Bills

Motor Vehicles (Electric Vehicle Levy) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 23 September 2021.)

The Hon. S.C. MULLIGHAN (Lee) (12:24): After more than two years of delay, finally the government has garnered the wherewithal to bring this failed piece of public policy to the parliament's attention. In my time in parliament, this is one of the most disingenuous attempts at policy reform that I have seen. It was sold to the community as being necessary because, to quote both the Minister for Energy and the Treasurer in the other place, electric vehicle owners apparently do not pay their fair share for the upkeep of the roads. That is not a bit misleading; that is a lie. That is completely wrong, and it is deliberately put about the community in an attempt to deceive them in order to—

The Hon. D.C. VAN HOLST PELLEKAAN: Point of order, sir: the member opposite has just accused me of lying and deliberately deceiving people. I ask that you direct him to withdraw and apologise.

The SPEAKER: The member having taken exception to the reference, I do ask the member for Lee to withdraw those remarks.

The Hon. S.C. MULLIGHAN: I withdraw and apologise.

The SPEAKER: The member for Lee has the call.

The Hon. S.C. MULLIGHAN: The Minister for Energy and the Treasurer have deliberately set about telling the community information which they know is wrong—they know to be wrong, sir.

The Hon. D.C. VAN HOLST PELLEKAAN: Point of order, sir: you have just asked, and thankfully the member opposite has just withdrawn and apologised for saying that I lied and deliberately misled people. Now he has just repeated his accusation that I have deliberately misled people, and that is untrue. I ask you to ask him to withdraw and apologise again and not do it again.

The SPEAKER: On the point of order, the expression that the minister took exception to is no more or less in order when put in a different form. In the circumstances, I do ask the member for Lee to withdraw and apologise.

The Hon. S.C. MULLIGHAN: I withdraw and apologise. We all know the member for Stuart, we know the sort of character he is, and I stand corrected. I understand that the member for Stuart could not possibly have known how wrong the information was that was being spread about by the government of which he is a member about this electric vehicle tax. To claim, falsely, that electric vehicle owners do not pay for the upkeep of the roads is blatantly wrong. It astounds me that a cabinet, let alone a minister who is a member of a cabinet, could consider a cabinet submission, which I am sure was appropriately and carefully drafted and only contained accurate information, could have allowed themselves to make a decision on the basis that it was trying to correct a wrong that simply did not exist.

These are the facts: every motor vehicle driver in South Australia pays a fee in order to have a driver's licence. Every vehicle that traverses our road network is required to be registered. The cost of that registration, along with those driver's licence fees, is hypothecated by law into the Highways Fund. It is the purpose of the Highways Fund to maintain our roads. Every single motorist pays those two charges. They have to be licensed to drive, and the vehicle in which they are driving has to be registered. It does not matter whether it is an internal combustion engine powered vehicle or whether it is a battery electric vehicle or whether it is a plug-in hybrid electric vehicle, all of those vehicles must pay the same registration, and all of those drivers driving those vehicles must be licensed.

It is clear that that information, which we were told was the reason that this policy was being introduced by this government, is blatantly wrong. They go on to say that electric vehicles do not use petroleum products in order to power them, and petroleum products, like unleaded petrol or diesel or other forms of petroleum products, are subject to the federal fuel excise, and that is what goes into maintaining our roads.

Well, that is wrong as well, blatantly and knowingly wrong. How could the government put around that information when it is clearly wrong? The fuel excise is not hypothecated into funding our roads here in Australia, and certainly, given that it is a federal tax, it is collected at the national level and certainly is not hypothecated into the funding of South Australian roads. So the entire premise of introducing this tax is based on misinformation from this government, and that is outrageous.

If you are going to pose a policy change, then it is an obligation of the government of the day to not only explain what is the policy change but also be accurate as to the reasons why. The only reason this policy change has been introduced by this government, pursued by the Minister for Energy and the Treasurer in the other place, is simply to raise more revenue. There is no other reason whatsoever. The introduction of this electric vehicle charge is not consistent with any COAG-mandated policy reform, let's be clear about that. There has been no decision at COAG or at one of COAG's subcommittees that this policy agenda be pursued, either collectively or individually.

