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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
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Motor Vehicles (Electric Vehicle Levy) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 12 October 2021.)

The DEPUTY SPEAKER: The debate on the Motor Vehicles (Electric Vehicle Levy) Amendment Bill is underway. It is open to any member to contribute to the bill now. Having said that, if the minister speaks now, he will close the debate. I invite members to speak. If not, I will call the minister.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (16:25): Yes, I do close the debate. I would like to make a few comments on some of the things that have been mentioned by members opposite over the last few weeks because this debate has been in here over two successive weeks of parliament with two weeks without parliament in between, so I take members' minds back a bit.

Let me just start by saying that we are not trying to do anything unusual at all with this bill other than apply it to a new type of vehicle. That new type of vehicle, being an electric vehicle by definition, cannot contribute a fuel excise through the purchase of petrol or diesel in the way that combustion and compression engine vehicles can, so we are finding a different way to apply essentially the same type of charge.

That is not the only way that motorists contribute towards taxes essentially, but it is a way that motorists contribute towards taxes that is directly proportionate to the amount of road use that they undertake, so it does make good sense to us to do it this way. There is nothing that is not completely transparent with regard to the way we are going about this. We are trying to replace a tax for a particular and very clear set of purposes with essentially as close as we can make it the same sort of tax for the same sort of purposes, but it does require a different mechanism.

What we are doing, because we are of course very supportive of the transition from diesel and petrol motors to electric vehicles, particularly in the passenger car market, is we are trying to essentially give an incentive to motorists and potential purchasers of electric vehicles to purchase as soon as possible, as soon as they are able to. Quite contrary to the comments from the deputy leader, which were along the lines that we should read the room and we should stop slowing down the decarbonisation, we are actually speeding up the decarbonisation. We are giving people an incentive to take up these vehicles.

In fact, we have a very direct and useful example of this with regard to our home battery subsidy scheme. Home batteries are still quite expensive and do not quite stack up commercially in terms of the purchase and the payback period and the reduction on your electricity bills in the time that people would like it to happen. They do not quite get there yet, so we have offered a subsidy. Members know that we have offered that subsidy to help with that purchase so that it is commercially attractive.

One of the things that we have done as part of that is we have made it very clear that the subsidy would be more generous at the start of the program and the subsidy would decrease over time. The reason we did that very specifically is that we wanted to encourage that purchase and we also knew that, once the volume of purchases grew, the retail cost of the item would decrease, and so over time the cost to the consumer would decrease, even with a reducing subsidy.

In the last three years, we have dropped the top rate of subsidy for the home battery scheme from $6,000 to $2,000—a $4,000 decrease in the taxpayer-funded subsidy towards those batteries. In that same time period, the cost of the batteries themselves, on average, through the scheme has dropped by $4,700. Those households purchasing a home battery today with a maximum $2,000 subsidy are $700 better off from the net purchase price than those households that purchase the battery up-front with a maximum $6,000 purchase.

Apply that to electric vehicles. We are offering, as members know, a $3,000 subsidy toward the purchase price of a vehicle for the first 6,000 new electric vehicles that are purchased. That is being done very deliberately, in the same vein that I have just outlined for the home batteries. It is nothing to do with slowing down the decarbonisation. It is nothing to do with trying to put things off. It is actually about trying to encourage people, to support people who are able to buy these vehicles and, by doing so, bring down the cost of these vehicles so that in time—and hopefully not too many years—a subsidy will not be required.

We know that the cost of electric vehicles is coming down. We are told that the cost of an electric vehicle will be comparable to a petrol passenger vehicle in around about 2025. We are doing everything that we can to help people get to that point in time. Importantly, the manufacturers of these vehicles—which are currently more expensive than the average car purchased—their argument, understandably, is, 'Well, we're already price competitive if you compare our make of vehicle with a BMW or a Mercedes or another expensive and high-quality vehicle'. They say they are already cost competitive. That is true, of course, but we are not making that comparison.

We are comparing the average family with the average income and the average set of household costs and a mortgage, etc., to the average passenger car vehicle they would try to purchase at the moment. We want the electric vehicles to get competitive at that level, not with the Mercedes/BMW top tier, which the current manufacturers quite rightly claim, but with that description.

We are doing these things very deliberately. We are also investing in a recharging network. We have $18.3 million for our Electric Vehicle Action Plan, which includes $13.4 million to contribute to taxpayers co-investing with private industry to get a network of a bit over 500 recharging stations—many of them being fast-charge stations—so that purchasers and potential purchasers of electric vehicles can have confidence that wherever they go they will be able to charge their vehicle.

We have this chicken-and-egg problem: quite understandably, nobody wants to purchase an electric vehicle if they are not confident that they can charge it anywhere they may choose to go, even if the chances of them going to some of these places is quite slim. Quite understandably, they still want to know that, if they did decide to go there, that they could.

We are looking at the entire country, from Western Australia in the west, Northern Territory, to Victoria and New South Wales in the east, and of course metropolitan and CBD Adelaide. We are doing that because we are doing everything we possibly can to encourage the uptake of electric vehicles—helping with the purchase price, helping drag down the cost of the vehicles, helping with that range anxiety by rolling out, in partnership with industry, the recharging network.

Another thing that we are doing, which is the key focus of this bill, is deferring the road user charge. The road user charge, as I said at the start of my closing remarks, is very transparent. It is very straightforward, and it is a way of replacing existing taxpayer income to the government, to be spent on behalf of the public, that is collected one way with another in another way.

In the effort to contribute to the uptake of electric vehicles, another thing we are doing is deferring it. We are deferring it until 2027 or until 30 per cent of all new vehicles purchased in South Australia are electric vehicles, whichever comes first. We are advised that the 30 per cent mark is likely to come before 2027. What that may invite is a criticism, where you are talking about 2027 or the 30 per cent, but it is actually not 2027. Opponents of this transition will say, 'You are actually going to start to tax people sooner.'

