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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2021-09-21 Daily Xml
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Electric Vehicle Road User Charge

The Hon. J.A. DARLEY (15:12): I seek leave to make a brief explanation before asking the Treasurer, representing the Minister for Energy and Mining, questions concerning electric vehicles.

Leave granted.

The Hon. J.A. DARLEY: A bill has been introduced in the other place to establish a road user charge for electric vehicles, to commence from 1 July 2027 or when sales reach 30 per cent, at 2.5ยข per kilometre, CPI indexed, from 2022-23, with the charge being applied at the time of motor registration. I understand that following passage of this proposed legislation $18 million will be allocated, comprising a $3,000 subsidy for the first 6,000 electric vehicles purchased below a price cap. In respect of goals, modelling and anticipated outcomes, my questions to the minister are as follows:

1. Has the government undertaken modelling of the car market transitioning to electric vehicles, or is the government thinking that it will happen automatically as other key global markets convert to electric vehicles?

2. Does the government consider it necessary to ensure there is a clear price signal via incentives and disincentives to (a) encourage consideration of electric vehicle purchase and (b) encourage deferral of purchase of new petrol vehicles, allowing ageing and declining value of the petrol vehicles to safeguard against South Australians being caught with a large stock of relatively new petrol vehicles when Europe and other countries have transitioned to electric vehicles?

3. Has the government considered equity principles in the present arrangements, including (a) the wealthy being subsidised up-front and (b) those less able to afford transition to electric vehicles being hit with escalating costs of petrol vehicles over time?

4. Has the government considered (a) raising extra revenue or a disincentive on petrol vehicles to offset costs of providing incentives for electric vehicle take-up, such as an electric vehicle conversion levy on petrol vehicles equivalent to the $305 road user charge to be applied to the electric vehicle after 2027, with Centrelink concessions; (b) low-interest loans for those on low incomes to be able to purchase new low-end price electric vehicles; and (c) dual use of electric vehicles for battery storage for the home, with regulation of vehicle type and impacts factored on the grid to further encourage take-up?

The PRESIDENT: Before I call the Treasurer to respond, I advise the Hon. Mr Darley that some of those might have been better listed as questions on notice. I call the Treasurer.

The Hon. R.I. LUCAS (Treasurer) (15:15): I am happy to take most of those questions on notice and bring back a reply for the honourable member. He has made inquiries of my office in relation to some of those issues, and we are endeavouring to provide some responses. If I could offer a general comment firstly, the answer to the first series of questions is yes, the government does believe in a price signal in relation to trying to assist purchasers of electric vehicles. That is the reason for the $3,000 subsidy, and that is consistent with the policy of the Victorian government and in part consistent with the policy of the New South Wales government in terms of providing incentives.

In terms of penalty incentives, if I can put it that way, in relation to internal combustion engine vehicles, neither the government or either of the other governments has contemplated, to my knowledge, heading down that particular path. It has been more providing incentives to the purchasers of electric vehicles.

Secondly, in terms of the modelling, the government has basically looked at the modelling that has been provided both nationally and internationally in relation to the electric vehicle market. In summary, the advice to the government is that sooner rather than later we will see increased price competitiveness between electric vehicles and internal combustion engine vehicles. There are varying estimates. The earliest that we perceive there would be price competitiveness is around about 2025-26. The more pessimistic guesstimates are close to 2029-30.

That is, inevitably we are already seeing the price of electric vehicles declining relatively quickly, and sooner rather than later they will become price competitive with internal combustion engine vehicles and therefore there will be a big incentive for people to purchase an electric vehicle anyway, because the cost of operating it, even with a road user charge, will be significantly less than for an internal combustion engine vehicle. As I said, I am happy to take the detailed questions on notice and bring back a reply whenever I can.

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