So the further claim put about that 'Oh, well, Treasurers have agreed to do this' is wrong. There has been no communiqué of the Federal Council for Financial Relations that says all jurisdictions have committed to introducing this. This is simply an opportune time in the eyes of some to introduce yet another financial burden onto motorists, because when it comes to it this government have made an art form out of sticking their hands in the pockets of motorists.

Let's just look at their track record, shall we? Only a few years after the former Labor government reformed our CTP insurance scheme, which is now delivering motorists on average a cost saving of $100 a year per vehicle, this government have chosen to do the exact opposite when it comes to motorists and jack up costs. In the 2019-20 budget, what did they do? They increased motor vehicle registration costs by 10 per cent—approximately five times the increase you would normally expect during a year. That is what they did to motor vehicle registration costs; driver's licence fees, just the same.

But, absolutely egregiously, they increased by at least 30 per cent the administrative fee that everybody who transacts in a motor vehicle-related bit of business with Service SA has to pay, and that raised an extra $25 million a year from the change to one administration fee. Then it comes to all those fines and penalties that motorists sometimes find themselves the subject of, with speeding fines jacked up by nearly $20 million a year. This government even had the gall to criticise the former government for not spending the Victims of Crime Levy each and every year on victims. Other than the token effort of trying to look after Henry Keogh, what did this government do? They increased the Victims of Crime Levy by 50 per cent, now more than $90 per expiation notice and even more if it is a court-imposed penalty.

You do not have to take my word for it, sir: you can look at the budget papers. This financial year alone motorists are $100 million a year worse off under this government than they were previously under the former Labor government—$100 million. There are roughly, give or take, a million licensed motorists here in South Australia, so you do the maths: $100 million divided by that number of motorists. How much worse off is a motorist here in South Australia because of this government, because of the initiatives the Minister for Energy and the Treasurer in another place have pursued? About $100 each on average, that is how much worse off they are.

We were saving $100 a year from the former Labor government's CTP reforms, and what does this government do? Take all that back in increases to state government taxes, fees, charges, fines and penalties. That is how this government treats motorists, make no bones about it. None of that is refutable; all of that is fact from the government's own documents.

We then come to the issue of how this levy is actually to be raised. It was the Minister for Energy in this place, in response to questions without notice during question time, who suggested that perhaps it might be necessary to track the movements of vehicle owners so as to accurately ascertain how far they travel so that the levy can be applied.

Can you imagine? Can you imagine having the Minister for Energy and the Premier require the installation of some tracking device in your car? That is one of the principal reasons why, as much as transport bureaucrats like to come up with various proposals for reform at a national level, the vast majority of those proposals do not see the light of day because the vast majority of them are not relevant to the needs of South Australian or Australian motorists. Just in my experience of dealing with the National Transport Commission, that is why these proposals do not go any further.

South Australians and Australian motorists do not like the idea of their government of the day tracking where they go. In fact, as one former federal transport minister, now long retired, said to me, 'This won't go anywhere, Stephen, because people don't like their government knowing when they visit their girlfriends.' It is not quite the way I would have put my objection to having my movements tracked, but nonetheless that was the advice that came from that federal minister.

Now that proposal has thankfully been shelved as part of the introduction of this policy, we have the idea that somebody who has an electric vehicle must declare to the Registrar of Motor Vehicles, upon registering their vehicle, how far they have travelled in the last registration period. Maybe electric vehicle owners are all honest and maybe they will all declare it accurately, but maybe—if the government is right and other commentators about the motor vehicle industry in Australia are right, and as the number of electric vehicle owners proliferates in coming years—not all will be honest.

That raises the question: how will the government know whether an accurate declaration of the number of kilometres travelled has been given? This comes back to some sort of compliance regime, which the government does not speak about whether they have researched that or not. We do not know whether there will be the capacity for the government to reach into your odometer, from time to time, to try to ascertain information, should they suspect that you have not made an accurate declaration. Who knows? That sort of rich detail is yet another thing that has not been adequately thought through in the development of this regime.