I would say we are going to start to apply this road user tax if it is sooner, when 30 per cent of all new car sales are electric vehicles. I think that is very fair and very reasonable. It means that 30 per cent of all new car purchases have been able to do that over the time, from whenever this bill comes into effect—if it comes into effect, if it is the will of both houses—through until that point in time. Essentially, it is not a new tax other than by mechanism. It is actually a deferral of a tax, and I think people really do understand that.

The member for Lee made some remarks with regard to fuel excise not being hypothecated. Yes, that is accurate, but what I have said in this contribution is also accurate, that it is a tax collected based on the amount of road use that road users use: you drive less, you pay less; you drive more, you pay more. It is a tax under this road user framework which would be used the same way as the fuel excise is used. This is not about raising extra taxes. It is about trying to have a very fair transitional system with a deferral, with three types of incentives—which I have already described—for people to take up electric vehicles.

The member for Lee also mentioned that this has not come from COAG, and that is true, and we have never suggested that. This is not a COAG initiative, but it is something that South Australia, Victoria and New South Wales are all doing broadly, simultaneously. We are all implementing extremely similar ways of making this transition from majority almost all vehicles—certainly percentage-wise—being petrol and diesel in the passenger car market, trying to make that transition so that we can encourage more and more people to take up electric vehicles as their price comes down. So, no, it has nothing to do with COAG whatsoever, but it was never suggested that it has. However, it is important to recognise that New South Wales, South Australia and Victoria—both Liberal and Labor governments—are pursuing this in a very similar vein.

Based on the advice I have been given, I am extremely confident that in the future—including the road user charge being applied in a few or several years time, whenever that may be—the cost of purchasing, owning and operating an electric vehicle across the life of that vehicle will be cheaper, including a road user fee, than it is currently for typical passenger vehicles with petrol and diesel. This is completely consistent with our government's focus on reducing the cost of living.

We have reduced the cost of electricity bills for the average South Australian household by $303 since coming to government. We have reduced the cost of water for the average South Australian household by approximately $200 per year. We have reduced natural resources management levies, or landscape board levies, as they now are. We have reduced the emergency services levy. In fact, we have also reduced land tax for 75 per cent of all land tax payers. We are doing everything we possibly can to support South Australians in that way.

To the issue raised about the collection of the levy, I accept that this is an issue that will get more detail provided in terms of exactly how that levy will be collected. The member for Lee spent a fair bit of time talking about one of the options that has been canvassed, as is his right. Let me just say that we will do this in a way that is practical, that is fair, that is as non-intrusive as possible. We do expect that it will be something as simple as mileage or kilometrage being recorded when cars have services or maybe an annual self-reconciliation or perhaps at time of re-registration. That is the most likely outcome. I do not think that is anything for people to be concerned about.

The maintenance of most new cars is pretty straightforward. May I say personally that unfortunately we are not in a world anymore where a capable person can do most of the maintenance on their own vehicle in their own driveway or their own garage. Most new car maintenance these days is done through an accredited dealer or some other capable qualified workshop. I do not think it is going to be a concern at all. People's mileage already gets recorded every time they put a vehicle in. Even just for new tyres, the mileage is recorded. Every time somebody sends a vehicle off for any kind of professional service, the mileage or the kilometrage is recorded, so this, we expect, will be no different, as I said, whether it is at registration, etc.

With those remarks, hopefully summarising why we are doing this and hopefully addressing satisfactorily some of the concerns raised by those opposite in their contributions, I commend the bill to the house.

The house divided on the second reading:

Ayes 24

Noes 21

Majority 3

AYES
Basham, D.K.B. Chapman, V.A. Cowdrey, M.J.
Duluk, S. Ellis, F.J. Gardner, J.A.W.
Harvey, R.M. (teller) Knoll, S.K. Luethen, P.
Marshall, S.S. McBride, N. Murray, S.
Patterson, S.J.R. Pederick, A.S. Pisoni, D.G.
Power, C. Sanderson, R. Speirs, D.J.
Tarzia, V.A. Teague, J.B. Treloar, P.A.
van Holst Pellekaan, D.C. Whetstone, T.J. Wingard, C.L.
NOES
Bedford, F.E. Bettison, Z.L. Bignell, L.W.K.
Boyer, B.I. Brock, G.G. Brown, M.E. (teller)
Close, S.E. Cook, N.F. Gee, J.P.
Hildyard, K.A. Hughes, E.J. Koutsantonis, A.
Malinauskas, P. Michaels, A. Mullighan, S.C.
Odenwalder, L.K. Piccolo, A. Picton, C.J.
Stinson, J.M. Szakacs, J.K. Wortley, D.

Second reading thus carried; bill read a second time.

Committee Stage

In committee.

Clause 1.

Dr CLOSE: I would like to use clause 1 as an opportunity to ask some general questions about the consultation that was undertaken and with whom in the market, what kind of market research was done about the possible impact of a tax on electric vehicles, and whether any other jurisdictions were looked at outside Australia where the electric vehicle taxes are in place now, if there are any, to see what impact they have?

The Hon. D.C. VAN HOLST PELLEKAAN: I am advised that a targeted public consultation process was undertaken by the Department of Treasury and Finance in March and April this year. Eighteen submissions were received as part of the consultation process from industry bodies, manufacturers and interest groups. A copy of the consultation document was also made available on the Department of Treasury and Finance website, along with a consultation inbox where comments could be submitted.

The final package considers feedback received through the consultation process and allows the market for electric vehicles to develop further before commencing new charging arrangements. The design also has regard to the similar arrangements introduced in Victoria and that proposed in New South Wales. To round out that question, I am advised there was not any consultation with any international jurisdictions, but certainly other states and territories apart from Victoria and New South Wales were consulted.

