe that road user charges are the appropriate means of doing that, then the obvious way to raise the revenue is put on some sort of tax on distance travelled.'
The federal government's National Electric Vehicle Strategy discussion paper, released this week, noted fewer petrol and diesel cars on Australian roads would mean less revenue from excise (pictured is the new Toyota LandCruiser 300 Series)
The federal Department of Climate Change, Energy and Environment consultation paper explored the idea of expanding distance tolling, which already applies to petrol or diesel trucks, to electric trucks.