The government would have you believe that this is a nationally mandated reform, which as I have already said is completely bogus, completely untrue and completely misleading. They say that as this has been introduced in another jurisdiction—so far, I understand, Victoria—we will be adopting their legislation insofar as possible, including setting the levy rate to apply per kilometre travelled. For a battery electric vehicle or for a plug-in hybrid vehicle, for example, that is either 2¢ per kilometre or 2.5¢ per kilometre.

In a rare moment of this government actually sniffing the wind and understanding how unbelievably unpopular their policy proposals are when it comes to tax reform—something they did not learn throughout the land tax debacle in 2019—they have said, 'Well, we will pass the law now, but we actually won't start implementing this for what we think will be about five years' time; who knows.' In five years' time, it is the government's expectation that 30 per cent of the light vehicle fleet in South Australia will be battery electric vehicles or plug-in hybrid electric vehicles. Well, that is going to require the J-curve of all J-curves.

The take-up rate of electric vehicles here in South Australia remains stubbornly low. While this government talk the talk on electric vehicles and supporting them, not only are they introducing a punitive taxation regime that cannot be justified on any basis—potentially scaring off purchasers of electric vehicles—but they have also done nothing to support their purchase by the local community.

At one minute to midnight—right at the last point of this legislation, looking like it is finally going to be brought to the parliament after two years of heel dragging by the government—they say, 'We are going to provide a grant of $3,000 per electric vehicle and that will stimulate the uptake. We have budgeted about $17 million or $18 million for it. We are expecting about 5,000 or 6,000 vehicles will be supported through that $3,000.' But here is the kicker: 'If you don't pass our tax, then we are not going to provide the incentive.' They think that this is some sort of sword of Damocles held over the parliament, some sort of bullyboy threat to try to convince us, to coerce us, into passing this measure.

We know that the threat of the tax far outweighs the small temporary benefit of that subsidy because do 5,000 or 6,000 vehicles get to 30 per cent of the light vehicle fleet? I am trying to think: do 5,000 or 6,000 vehicles constitute 30 per cent of the light vehicle fleet? I think there are 1.7 million registered vehicles here in South Australia. Admittedly, that figure includes buses and trucks, trailers and so on, but I think the number is something in the order of a million or even 1.1 million light vehicles. So to think that that temporary small measure is going to get in 30 per cent is laughable, absolutely laughable. This government are not genuine about getting us to 30 per cent. What they are genuine about is passing the tax so that it can be implemented no later than in five years' time.

This is being held out as being some sort of extraordinary policy reform, some sort of Keatingesque or Howardesque attempt at taxation reform according to the member for Schubert, who says that this has been long talked about at the national level but that finally South Australia is taking the lead. I know that the member for Schubert only had very brief occasion to go to transport infrastructure council meetings as minister, and those days are long behind him.

He might recall that the only discussion going on about road-user charging was for the heavy vehicle industry and not light vehicles, for the small proportion of vehicles on our roads that, incidentally, require the greatest cost being spent on our roads—that is, heavy vehicles, the one road user that have all their travel accounted for, including distance, location, destination and time for road safety purposes and also for business administration purposes. That was the only context that road-user charging was being discussed, not with regard to light vehicles.

The member for Schubert might want to ask himself: if this was such great taxation reform, why did it take until he vacated the chair around the cabinet table for it to actually come forward? Maybe it is because he knew that it was not a priority, that it was not such a great idea, or maybe just that once somebody else was in the chair who had more wherewithal and would finally have a crack at it. I do not know which of those two are true; nonetheless, a terrible idea it remains.

Now we are left with what the government's final argument is. That is, just like we have had a period of time in South Australia for the last 25 or 30 years when we have had a year-on-year indexation of government fees and charges, this government sneakily in this reform say that the charge per kilometre will either be 2¢ or 2½¢, depending on whether it is a plug-in hybrid electric vehicle or a battery electric vehicle.

What they do not tell you is that that applies in the past and that each year from then on—I think December 2019 or December 2020; I forget which of the two it is—those two figures are set, then those figures are indexed each year. So it actually will not be 2¢ or 2½¢ per kilometre, it will be five years of indexation at least above that. The question really is why the government would not be more open and more honest about what the actual levy rate is.

