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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-11-01 Daily Xml
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Bills

Motor Vehicles (Electric Vehicle Levy) Amendment Repeal Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (15:49): I close the debate with my remarks and thank all members for their contributions. This was a key election commitment of the then Malinauskas Labor opposition at the most recent March election.

It is fair to say that the South Australian public want to see the South Australian government incentivising the take-up of electric vehicles, not disincentivising the take-up of electric vehicles. There has been a lot of debate, a lot of controversy over this tax. The previous government said that they would be a low-taxing government when, in fact, the reality was they increased taxes dramatically over their time in office, including land tax, and then introduced a brand-new tax on motor vehicles.

I can proudly inform the house that with the passage of this legislation, the final nail in the coffin of the tax-and-spend Liberal agenda of the last four years is over. To be fair, the opposition have asked a series of questions that they want answered, which I think is a good and collaborative way to go about this debate. The first question is obviously with regard to the Motor Vehicles (Electric Vehicle Levy) Amendment Act, the intention to obtain financial contributions for the maintenance of roads from electric vehicle users: how does the government intend to substitute the road maintenance?

I point out to the house that the motor vehicle owners, including electric vehicle owners, already contribute to the maintenance of roads through annual motor vehicle registration charges under the Motor Vehicles Act 1959. Under the Highways Act 1926, money collected from registration fees is paid into the Highways Fund and, among other things, contribute to the maintenance of roads. This continues following the passage of the Motor Vehicle (Electric Vehicle Levy) Amendment Bill 2021.

The current annual registration charge for an electric vehicle is $141 for 12 months' registration. This is the same charge applied to four-cylinder internal combustion engine vehicles. When the Motor Vehicle (Electric Vehicle Levy) Amendment Act was introduced there was no revenue budgeted to be across the forward estimates from the charge of electric vehicles under this act. This reflected the delayed commencement of the charge being the earlier of 1 July 2027, or when the sale of battery electric vehicles reaches 30 per cent of new motor vehicle sales in South Australia. This assumes that the majority of electric vehicles on the road will not be hydrogen fuel cell but will be battery.

I think it is fair to say that the government's point of view on this is that this is largely a commonwealth issue to address. Having states come up with their own levy to charge on electric vehicles could see a variety of poor outcomes on behalf of South Australians. We do not want to see a bidding war between states where one electric vehicle charge is lower than the other per rated kilometre.

That is why the national fuel excise is a national tax that is charged nationally across all jurisdictions. When states enter these fields, like with payroll tax, you have a discrepancy across jurisdictions which quite frankly gives you very different outcomes that affect the efficiency of taxation and affect the outcome of horizontal fiscal equalisation in terms of either GST payments or other payments from the commonwealth government.

Our view is that, despite this tax not raising any money any time soon, it is a disincentive on the uptake of electric vehicles and assumes that electric vehicles will be the winner out of this race. I have to say that coming back from Japan, meeting with most successful carmaker in the world, in the Asia-Pacific, Toyota, their view is that battery vehicles will not win this race. Their view is it will be hydrogen fuel cell vehicles. They are also electric vehicles. You could impose a commonwealth excise on the hydrogen rather than on the kilometres travelled. This is basically a toll.

The other question is: what is the government's plan to recover this revenue shortfall from the reductions in the fuel excise? Again, there was no money budgeted over the forward estimates. We are talking forward estimates, sure, but let's be frank about this: this also assumes a level of uptake. Until fuel standards are improved nationally, South Australia and Australia will not receive the electric vehicles that we hope to receive from the rest of the world.

Fuel standards are what drive the uptake of electric vehicles. Fuel standards are driving the uptake of electric vehicles and hybrid vehicles in the Asia-Pacific, in Europe and North America. My advice is we have the worst fuel standards of the OECD, which means that we are getting the dregs of the motor vehicles the manufacturers are producing. We are not getting the electric vehicles that we hoped to.

Again, this tax was designed by the previous government not to raise any money anytime soon. The shortfall, quite frankly, is a difficult question to answer and, again, it depends on the uptake. I am not trying to be difficult about this. I do not think the government can budget for a shortfall in revenue on the basis of a tax that would not collect any money. The other question is: how will the government substitute the investment to government-funded EV charging infrastructure that this levy would otherwise have financed?

This is an important question. With the uptake of the internal combustion engines over the last century, governments did not incentivise the uptake of fuel stations. We did not pay for the infrastructure for BP, Shell, AMPOL and the other companies to roll out the infrastructure: these were market-driven designs. Another thing I would point out, one of the reasons we got rid of the smart-charging scheme that the previous government had, which was a subsidy for the most wealthy in this state, is that we cannot allow motor vehicle dealerships to sell electric vehicles without the appropriate charging infrastructure.

Basically, in South Australia now you have to pay an extra fee as part of purchasing an electric vehicle to get smart-charging infrastructure. SAPM will offer a discounted tariff and will incentivise that, but when you pick up your brand-new electric vehicle from any dealer in Australia they will hand you the emergency backup, what you would call a jerry can of petrol, which is basically the backup cord you use in an emergency and which becomes the mainstay of charging. That is not the appropriate way for us to have a rollout of electric vehicles.

We need to change the conversation here. If you are buying electric vehicles, you should also be purchasing, as part of that vehicle, smart-charging equipment and infrastructure from the dealership—it should come together. The idea that we would somehow have the taxpayer pick that up I think is unfair.

But, credit to the previous government, they did roll out $12 million for charging infrastructure. They went through a process and gave that money to the RAA. I do not know if the RAA are commercialising this model. It was done just before caretaker. We are having a look at this procurement. The aspiration of the program was to roll out charging infrastructure across South Australia in public places, in the public realm, which makes a bit of sense.

Ultimately, I do not know what the financial model will be for electric charging because currently a lot of people are expecting it to be free and, ultimately, that will change. We have been conditioned in this country that every time we go home we charge our mobile phones and we charge our electronic equipment that can be used by battery. That is not what we need with motor vehicles. Remember, a lot of the motor vehicles being built today have ranges of between 600 and 700 kilometres on battery charge when the average South Australian is doing 20 to 30 kilometres per day.

We do not want everyone going home all at once and charging their batteries; we want smart systems in place where cars know when to charge, when the grid needs it being charged so they can be sponges to the grid rather than drains on the grid. With those few words, as we head into the Auditor-General's examinations, I thank members, I thank the opposition for not wanting to go to committee on this bill, and I commend the bill to the house.

Bill read a second time.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (15:59): I move:

That this bill be now read third time.

Bill read a third time and passed.

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