Dr CLOSE: With the 18 responses that were received, what was the split in those who thought it was a good idea to have an electric vehicle tax and those who did not?

The Hon. D.C. VAN HOLST PELLEKAAN: The first thing to say is that the consultation did not include a straightforward 'Does an organisation or person agree or disagree?' so there is not really an answer that I can share with regard to that particular part of the question. But to help the deputy leader, there were several questions that were part of this Road User Charge for Zero and Low Emission Vehicles: Consultation Document, which I am sure is publicly available from the Department of Treasury and Finance website. But for the deputy leader and the house, the questions included:

Why is this being introduced?

Who will pay the charge?

What is the proposed rate?

When will the proposed user charge apply?

How will the charge be calculated and paid?

How much revenue will the road user charge raise?

They were the questions posed, with intended answers and things like that as well. They are the topics that the Department of Treasury and Finance sought advice on. I know from my own consultation and receipt of feedback as Minister for Energy and Mining, as the lead minister for electric vehicles as distinct from me doing this specifically on behalf of the Treasurer—but, of course, they are closely aligned—the reality is that there is mixed feedback ranging from, 'We don't care what you do; just help get as many electric vehicles in as possible,' all the way through to, 'No tax is any good. Don't charge a tax. We don't care,' and lots more in between. I certainly acknowledge that there is a range of feedback that I received, and I know that much more detailed feedback was received from that structured consultation process.

I would also like to point out that the structured consultation process was undertaken before the $3,000 per vehicle for the first 6,000 vehicles subsidy was announced. So I am very confident with whatever that feedback was; that is the feedback that was in place which was the foundation of us progressing this bill. If we were to do exactly the same process again it would be far more supportive than what it was last time because now we also have the $3,000 subsidy in there as well.

Dr CLOSE: My third question on this clause is: when the government was considering the merits of introducing a vehicle usage tax for electric vehicles, recognising that that was considered contemplating declining revenue via the federal government from the fuel excise tax (a proportion of which is often spent on road infrastructure even if it is not hypothecated), did the government contemplate the impact of lower emission vehicles by virtue of being four cylinder, and so on, and that their proportion of the road fleet has had a more significant impact in declining fuel excise than electric vehicles at present?

Did the government contemplate all the kinds of cars that drop the amount of fuel excise that is available, and therefore did the government at any point contemplate a broader vehicle usage tax than simply the electric vehicles?

The Hon. D.C. VAN HOLST PELLEKAAN: The answer to that is no, I am advised.

Clause passed.

Clause 2.

Dr CLOSE: I believe that the member for Lee will also have a question on this. Over the page, on the second page of the bill under clause 2 there is a definition of the prescribed days. This is where we get to an understanding of the trigger for this tax coming in, which is that the Treasurer is reasonably satisfied that the sales of battery electric vehicles in South Australia will be 30 per cent of new motor vehicle sales.

How did the figure of 30 per cent get determined? What is the magic that sits behind that, which says that, at that point, it might not be a disincentive to have a tax but it might be necessary in order to try to get the revenue that the government feels it is losing through the fuel excise? What was the idea around the 30 per cent?

The Hon. D.C. VAN HOLST PELLEKAAN: There is no magic behind the number 30 necessarily. It is not determined that 30 per cent is particularly magical in itself, but there are some reasons why 30 per cent was chosen, and 30 per cent is a lot better than 20 per cent, it is a lot better than 10 per cent and it is a lot better than zero per cent, which is what Victoria has chosen to do.

Victoria has introduced the tax immediately. We did not want to do that for the reasons that I provided in my closing remarks in the second reading. We wanted to make sure that we did have that incentive. I am sure that some people's perspective is, 'Well, why not 40, 50, 60, 100?' The tax does need to come in at some stage keeping in mind, again, that it is a replacement charge.

Thirty per cent of new vehicles is determined to be a very significant chunk, not all but a very significant chunk, of new vehicle purchases. I think any fair reading would say that they are a very genuinely attractive component of new car purchases when they get to 30 per cent. We want it to be much more than 30 per cent. We want one day for it to be 100 per cent or hydrogen or something like that.

The other reason that 30 per cent was chosen was that, as well as the consultation South Australia did, 30 per cent is what the New South Wales government identified also, so there were some benefits and consistency in that regard and we had a strong preference to be consistent with New South Wales' 30 per cent rather than Victoria's zero per cent.

The Hon. S.C. MULLIGHAN: My understanding of the 30 per cent target is that it would be 30 per cent of light vehicles, not all vehicles, in South Australia. Can I ask how many light vehicles are sold each year in South Australia? I suspect the number is somewhere in the order of 90,000 or 100,000 a year. How many are battery electric vehicles?

The Hon. D.C. VAN HOLST PELLEKAAN: Member for Lee, it is 78,000 to 80,000 new vehicles purchases, so pretty close to the estimate that you said. You used the term 'light vehicles'. I think I used 'passenger vehicles' before. I am sure we are talking about exactly the same thing. Yes, that is what we are targeting. It is certainly not heavy industry, public transport, etc. I am advised that approximately 500 of those vehicles are electric vehicles at the moment, but of course part of what we are doing is trying to increase the attraction and increase that number very significantly.

The Hon. S.C. MULLIGHAN: I am grateful to the minister for that answer. So currently 500 sales a year, give or take, are battery electric vehicles of approximately 80,000 vehicles a year being sold, so that is 0.6 per cent of new car sales at the moment. That is the base, and we are anticipating getting to 30 per cent, so what is the trajectory that your department or Treasury has modelled over that six-year period to 2027 in order to get to 30 per cent?

