RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

Forums › Transport (cars, bikes and boats) › RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

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Uber Geek
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#3183731 18-Jan-2024 22:09

Whats good enough for Stralia?
(Anyone in Australia with better updated info welcome to correct any errors)

Fuel excise is a flat sales tax levied by the Australian Government on petrol and diesel bought at the bowser.
The current rate is 48.8 cents in excise for every litre of fuel purchased.

The rate of fuel excise is adjusted in February and August each year in line with inflation and is in addition to the GST.
( GT is 10% )
Over the past decade (up until 2022-23), only 59% of fuel excise has been re-invested in land transport projects

Road User charges are done on a state by state basis, as are registration charges ?

NSW is waiting till 2027 or if EVs reach 30% of vehicles.

Victoria has inacted.
https://electricvehiclehub.com.au/information-centre/ev-road-user-tax-and-charges-explained/#:~:text=Electric%20vehicles%20and%20hydrogen%20vehicles%20are%20charged%202.8,fair%20share%20to%20road%20maintenance%20and%20infrastructure%20funding.

Electric vehicles and hydrogen vehicles are charged 2.8 cents per km, while plug-in hybrids are charged 2.3 cents per k

Rebates too, especially for business buying EVs, EEVBLOG indicated

myfullflavour

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#3183736 18-Jan-2024 22:49

ezbee:
Victoria has inacted.
https://electricvehiclehub.com.au/information-centre/ev-road-user-tax-and-charges-explained/#:~:text=Electric%20vehicles%20and%20hydrogen%20vehicles%20are%20charged%202.8,fair%20share%20to%20road%20maintenance%20and%20infrastructure%20funding.

Electric vehicles and hydrogen vehicles are charged 2.8 cents per km, while plug-in hybrids are charged 2.3 cents per k

Rebates too, especially for business buying EVs, EEVBLOG indicated

Correct me if I'm wrong, but I believe someone took the Victorian govt to court and now they are being forced to refund all the EV road user charges paid?

HarmLessSolutions

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#3183738 18-Jan-2024 22:52

myfullflavour:
ezbee:

Victoria has inacted.
https://electricvehiclehub.com.au/information-centre/ev-road-user-tax-and-charges-explained/#:~:text=Electric%20vehicles%20and%20hydrogen%20vehicles%20are%20charged%202.8,fair%20share%20to%20road%20maintenance%20and%20infrastructure%20funding.

Electric vehicles and hydrogen vehicles are charged 2.8 cents per km, while plug-in hybrids are charged 2.3 cents per k

Rebates too, especially for business buying EVs, EEVBLOG indicated

Correct me if I'm wrong, but I believe someone took the Victorian govt to court and now they are being forced to refund all the EV road user charges paid?

Correct.

https://www.theguardian.com/environment/2023/nov/29/electric-vehicle-ev-tax-victoria-invalid-repaid

https://www.harmlesssolutions.co.nz/

RUKI

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#3183745 18-Jan-2024 23:57

Do people realise that petrol is not going to be cheaper even after all cars start paying RUC?
Point being: it is always a good time to re-evaluate and change the life style: e.g work from home, change the job closer to home or relocate closer to work, get bigger freezer and shop less frequently, change schedule to avoid burning gas in traffic. Or maybe even sell your second car. Track your spendings, evaluate them regularly. Learn to be frugal. Cut non-essentials. Sounds obvious, but I have seen too many people being "comfortable" of doing absolutely nothing with their lives and constantly complaining.
This note may give somebody a kick...in a good, positive way.

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mattwnz

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#3183750 19-Jan-2024 00:30

RUKI: Do people realise that petrol is not going to be cheaper even after all cars start paying RUC?

Theoretically it should be a 'tax switch'. But I can see the governments spin doctors essentially making it like a new tax, and then claiming that the existing tax on petrol was not sufficient to cover roading. So essentially we all end up paying more. The ones who are best off could be Hybrid owners, and is one reason I think my next car will be a hybrid instead of an EV, even though a EV is very tempting, but it doesn't make financial sense for my situation, and I can get the reliability of a Toyota.

wellygary

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#3183808 19-Jan-2024 09:01

myfullflavour:
ezbee:

Victoria has inacted.
https://electricvehiclehub.com.au/information-centre/ev-road-user-tax-and-charges-explained/#:~:text=Electric%20vehicles%20and%20hydrogen%20vehicles%20are%20charged%202.8,fair%20share%20to%20road%20maintenance%20and%20infrastructure%20funding.

Electric vehicles and hydrogen vehicles are charged 2.8 cents per km, while plug-in hybrids are charged 2.3 cents per k

Rebates too, especially for business buying EVs, EEVBLOG indicated

Correct me if I'm wrong, but I believe someone took the Victorian govt to court and now they are being forced to refund all the EV road user charges paid?

Yes, but only because the court found that the ability to tax consumption is a facet of the Federal Government not the state ones...

