Policy settings key to accelerating shift towards electric vehicles

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Editorial

Policy settings key to accelerating shift towards electric vehicles

In the past 20 years, changes in the design of diesel and petrol-driven cars have made them increasingly fuel efficient, cutting revenue from fuel excise by 30 per cent. With the Bureau of Infrastructure, Transport and Regional Economics now forecasting that 60 per cent of all new cars sold in Australia will be electric by 2046, the budgetary implications for Canberra are already looming large.

Yet in recent months it has been the Morrison government – despite its poor record on energy policy – that has sought to create incentives for people to buy electric vehicles, with a $74.5 million package in the budget to assist new technology for fleet cars and to install charging infrastructure at workplaces. To the dismay of environmentalists and innovators, it is the states – which led the way in setting net-zero emissions targets for 2050 – that are putting obstacles in the path of EVs.

The decisions of Victoria and South Australia to tax EV drivers per kilometre of road-use might seem at first glance to have the logic of revenue replacement in its favour. NSW Treasurer Dominic Perrottet, considering a similar move, says that it is necessary to ensure that "as fuel excise declines ... we have a fair and equitable system where people who use our roads pay for our roads".

But Mr Perrottet also acknowledges the argument put forward by his state colleagues – Transport Minister Andrew Constance and Environment Minister Matt Kean – that governments should be incentivising uptake of electric vehicles, not stifling it.

Incentives of the kind already on offer elsewhere (in the United States the federal government offers up to $US7500 in tax credits for the purchase of electric cars) have seen them pull ahead of Australia on EV sales, which still make up less than 1 per cent of our national market. That in turn has meant EV manufacturers sending their most affordable new models to markets where incentives are in place, leaving Australia as a dumping ground for old and polluting technology.

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It could be pointed out that even fuel excise revenue is not aimed directly at paying for roads, and a recent report by accounting giant Ernst & Young found EV drivers were paying more taxes than their combustion-engine counterparts. But this would be to miss the point that we are not simply shifting from one mode of transport to another – we are trying to change the paradigm by which we live.

Any cost-benefit analysis of EVs has to take in the health benefits of less air pollution, the savings from lower fuel imports and, above all, our progress towards decarbonising transport – a major component of any strategy to reduce emissions and fight climate change nationally and globally.

Dr Jake Whitehead of the University of Queensland, a lead author on transport for the United Nations' Intergovernmental Panel on Climate Change, has said that if Victoria and SA are to meet their net-zero targets, the nation's light vehicle fleet will need to be 90 per cent electric by 2050.

The Herald supports the Berejiklian government's attempt to balance the competing interests of replacing lost fuel excise with incentivising road users to transition to EVs over coming decades, just as it does the announcement on Wednesday about a move to make the state's entire bus fleet electric by 2030.

A scalable model that is holistic and sustainable will also green light technology that secures the future not only for our roads but the planet itself.

Note from the Editor

Herald editor, Lisa Davies, writes an exclusive newsletter for subscribers on the week's most important stories and issues. Sign up here to receive it every Friday.

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