The Hon. D.C. VAN HOLST PELLEKAAN: The first thing to say is that I am advised that the modelling is actually quite challenging because we are talking about such a low base. The member for Lee's quick calculation in his head was 0.6 per cent. I have it at about 1 per cent in my mind, so it is currently somewhere in that range. The forecasting is certainly challenging. In my work as energy minister with regard to electric vehicles, I have been advised that the take-up will come more quickly than most people expect, but let me share some specific advice that I have been given:

Forecasts of electric vehicle take-up rates are subject to a high degree of uncertainty and vary between forecaster. They are particularly sensitive to assumptions about the purchase price of electric vehicles and model availability. The longer the forecast timeframe, the higher the uncertainty in the forecast.

DTF considered multiple external sources for its modelling of zero and low emission vehicle uptake in SA, including from the Bureau of Infrastructure, Transport and Regional Economics, the Future Fuels Strategy, (Department of Industry, Science, Energy and Resources), and the Australian Energy Market Operator.

For modelling purposes, the growth in zero and low emmission vehicles [is] broadly consistent with the Commonwealth Government Future Fuels Strategy document that has been utilised.

I cannot give you an exact number on what date or what month we expect that to happen, but we are dovetailing our predictions the best we possibly can with interstate and federal advice.

The Hon. S.C. MULLIGHAN: I am always grateful for the minister's responses. I am not sure that, other than our variation on 0.6 per cent or 1 per cent, there was any additional information included in his answer. As I understand the government's priority here or the government's estimate, it is that we are going to get to 30 per cent.

So we are going to get from 500 sales a year and, even on the basis that the number of new car sales in South Australia remains static over the next six years, that it remains at 80,000 a year, which it will not—it will, of course, incrementally increase roughly I guess in line with economic growth or whatever, but let's say for argument's sake, 80,000 a year—we have to get from 500 to 30 per cent, which is 24,000 in a six-year period. That is an aggressive growth rate, I think the euphemism would be.

I understand from the minister's answer that you might take BITRE's estimates of sales. I guess what I want to know is: what are the government's estimates about how many battery electric vehicle and plug-in hybrid electric vehicle cars will be sold in South Australia each year over the next six years? Does the government have a figure or not? If the answer is, yes, it has a figure, what are those figures for each of those years?

The Hon. D.C. VAN HOLST PELLEKAAN: I will take the specifics of that question on notice because I do not have that information here with me. If there is something along those lines that can be provided between the houses, then certainly we will do that. I know that the modelling has been done but, as I said, the modelling is a challenge; there is no doubt it is a challenge. I certainly agree that it will be a very steep uptake for those numbers to be achieved before the 2027 date comes along, but I can also advise the house that most people I talk to in the industry, proponents, are very bullish about this uptake.

For the purposes of this bill, though, the reality is that it is 30 per cent or 2027, whichever comes sooner. I am not sure whether the opposition's support or otherwise for this bill would be different if the 30 per cent was expected to come before 2027 or if the 30 per cent was expected to come after 2027, but that is a matter for the opposition. Regarding specifics that I and/or the Treasurer are able to provide with regard to the clear question, which was how many of these electric vehicles will be estimated to be sold in each year, if it possible to provide that information, then I certainly will.

The CHAIR: Are you seeking clarification on something?

The Hon. S.C. MULLIGHAN: I am seeking clarification. I am most grateful, and I know how much, sir, you enjoy the anecdotes sometimes I commence my questions with during the committee stage.

The CHAIR: Indeed. We could swap anecdotes some time.

The Hon. S.C. MULLIGHAN: I do not want to disappoint you, so I have prepped another one for you. I can remember—and it is one of the very few things I remember about my mathematics classes at school because it is fair to say, consistent with my school reports, I was not the most attentive student in that particular class—when my teacher was trying to teach us about exponential growth and numbers to the power of other numbers, the ancient fable about grain and the chessboard, which you may recall: place a grain of wheat in one square and then double the number of grains of wheat in each subsequent square until students are convinced that all the grain in the world could be theoretically accommodated within a chessboard, such is the power of exponential growth.

It occurs to me that even if we had exponential growth in the number of electric vehicles each year over the next six years, we would struggle to get to 15 per cent or so of motor vehicle sales here in South Australia. In the event that we do not get to 30 per cent, and despite the bullishness the minister says the industry is forecasting for growth, I understand that the government has basically set up a scenario with this bill whereby it will provide a limited number of grants of $3,000 for people who buy a battery electric vehicle or a plug-in hybrid electric vehicle from I say now on but, presumably, the passage of the bill if it does pass, up until those grants are exhausted.

Of course, if the bill does not pass parliament, those grants will not be provided. I think that is what the Treasurer has tried to establish as his sword of Damocles over the parliament's head. They are effective, as they have proven to be with retail shop trading hours reform and so on. Can I ask the minister: is it his understanding that, if the bill does not pass, the some $18 million committed by the government for those $3,000 grants will not be provided for that purpose and will be, to use the colloquial expression, taken off the table?

The Hon. D.C. VAN HOLST PELLEKAAN: A few things: I do remember my maths pretty well, but I barely read a book in high school, but we both got here, and probably because I never read a book, or barely read a book in high school I do not know what a sword of Damocles is either, so the clarification that you offered is fairly lost on me, but I think I have the general picture.

We have had extraordinary exponential growth in the uptake of electric vehicles in the last six years, from next to nothing to 500. To use the exact analogy that you use, if that were to continue, we should be very optimistic about where we are going to get to with regard to the uptake of electric vehicles. Nonetheless, if I am a bit more optimistic and you are a bit less optimistic, that is the right we both have.

The contribution to electric vehicle uptake—and I just want to be careful about this, but I think I know what you meant—in the $18.3 million in the Department for Energy and Mining's Electric Vehicle Action Plan remains on the table. The $18 million attached to the $3,000 subsidy for 6,000 vehicles is definitely linked to the passage of this bill, just to clarify that point.

