Taxing Electric Cars !

As the tax structure now stands the few people already owning electric cars are getting a huge advantage over the owners of petrol and diesel powered cars.  The government imposes a fuel tax to recover the cost of building roads and highway infrastructure and diverts much of that into what is euphemistically called" consolidated revenue " .    Since 2001 that tax has fallen by thirty percent due to the mix of electric and hybrid cars avoiding this " car fuel tax ".

Statistically, the people driving petrol or diesel powered cars are contributing tax at the rate of four cents for every kilometre driven and this is paid directly to the government every time they pull up at a fuel bowser.  It is a magnificently efficient form of tax collection.

There is the expectation that electric cars will begin to inundate the new car market and that by 2046 their share of the traffic stream will reach sixty percent.  Both the Federal and state treasuries are frantically mulling over plans to introduce a new tax regime to restore tax collected when electricity replaces oil and diesel as the car fuel.

Advanced thinking is already opting towards a tax based on charging car owners for every kilometre they drive but that is a lot more complex than just collecting tax at the fuel bowser.  It would probably work in  a similar manner to the charges that apply to mobile phones.  The more you use the phone, the higher the charges accrue.

Like the phone, a national grid would know the exact whereabouts of the car at all times and would apply charges accordingly whenever it moved.  Ideally, those charges would differ according to the time and traffic density.  A trip to the supermarket at a time of low traffic volumes would be taxed at a lower rate than using the car at a peak time of traffic congestion.  The change in timing would allow tax to be the determining factor in car use.  Tax would encourage people to use public transport in preference to driving when the economic factor dictated.

It is obvious that whatever system is chosen it will have to run in tandem with the existing fuel tax for many years.  Petrol/diesel cars and electrics will share the road during the changeover period and registration of an electric car will need to have its connection to a data base installed at the point of manufacture.   It is essential that there is uniformity between the Australian states so that this system is applicable Australia wide.

What is disquieting is that plans to tax electric cars is still at the discussion stage.  Given that any form of tax change is fraught in political diversity, it is not likely that a cohesive plan will emerge quickly and yet it will be urgently needed if the electric car revolution is to become reality.  The statistician tells us that by 2050 the cities of both Sydney and Melbourne will have population totals exceeding eight million people.

With a little forward planning, this could be the ultimate answer to the nightmare that is fast descending onto Australian roads.  Too many cars trying to reach a common destination - resulting in overload.  Only a tax relating to the time of use will solve that dilemma.