The nation’s smallest jurisdiction, the ACT, will embark on one of Australia’s biggest changes to road user charges, unveiling plans to overhaul car registration on electric vehicles and push up fees on fossil fuel-powered cars.
ACT Chief Minister Andrew Barr on Wednesday will release the territory’s long-term plan for zero-emission vehicles that will include ditching the current system of requiring owners to pay registration based on the weight of their cars.
Car registrations in the ACT would move from weight to emission levels under a plan to be unveiled on Wednesday.Credit:Shutterstock
The territory is also looking at ways to introduce road user charges that would reward those who ditched their car and penalise those who racked up kilometres.
Many states are looking to change the way vehicle fees and taxes are collected as EVs gradually replace petrol or diesel-powered cars. Such fees, including the federal government’s fuel excise, raise billions of dollars every year that cover road infrastructure and general services.
But the advent of EVs is threatening that revenue stream. Major car builders such as Volvo, Ford, General Motors and Honda have all announced plans to phase out the manufacture of internal combustion passenger models over the next 15 years.
The ACT already offers EV drivers free registration until mid-2024. Once that ends, EV drivers will start to pay a discounted registration fee while fees for internal combustion vehicles will rise.
Instead of weight determining the registration fee, the emissions level of the vehicle would be used. EVs, because of their batteries, often weigh more than traditional vehicles.
Barr said all governments were looking at ways to encourage the take-up of low-emission cars while covering the loss of revenue that would flow from the demise of internal combustion vehicles.
He said replacing the weight-based approach to car registration with one that encouraged people to take up low-emission vehicles was a balancing act.
“You want both the carrot and the stick,” he said. “We’ve got four or five different weight band brackets at the moment for registration fees. Instead, we’ll have four or five different emission levels.”
ACT Chief Minister Andrew Barr says a mixture of carrots and sticks is needed to encourage the uptake of EVs while covering lost revenue from falling sales of fossil fuels.Credit:Alex Ellinghausen
Barr said longer term, a road user charge would be introduced. EVs that were driven less than 10,000 kilometres a year would face a modest fee compared to diesel or petrol-powered cars driven long distances.
He said there would be protections put in place to prevent people in the territory’s outer suburbs from being financially penalised.
“It’s an issue for every government. We need a revenue stream but we also want to drive the uptake of EVs. And you’ve got car makers getting out of internal combustion vehicles altogether,” he said.
The registration and road user charge policies are unlikely to be fully in place for several years.
The moves form part of the ACT’s overall EV strategy, which includes phasing out new fossil fuel-powered vehicles from 2035, expanding the territory’s public charge network and incentives for the use of electric bikes, motorbikes and trikes.
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