Lastly, if it happens that the member for Lee's assessment of the uptake of electric vehicles is more accurate than mine, or his assumptions are more accurate than my assumptions and there is a much slower uptake than my personal assessment will be, that means a replacement charge would come in at 2027 and it would apply to a much smaller number of motorists.

Dr CLOSE: My final question on this is: why have both dates? What if you just allow it to be at 30 per cent if you are confident that that will happen reasonably quickly? I appreciate that there is no magic to the 30 per cent, but there is a logic, at least from the government's perspective, that it means electric vehicles are well established as part of the purchasing decision-making by members of the public and therefore a tax, in your argument, I suspect, would not be enough of a disincentive. Why not allow that to happen? Why set the date of 2027?

The Hon. D.C. VAN HOLST PELLEKAAN: The answer to the question is in part because it is comparable to what New South Wales is doing, and we are doing our very best to make this as consistent as possible between the states. As I said, Victoria is bringing it in effective immediately or straightaway, and we did not want to do that. The other way to look at it, which is probably more relevant, is that it is six years of forward notice, six years of forward notice about a road user charge coming in to replace existing tax income connected to road use.

Six years of forward notice is, I think, long by just about any person's judgement. We also want to have that incentive for the uptake of electric vehicles much sooner rather than later. If we were to leave it at just 30 per cent without a date and let it happen organically, just as it might, it might happen slower. If people know that there is a date, then it might happen faster. We do want to give an incentive for people to take up electric vehicles more quickly rather than more slowly.

Clause passed.

Clause 3 passed.

Clause 4.

Dr CLOSE: In the definition of 'electric vehicle' there is reference to both a fully plugged in car—the only source is the electricity that it is plugged into—and the hybrid version, which is still a plug-in but also has a combustion engine. I am asking this question here; you could ask me to ask it when there is a differential a little later on 2¢ versus 2.5¢.

I would like to understand what modelling was done, what understanding of the fuel usage on those two different kinds of vehicles is there to understand the fuel usage on those two different kinds of vehicles to understand the fuel excise that a plug-in hybrid is paying versus, obviously, none for a fully electric car. I have had feedback from advocates for plug-in hybrids that the distance travelled by many people in those with 2.5¢ indexed would be paying more in combined taxation than the electric vehicle would be.

The Hon. D.C. VAN HOLST PELLEKAAN: That is a very fair question in terms of where are we going. I am advised that it is largely based on modelling, a range of different modelling, that estimates usage, etc., recognising the fact that a hybrid vehicle does still pay some fuel excise. You can go a long way without using any fuel in a plug-in hybrid. Another driver and another model might use a great deal of fuel. It is challenging, but there is a recognition that the charge would be lower because there is still a contribution to road usage through the fuel excise.

It is also interesting if I compare let's say a metro or a CBD owner of a fairly small hybrid vehicle that is around the city and sometimes around the suburbs and rarely in the country usage versus a taxi. Just about all taxis now are hybrid vehicles doing however many tens of thousands of kilometres a year or more, I am sure in some cases. There is a challenge to getting it just right for every single user, but that is why we do come back to a per kilometre charge to try to address those issues. Then, of course, the 2.5¢ for fully electric vehicles recognises the fact that they are not paying any fuel excise.

Dr CLOSE: This is really a clarification and it might be that it needs to happen between the houses. I think the expression used by the minister was 'a range of modelling'. It would be useful to know what modelling, who provided it and where it came from—a bit more so that it can be scrutinised as well by the interest groups who are raising these issues with me and the people in the Legislative Council.

The Hon. D.C. VAN HOLST PELLEKAAN: Yes, deputy leader, I am happy to provide whatever the Treasurer is happy to provide between the houses.

Clause passed.

Clauses 5 to 7 passed.

Clause 8.

Dr CLOSE: Within clause 8 on page 5, talking about the prescribed rates, the 2¢ indexed and the 2.5¢ indexed, what is the estimation of what those figures become by 2027 once indexation is taken into account?

The Hon. D.C. VAN HOLST PELLEKAAN: The estimate for the 2¢ by 2027 is 2.3¢ and the estimate for the 2.5¢ is to become 2.8¢ by 2027—both those numbers by 2027. But, as I am also advised, that is today's estimate. They will be realised based on actual CPI numbers. It may be higher, it may be lower. Higher would presumably mean a stronger economy and lower would presumably mean a less strong economy. We will see, but they are the estimates.

Dr CLOSE: So then how does that translate for the median and the average vehicle for the cost that they are likely to be paying, the median distance and the average distance for the annual cost, the additional charge that will go on the registration?

The Hon. D.C. VAN HOLST PELLEKAAN: I am advised that for the 2027-28 year, the average for the 2¢ rate is expected to be $280, and for the 2.5¢ rate—or 2.3 and 2.8, as they would be in that year—$340. The specific answer to your question is $280 and $340, and I am advised that that is calculated on an estimated annual travelling of 12,200 kilometres.

Dr CLOSE: Just to be clear—and you may not have it here—I was also interested in the medians, which is the one that most people will experience rather than the average, which necessarily has to take account of the extremes at either end. If you do not have it now, I am happy to receive that between the houses.

The Hon. D.C. VAN HOLST PELLEKAAN: Just to confirm, yes, the 12,200 is an average. If it is possible between the houses, we will certainly provide a median.

The Hon. S.C. MULLIGHAN: Could the minister, under this regime, talk us through the process of reregistering a vehicle? Let's presume at some point in the future, he is driving his battery electric Prado across the Mid North of South Australia and needs to reregister the vehicle. What would that process look like, either doing it online through EzyReg or doing it at a Service SA centre?

The Hon. D.C. VAN HOLST PELLEKAAN: A couple of things to try to be helpful: I think the question is about once the replacement road user fee is in place but, just in case it was about the transition, any electric vehicle that is purchased will have a registration system at some point in time, depending on the purchase. The road user charge may be applied. But I think what the member is really asking about is: once that is in, how does it actually work?

