The Australian High Court has scrapped a road charge paid by electric vehicle (EV) owners in Victoria.
The charge required EV drivers to make payments based on the number of kilometres travelled on public roads.
It was aimed at ensuring the upkeep of the state’s roads, which other drivers contribute to through a petrol tax.
The court classified the charge as an excise and ruled it “invalid”. An excise is a type of tax that can only be imposed by the Federal Government.
The High Court
The High Court hears cases relating to existing laws under the Australian Constitution.
Two EV drivers from Melbourne filed the case in September 2021, two months after the road charge was introduced by the State Government.
They argued that the charge couldn’t be enforced because the Constitution does not permit state governments to implement excise taxes — a charge on goods like alcohol and petrol.
The Victorian Government has been ordered to pay the legal costs of the drivers who brought the case.
Chris Vanderstock, one of the plaintiffs, called the decision a “key moment” for all Australians. He said the charge was “poorly thought out” and “grossly unfair” to EV owners.
Victorian Treasurer Tim Pallas, who introduced the legislation in 2021, said the Government was surprised by the decision and would now consider the impacts of the ruling.
EV road charges in Australia
Every state and territory made submissions to the Court in support of Victoria’s road charge.
Increased EV popularity will impact government revenue from petrol cars. Road charges have been seen as a way of managing that shift.
An EV charge is due to come into effect in NSW by July 2027. NSW Treasurer Daniel Mookhey said his Government will consider the impacts of the High Court ruling, and speak with other states and territories about the matter.