The Coalition’s proposal to cut the fuel excise tax by half has been met with criticism for two of Australia’s latest electric vehicle (EV) industry bodies.
They’ve perhaps unsurprisingly instead called for governments to better support fuel-efficient and zero tailpipe emission vehicles.
Overnight, Opposition leader Peter Dutton promised that if his party wins the upcoming federal election, the current fuel excise tax of 50.8 cents per litre will be halved overnight, with the reduction to remain for 12 months.
According to the Coalition, motorists who fill their vehicles with 55 litres of fuel per week will save approximately $720 for the year, though this will lead to a $6 billion shortfall in the budget with lost revenue from the current excise rate.
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Electric Vehicle Council (EVC) CEO Julie Delvecchio said the proposed fuel excise cut won’t lead to savings as much as motorists switching to EVs, while the New Vehicle Efficiency Standard (NVES) is already set to save Australians money at the pump.
“In a cost-of-living election, all MPs and parties need to support measures that cut costs for Australian motorists as much as possible and for as long as possible,” Ms Delvecchio said in a media statement.
“The most immediate and effective way to cut people’s bills is by helping them to drive more fuel-efficient cars, including EVs.
“Cutting the fuel excise may save motorists $700 for one year but switching to an EV saves more than four times that – up to $3000 per year, every year.
“There are more than 300,000 voters driving EVs in our suburbs, including over 50 per cent of them in our outer suburbs and regions, who will be looking for MPs and parties that will help them to continue saving money.
“People living in the outer suburbs are leading the way in EV adoption – they generally drive more and recognise the substantial savings that come with electric driving. We should be accelerating the adoption of cheaper-to-run electric vehicles for all Australians, especially those in the outer suburbs and regions.
“We’re seeing EVs now for as low as $30,000, lowering upfront costs that have previously hindered Australians from making the switch.
“The NVES is saving Australians money at the pump as cars become more fuel-efficient and as more motorists switch to electric vehicles. There is no evidence that NVES is driving up new car prices, and penalties for high polluting cars don’t kick in until 2028.
“This May election is pinned on cost-of-living – Australians are looking for bold and lasting measures that will keep their costs down for good.
“Supporting greater uptake of battery electric vehicles and plug-in hybrid electric vehicles through incentives and through the New Vehicle Efficiency Standard will achieve this.”
While the NVES came into effect on January 1, 2025, carmakers won’t be penalised for exceeding CO2 targets until July 1, 2025.
All new passenger and light commercial vehicles sold with a mass of less than 4.5 tonnes are covered under the scheme.
If carmakers exceed an average carbon emissions target on the vehicles they sell each year, they will be penalised $100 per g/km of CO2 for every vehicle which exceeds the target.
These CO2 caps will reduce every year until 2029, forcing manufacturers to sell increasingly efficient vehicles.
The EVC isn’t the only peak body to speak up against the fuel excise cut proposal, with the Australian Electric Vehicle Association (AEVA) claiming lowering the price of fuel would “act as a disincentive to buying fuel efficient or electric vehicles”.
The organisation also warned “slashing [the] fuel excise would not only limit a key revenue stream used to fund government services, the cheaper fuel will actually result in more kilometres being driven”.
“As a cost-of-living relief measure it might prove popular in the short term, but delaying the switch to electric vehicles only costs you, our fellow citizens, and the planet in the long run,” AEVA President Dr Chris Jones said in a media statement.
“If you’re going to deliberately reduce fuel excise as a cost of motoring, you better have a universal, mass × distance road user charge ready to replace it.
“There is a need for road costing reforms. We just want to ensure that it’s fair, doesn’t discourage EV ownership, and doesn’t perversely result in more fuel being burned on our roads and more people suffering ill-health.”
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