The charge will be calculated and applied as part of the vehicle registration process. When a relevant owner registers his or her vehicle, he or she will be required to enter the odometer reading as part of the registration process. The road user charge will be calculated based on the distance travelled since the last registration renewal or perhaps the first registration, less any declared travel on private roads. This approach is intended to minimise the administration burden associated with the new charging arrangements by leveraging off the existing registration arrangements.

Whether a person does it online or whether they go into Service SA, they will just be asked, 'What is your current odometer reading?' There will be an option to make a deduction, essentially, for travelling on private roads, and my understanding of that is that it is like off-road diesel. There are operators who have vehicles that might do completely off-road work, such as a lot of farm vehicles and station vehicles. Some of them never actually go on a road. There are mining companies, for example. There is a range of different reasons why essentially currently there is an exemption from the fuel excise for some motor vehicle use of that fuel, trying to make sure that benefit still exists.

For example, I had the opportunity to drive a prototype of an electric LandCruiser on a mine site a year or so ago. I imagine that if that mine takes up those vehicles, like almost all its vehicles, they would nearly never be on the road. We are trying to make sure that the same off-road benefit that exists currently would apply here as well. But, offering that clarification, essentially just provide your odometer reading and it will just be calculated on what your previous odometer reading was.

The Hon. S.C. MULLIGHAN: I appreciate the advice from the minister. I will be a little more specific. Under the new regime, once the levy comes in and forms part of the re-registration process, I will say, on the basis that the car has already been owned and it has incurred some kilometres that need to be declared, let's imagine that this is being done online. There will be a couple of fields, will there, where you will insert the kilometres presumably for either total or on-road and then off-road, which will not contribute to the calculation?

What work has been done to ensure that the EzyReg system is going to accommodate that information? How will it be verified and what are the storage arrangements? I do not mean the basic storage arrangements. What happens with the data so that year-on-year recollections of that information can be retained by the EzyReg system and the system can get some sort of understanding about kilometres travelled over the course of a number of years?

The Hon. D.C. VAN HOLST PELLEKAAN: Preliminary work has been done on that and some investigation into what would be required to adjust that system. The fact is that the system currently carries over rego numbers, and it currently carries over ownership details, such as addresses. It is not a challenge for the system for a motor vehicle owner to change his or her home address from one year to the next. I am sure it is well within the capacity of the system to keep an updated changing each year odometer reading as well.

The other part of the answer is that, while preliminary work has been done, it is not required to be implemented for four, five, six years, whenever the 30 per cent or the 2027 comes around. There is time to get that finalised and tailored to whatever other changes to the registration system might evolve totally separate of this over the next several years.

Also, a decision was made not to go too deeply down that burrow until we know whether this bill is actually going to pass both houses of parliament. I am sure that, as soon as that happens, if it happens, then that work will get a greater focus.

The Hon. S.C. MULLIGHAN: Who is the ICT provider that manages the EzyReg online portal, and have they confirmed to the government that they can incorporate this change?

The Hon. D.C. VAN HOLST PELLEKAAN: The system is internal to DIT, so the government owns it, operates it, maintains it, upgrades it.

Clause passed.

Clause 9.

The Hon. S.C. MULLIGHAN: On clause 9, the amendment of section 41, misuse of vehicles registered at reduced fees or without fees, can the minister advise the committee what the purpose of this clause is? Is this designed to require the accurate information of odometer readings or kilometres travelled, for example, on the basis that there is a suspicion that information has been inaccurately provided? What is the purpose of clause 9 here?

The Hon. D.C. VAN HOLST PELLEKAAN: The member would be aware that there are a few different options for registering motor vehicles in this state at the moment. If I think about sporting car clubs, for example, they can have short-term, temporary registrations, there are seasonal registrations and a range of other options which are different from the typical, standard 12-month registration that most households go through—whether they register and pay for three months or 12 months, it is an ongoing, every day of the year registration.

In the current legislation, there is the opportunity, if a person or a company registers a vehicle in one of those other, reduced-cost options—seasonally, limited-use, vintage cars, that sort of thing—and if it is determined that that registration was inappropriate, that the person used the vehicle outside the terms and conditions of that limited, cheaper registration, then there is the option for the government to charge back up to the registration fee that would have applied if that limited registration had not inappropriately been granted.

That said, all this clause 9 is about is trying to apply similar opportunity for a new road user charge for electric vehicles so that if a person claims inappropriately, deliberately or accidentally, and it is found that that was the case, then it is quite straightforward to just go back and say, 'Well, actually, you will be charged what you should have actually been charged, rather than the reduced rate.'

Clause passed.

Clauses 10 and 11 passed.

Schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (17:40): I move:

That this bill be now read a third time.

In closing, from my perspective, carrying this bill in this chamber on behalf of the Treasurer, but, as I mentioned, closely linked to the work that we do in Energy and Mining, I acknowledge that the Labor component of the opposition has expressed concerns about this and that at this point in time is not satisfied with where this proposal is at.

But let me close by saying that there is nothing that is not transparent about this legislation. There is nothing in it other than, essentially, introducing a road user charge to replace another charge upon road users, which will be faded out over time and I am sure we all hope relatively quickly. We have different views about how quickly that might be, but I sense the fact that everybody is comfortable with the desire for it to happen sooner rather than later for a wide range of reasons.

Lastly, very deliberately and very clearly from the government's perspective, we see the 30 per cent or 2027, whichever comes first, as an incentive and definitely not a disincentive. It is very clearly intended to be an incentive for people to take up electric vehicles sooner than they might otherwise do.