The last thing I will say is if this government wants to do something for motorists, let me make some suggestions of how they could make motorists' lives easier. Perhaps they could remove the proverbial finger and get on with some of the delayed infrastructure projects they have been dragging their heels on. Never has there been a term of government in recent history where a government has delayed and blown out infrastructure and transport projects like this government has.

Maybe they could stop going after motorists' hip pockets if they wanted to do something for motorists in South Australia. Maybe they could listen to some of their own backbench—or those who used to be on their backbench—about some of the transport priorities, for example up in the hills around Adelaide, if they wanted to do something for motorists.

If they want to do something for electric vehicle owners and the electric vehicle industry, maybe they could get serious about actually supporting the industry. Maybe they could provide a purchase incentive which will make a difference to the uptake of these vehicles throughout the light vehicle fleet, and maybe rather than just talking and putting out press releases about expanding a charger network they could actually get on with it. This is a dreadful idea, and of course we will not be supporting it.

Mr HUGHES (Giles) (12:46): I will just say a few words on the Motor Vehicles (Electric Vehicle Levy) Amendment Bill 2021. Clearly, we oppose the bill. The member for Lee has, I think, nailed the arguments put forward by the other side when it comes to this particular levy, so I will not go into detail about that.

One of the things we should always be mindful of, especially in the early stages of the startup of different technological approaches, is to not put barriers in the way, is to not flag disincentives. It is to encourage a direction that we are starting to go in as a nation, even though we are lagging well behind many other countries.

As a country member, I think electric vehicles are going to end up being a real plus. The capital cost has to come down, but the recurrent costs associated with electric vehicles are significantly less than for fossil fuel vehicles, and for that reason alone it should be welcome. One of the real bugbears for those of us who live in country electorates, and especially the more remote electorates, is the constant fluctuation of prices at the bowser as a result of a whole range of issues, global issues that impact upon what happens here in Australia when it comes to fuel pricing.

The shift to electric vehicles will facilitate a far greater degree of energy dependency and a consistency and a continuity when it comes to pricing, and far cheaper pricing when it comes to those recurrent costs of providing the energy for a vehicle. Of course, there is that other recurrent cost; the maintenance of a vehicle is also significantly less when it comes to electric vehicles, so we should be encouraging that.

I will flag that there is clearly potential also for hydrogen fuel cells when it comes to the vehicle market. A record was set just recently when a vehicle travelled 1,224 kilometres on 5.5 kilos of hydrogen. That technology is also improving but also needs to come down when it comes to capital cost, and it will do so.

It is worth reflecting that the aim with hydrogen is to get it under $2 a kilogram, so 5.5 kilos is not much hydrogen to travel well over a thousand kilometres in a particular set of circumstances, but nevertheless improvements are there. If you add the distribution costs, the retail costs and the fact that we can produce hydrogen in this country in the future, once again that improves energy independence. There are a couple of technology routes when it comes to our vehicle market that are worth contemplating.

One of the other elements when you look at the negative externalities when it comes to vehicle use is that many years ago I was playing with a proposition that even fossil fuel pricing at the bowser should be cheaper in the country given that the negative externalities of vehicle use in the country are less than in the city when you take into account the concentration of pollution and congestion in the city and what has to happen there. There is an argument for looking at those negative externalities.

One of the things about the introduction of either electric vehicles or hydrogen vehicles is it will address one of those important negative externalities because more people in this country die as a result of transport emissions than they do from vehicle accidents. That is something that is often forgotten. When it comes to electric vehicles or hydrogen fuel vehicles, we are going to end up with a far cleaner atmosphere and that will benefit people in our metropolitan areas.

There are a lot of pluses for going in this direction. I know that the people opposite are not opposed to electric vehicles, unlike what the Liberals had to say at a federal level, but this is the wrong way to go. We should be encouraging electric vehicles, not putting in place disincentives. I seek leave to conclude my remarks.

Leave granted; debate adjourned.