There’s a special kind of gobsmacking irony in the Australian government’s latest brain bubble: slapping a new tax on the very people who are actively trying to do the right thing. Federal MP Tanya Plibersek has called the idea of a new road tax for electric vehicle (EV) drivers “sensible” 1, a sentiment flagged earlier by Treasurer Jim Chalmers, who is apparently already working with states on the matter2.
Let’s call this what it is: a backwards, lazy, and breathtakingly hypocritical policy proposal that threatens to slam the brakes on Australia’s already sluggish transition to clean energy. It’s a textbook case of policy schizophrenia—one arm of the government dangles incentives for EV uptake while the other arm sharpens a stick to beat early adopters with. This isn’t just a bad idea; it’s a direct contradiction of our national commitments and a slap in the face to every Australian who has invested in a greener future.
A Green Target with a Tax-Coated Arrow
The federal government loves to talk a big game about its commitment to a net-zero future by 2050. It’s a target that requires a seismic shift in how we live, work, and, crucially, travel. Encouraging the uptake of electric vehicles is not just a nice-to-have; it’s a cornerstone of any credible emissions reduction strategy.
So, how does taxing EVs square with this ambition? It doesn’t. It’s like telling someone to run a marathon and then tripping them at the starting line. The EV market in Australia is still in its infancy. We are leagues behind other developed nations, and the primary barriers for many Aussies remain the high upfront cost and range anxiety. The logical, “sensible” government response would be to double down on incentives to make EVs more accessible and accelerate the transition.
Instead, the government is floating a punitive tax that will only add another financial barrier, sowing confusion and doubt in the minds of potential buyers. Why would anyone rush to buy an EV if they know the government is just waiting to hit them with a new tax the moment they drive it off the lot? This proposal actively discourages the very behaviour we need to be encouraging. It sends a clear message: in Australia, early adoption of green technology makes you a target for the tax office.
The Victorian Debacle: A High Court History Lesson
Perhaps the most infuriating part of this renewed federal push is that we’ve already seen this disaster play out. We don’t need a crystal ball; we just need to look at Victoria’s recent legal face-plant.
In a bold but ultimately doomed move, Victoria attempted to implement a 2-cent-per-kilometre charge on EV users back in 20233. The logic was the same then as it is now: make EV drivers “pay their fair share.” The move was met with fierce opposition, and for good reason. It was challenged, and the case went all the way to the High Court of Australia.
The result? A comprehensive smackdown. The High Court ruled that Victoria’s charge was unconstitutional. Why? Because it was, in effect, an excise—a tax on the consumption of goods. Under the Australian Constitution, the power to levy excise duties rests exclusively with the Commonwealth. Victoria had overstepped its authority.
This legal precedent makes the federal government’s current musings all the more cynical. They know the states can’t do it, so they’re positioning themselves as the only ones who can. It’s less about “sensible” policy and more about a power and revenue grab, conveniently ignoring the legal shemozzle and the clear message from the highest court in the land that such taxes are constitutionally fraught.
The Road Funding Red Herring
The central justification for this proposed EV tax is the inevitable decline in fuel excise revenue as we switch from petrol and diesel cars4. This revenue, we are told, is essential for funding the building and maintenance of our roads5. It sounds plausible until you look at the facts.
This argument is a deliberate conflation of two separate issues. The truth, as admitted in an amendment to the very article reporting on Plibersek’s comments, is that fuel excise is not directly allocated to roads6. It flows into the federal government’s consolidated revenue pool along with income tax, company tax, and every other federal impost7. It funds the entire federal budget, not just transport infrastructure.
Framing this as a simple case of “EV drivers must pay for roads” is fundamentally dishonest. The real issue is that the government is facing a long-term revenue problem and is looking for a politically easy target. Rather than having a mature, national conversation about broad-based tax reform to create a sustainable funding model for the 21st century, they’re choosing to penalise a small but growing group of environmentally conscious citizens. It’s a lazy cash grab, plain and simple, dressed up as responsible governance.
The Norway Model: A Road Map to Success
If the government genuinely wanted a “sensible” approach, it would look to countries that have successfully navigated this transition. The gold standard is Norway.
For years, Norway incentivised EV adoption with a raft of benefits: exemptions from purchase tax and VAT, reduced road tolls, free public parking, and access to bus lanes. The result? By 2023, electric cars accounted for over 80% of new car sales. They created a market, fostered public buy-in, and built a world-leading charging infrastructure. Only now, with EVs being the dominant vehicle on the road, are they gradually phasing out some of these incentives.
Australia is trying to introduce the stick before it has even properly offered the carrot. We are at a stage where we should be emulating Norway’s initial strategy—going all-in on incentives to reach critical mass. Instead, we’re proposing taxes that will ensure our EV uptake remains a rounding error compared to our global peers.
This isn’t about giving EV drivers a “free ride.” It’s about recognising that a temporary period of strong incentives is a strategic investment in our long-term national interest—for our climate, our health, and our energy security. To punish progress is to choose to fail. The government needs to scrap this idiotic tax proposal and get back in the business of building the future, not taxing it.