Dr CLOSE (Port Adelaide—Deputy Leader of the Opposition) (17:42): I will just speak briefly again to reiterate the deep concerns Labor has about this bill and the reasons for our opposition. They stem first, last and always from our desperate concern about the reality of climate change and the pressing need for us to do something about it.

While this Liberal government has not expressed the kinds of views that occur regularly in the Liberal Coalition government in Canberra, which are tantamount to suggesting that climate change either is not real or something that can be bargained with and does not need to be addressed for economic reasons as well as for environmental reasons, while I do not accuse this government of that, nonetheless there is a distinct lack of enthusiasm in this government for taking the tough decisions that are required to truly deal with the challenge we are facing, and one of those is to fully embrace electric vehicles.

I am pleased that they are putting in charging stations. I am pleased, although it happened belatedly and I think in the context of the community concern about this electric vehicle tax, that they have seen it might be a good idea to have an incentive to buy electric vehicles. However, I am not impressed, and in fact I am appalled by the idea, that this must be some sort of quid pro quo, where if this parliament does not do what the government wants—that is, allow it to put in place a 'ticking bomb' is probably too aggressive a term, but a tax that is a new tax that comes in in due course—then the very good policy of having an incentive to buy a cheaper electric vehicle will be taken off the table by this government.

That is not a policy from a party that really is concerned desperately about climate change. It is a policy that says, 'We can see this is happening. We think there will be a financial impost associated with loss of some of the fuel excise that occasionally comes South Australia's way via the feds, although not hypothecated, so we will manage that by bringing in a tax in due course to make sure that we get some income.'

The planet does not really care about any of that level of detail. The planet needs us to act quickly and the people of South Australia want us to act quickly. They want us to act unambiguously and this is a very ambiguous bill. They think that maybe we will get to 30 per cent of new car sales being electric vehicles, either hybrid plug-in or fully electric, by around 2027, but they are not confident enough to say, 'We will just allow this to kick in when there is 30 per cent.' It may be that there is only 5, 10 or 15 per cent by 2027, but nonetheless this disincentive tax will be coming in at that stage.

With the greatest respect to the minister, I do not see the logic that having a tax coming in in 2027 creates an incentive to buy an electric vehicle sooner. All it can do is put in people's mind that, although it looks like it will be cheaper to run now, you know a tax is coming. That does not help make a decision. The incentive in terms of the money may well do, but that could happen without this. The financial incentive is not in this bill. This bill is completely legally independent of that. That is a choice by this government.

I am disturbed by this legislation because it seems kind of half-hearted: yes, we will do something about electric vehicles, but we are more concerned about making sure that we have enough income for maintaining our roads. If we are really concerned about climate change, we will do something on electric vehicles unambiguously.

If we are really concerned separately on how we are financing our infrastructure, a necessary discussion should occur at the federal level about fuel excise. That ought to be happening in all the states with the federal government and in the context of making sure that, wherever the money is raised from, it is definitely spent on the kind of road and public transport infrastructure that we require. This is neither of those and therefore is opposed by the Labor side and I hope will be opposed in the Legislative Council outright.

The Hon. S.C. MULLIGHAN (Lee) (17:46): I will make some brief comments about the Motor Vehicles (Electric Vehicle Levy) Amendment Bill. As we have heard, there is no basis for the introduction of this new charge. This is not done as some part of genuine tax reform. Despite the way it is being sold by the minister and his colleague in the other place, the Treasurer, Rob Lucas, this is not some part of reform of federal-state financial relations. It is laughable to think that a state government is so concerned about the risk to commonwealth revenues from a gradual move away from fuel excise from a small proportion of motorists that it feels the need to step in and start levying a tax in place of a commonwealth tax. That is just laughable.

We have now had it confirmed from the minister that there is no agreement between the states to do this. There is no agreement at a COAG level. There is no agreement at a federal and state treasurers' level to do this. This is merely being done in an opportune way because the Treasurer here has decided to have another crack at motorists on top of the $100 million a year of additional taxes, fees and charges that he has already whacked on motorists in the last three years to try to raise some revenue.

As the deputy leader has said, this will do nothing to incentivise electric vehicle sales here in South Australia. The minister says, 'We would of course like to get to 100 per cent of electric vehicles here in South Australia.' If you would like to get to 100 per cent of electric vehicles in Australia, why do you not formally commit to it and have a policy about that that will actually get you there?

When this policy was first introduced, the minister himself told this house that the $80 million the state apparently spends on its own fleet would be reoriented towards electric vehicles. Nothing of the sort has happened—nothing of the sort. There is not even a directive to chief executives across the public sector to preference battery electric vehicles or plug-in hybrid electric vehicles. That has not even happened, so the government with its own purchasing power is not even leading by example. This is merely a cash grab by the government.

They are the one state government that is doing the least in the commonwealth when it comes to promoting the rollout of infrastructure and other supports for battery electric vehicles and everybody knows. Everybody knows about this government's dreadful record when it comes to supporting this industry. Everybody knows about this minister's record when it comes to talking the talk but failing to walk the walk in the pursuit of other renewable energy technologies here in South Australia, including hydrogen—for example, flogging off the land around Port Bonython that would suit for hydrogen facilities without it even being a formal requirement for a prospective purchaser to use that land for renewable energy or hydrogen purposes.

This government does not have the credentials. It cannot demonstrate the bona fides when it comes to renewable energy and, in fact, its only policy has been to pursue the private sector, building at consumers' direct expense a 1,000-kilometre cable to get rid of the excess renewable energy that we have here in South Australia, rather than secure it and use it for the benefit of the South Australian community.

When we do not have the capacity to use renewable electricity, we will not have base load power generated here in South Australia anymore because all the generators have announced from base load generation that they will be switching those off once the minister's big cable is delivered and will be importing certified, guaranteed, New South Wales coal-fired electricity here into South Australia.

So that is the minister's bona fides on renewable energy, and we see that sort of lump of coal advocacy that we get from the federal leader of the Liberal movement here in Australia infecting the minister's approach to renewable energy here in South Australia and, of course, it is infecting how he considers the electric vehicle industry to be supported. It is really regrettable, I have to say, that, as a relatively young although perhaps not so young MP, I still have to butt my head up against this sort of troglodyte approach to energy and motor vehicle fleet development here in South Australia.

But, as I say to my constituents, while there are some very progressive people of all ages, unfortunately, when it comes to politics, this just seems to be a generational thing. As soon as we can get that older troglodyte generation of conservatives out of power across the country, including here in South Australia, the better off the renewable energy industry and the electric vehicle industry will be.

Mr PICTON (Kaurna) (17:52): This piece of legislation is an utter disgrace. The idea that this government would seek to come in here and tax the users of electric vehicles for driving their cars is exactly the wrong thing to be doing as a parliament. We should be investing in electric vehicles. We should be having a target and an aim for increasing the number of electric vehicles, but what the government is seeking to do will deliver the exact opposite: it will provide a disincentive for people to have electric vehicles.

The arguments for putting this in place are completely false. The idea that this is somehow replacing state revenue is completely false. Petrol excise does not come to the South Australian government: it goes to the federal government. It is not hypothecated. We still collect a significant number of taxes. In fact, this government has increased the taxes on registering your car and on getting your driver's licence. All of those charges have been increased by this government and all of those are there whether you have a petrol car or an electric car for those ones that go to the state government.

This is nothing other than an absolutely transparent revenue-raising attempt to go after people who are investing in electric vehicles and who by and large are already paying more tax anyway because we have a ridiculous taxation arrangement in relation to the luxury car tax which is picking up many cars that are not luxury in regard to electric vehicles.

People are investing in this technology because they want to do the right thing by our climate. We know we have a climate crisis. We know we have a federal government that is completely failing to act in regard to that crisis, and now we have a state government that is putting us further behind in the adoption of new technologies. On this side of the house, we are very firm that we will oppose this policy. If it is, sadly, successful in this house we will continue to oppose it because this is the wrong thing to do and it is the wrong approach.

In my electorate there is fundamental support for people investing more in electric vehicles and increasing the number of electric vehicles in this state. I do not think people really want the Liberal Party poking around and checking their odometer every few months to work out how much tax they need to pay based on how far they have driven. This approach does not have the support of South Australians. It is not something that was taken to the last election. This government does not have the guts to take it to the next election.

The Hon. D.C. van Holst Pellekaan interjecting:

The SPEAKER: Member for Kaurna, there is a point of order.

The Hon. D.C. VAN HOLST PELLEKAAN: Not a point of order. As agreed with the Opposition Whip, if the member for Kaurna wants to continue, then I move we sit past six. If he would like to stop now, then I will not.

Mr Picton: I'm not sure that is a point of order.

The Hon. D.C. VAN HOLST PELLEKAAN: No; I said it is not a point of order.

The SPEAKER: Quite right, minister.

Mr PICTON: I will be one more minute.

The SPEAKER: I will allow it to be resolved on indulgence.

Mr PICTON: There are all sorts of theatrics happening. We have a situation here where the Liberal Party will be poking around in your odometer working out how far you have driven and working out the tax on that. If they were really committed to this policy, then they would hold this and put it to the next election. They would wait until then to get a mandate from the people to see whether or not people want this tax to be in place. I daresay that this does not have the support of the South Australian people. Whether or not they use electric vehicles at the moment, I think most people can see that this is likely to be part of our future and they do not want this continual taxation to be in place.

The Hon. D.C. VAN HOLST PELLEKAAN: Just in closing, we can disagree, as we have, on some things with regard to this charge. It is not new money. It is not a new charge. It is a replacement; it has been made very clear. The absolute rubbish from those opposite—except for the deputy leader, I have to say, who is actually their climate change and environment spokesperson—with regard to the environment is absolutely pathetic and ridiculous and shows once again their purely politically motivated reasons for speaking and their lack of understanding.

This calendar year we are in excess of 60 per cent renewable energy generation in South Australia. This government has reduced the cost of electricity by over $300. In stark contrast to those opposite, we have not had one blackout in South Australia due to insufficient electricity supply or grid instability. We are leading the nation, through the Minister for Environment and Water, with regard to Paris climate change reductions and emission reductions across the board. The targets that we have put forward are now being matched by other jurisdictions.

Those opposite, who say that this is some unfair sort of charge and that we should put it off, should talk to their Labor colleagues in Victoria who have started to implement the charge straightaway. We are saying we have six years' notice about this charge coming. Those people opposite, who care about the politics of this far more than I do, should look to Victoria. They are implementing it straightaway. They should talk to those people if they do not think that should happen.

What we are doing is saying six years' notice—2027 or when 30 per cent of electric vehicles are brought in. I would very happily rate the Marshall Liberal government's record on the environment against the former Labor government or against any other state around the place. Those opposite are there—

Mr Picton interjecting:

The SPEAKER: Minister, there is a point of order.

Mr PICTON: Point of order: it is very clear in the standing orders that the third reading debate has to be directly relevant to the legislation before us. The minister traversing all sorts of fantasies about the previous government does not seem to be relevant to the legislation.

The SPEAKER: Member for Kaurna, it is a robust debate. I am going to return to the minister.

The Hon. D.C. VAN HOLST PELLEKAAN: I would match our record against those opposite any day of the week and not only on reduction of emissions, reduction of costs and the reliability of our system. We have on the table $36 million of support for electric vehicle uptake, half of it on the table regardless, half of it connected to the passage of this bill. It is good for South Australians, good for Australia and good for the environment.

Bill read a third time and passed.


At 18:01 the house adjourned until Thursday 14 October 2021 at 11:00.

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