There would be no illegality for a national road user charge for EVs that was subsequently distributed to the states and territories (like excise on fuel and GST is done now)

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johno1234

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#3183815 19-Jan-2024 09:17

RUKI: Do people realise that petrol is not going to be cheaper even after all cars start paying RUC?

I believe the above is incorrect. If/when petrol cars start paying RUC the excise tax on petrol will be removed.

https://www.nzherald.co.nz/nz/election-2023-national-to-phase-out-fuel-excise-tax-and-make-evs-subject-to-road-user-charges/F54JNN5NHJCKXHN5YZ7ZOMCVA4/

SaltyNZ

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#3183818 19-Jan-2024 09:22

johno1234:

RUKI: Do people realise that petrol is not going to be cheaper even after all cars start paying RUC?

I believe the above is incorrect. If/when petrol cars start paying RUC the excise tax on petrol will be removed.

https://www.nzherald.co.nz/nz/election-2023-national-to-phase-out-fuel-excise-tax-and-make-evs-subject-to-road-user-charges/F54JNN5NHJCKXHN5YZ7ZOMCVA4/

I believe he's making a bet that if a 70c tax was removed from petrol you'd find that petrol wholesale costs entirely coincidentally went up by 70c at the exact same time. Long odds, I know; you can definitely trust the oil industry to do the right thing.

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johno1234

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#3183821 19-Jan-2024 09:34

Ha ha! Stranger things have happened.

HarmLessSolutions

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#3183824 19-Jan-2024 09:41

SaltyNZ:

I believe he's making a bet that if a 70c tax was removed from petrol you'd find that petrol wholesale costs entirely coincidentally went up by 70c at the exact same time. Long odds, I know; you can definitely trust the oil industry to do the right thing.

A reciprocal increase in petrol pump price by way of increased carbon (ETS) taxation would actually be the 'right' thing but the government rather than the oil industry would be responsible for it. If the introduction of RUCs for petrol vehicles is accompanied by a significant petrol price reduction it will essentially be a promotion of high consumption vehicles and have perverse repercussions in terms of emissions reductions so some form of disincentive for 'gas guzzlers' will be required and a carbon tax increase is best suited to effect this.

https://www.harmlesssolutions.co.nz/

tdgeek

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#3183829 19-Jan-2024 09:54

HarmLessSolutions:

SaltyNZ:

I believe he's making a bet that if a 70c tax was removed from petrol you'd find that petrol wholesale costs entirely coincidentally went up by 70c at the exact same time. Long odds, I know; you can definitely trust the oil industry to do the right thing.

A reciprocal increase in petrol pump price by way of increased carbon (ETS) taxation would actually be the 'right' thing but the government rather than the oil industry would be responsible for it. If the introduction of RUCs for petrol vehicles is accompanied by a significant petrol price reduction it will essentially be a promotion of high consumption vehicles and have perverse repercussions in terms of emissions reductions so some form of disincentive for 'gas guzzlers' will be required and a carbon tax increase is best suited to effect this.

If the excise per litre was replaced by RUC per km, theoretically one replaces the other. No change. In practice, some drivers will see a decrease in costs others an increase, but overall it just replaces A with B

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HarmLessSolutions

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#3183842 19-Jan-2024 10:05

tdgeek:

HarmLessSolutions:

A reciprocal increase in petrol pump price by way of increased carbon (ETS) taxation would actually be the 'right' thing but the government rather than the oil industry would be responsible for it. If the introduction of RUCs for petrol vehicles is accompanied by a significant petrol price reduction it will essentially be a promotion of high consumption vehicles and have perverse repercussions in terms of emissions reductions so some form of disincentive for 'gas guzzlers' will be required and a carbon tax increase is best suited to effect this.

If the excise per litre was replaced by RUC per km, theoretically one replaces the other. No change. In practice, some drivers will see a decrease in costs others an increase, but overall it just replaces A with B

No, your reasoning is faulty. Presently the RUC rate is equivalent to that paid by a petrol vehicle with ~9.5L/100km consumption. If the FET is removed and replaced by a fixed RUC (assume $76/1,000km) any vehicle that uses more than 9.5L/100km will become cheaper to run than it is presently. The higher the consumption, the bigger the saving. That is the perverse outcome I was referring to but unfortunately the attitude of the current government toward emissions reductions and their shortcomings in thinking through the RUC system's cause and effect scenarios (e.g. the PHEV present debacle) may well miss this negative aspect.

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ezbee

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#3183855 19-Jan-2024 10:39

There are probably a number of factors that mean that petrol tax/excise is not going away?
Above the Co2 portion.

1/ Petrol is a major expense for the country in foreign exchange since we don't have a North Sea.
Back when this all started and for much of the history, this was a major consideration.
We do rely on selling commodities and in the past, this has resulted in unstable income.
OPEC clearly wants prices to go up well beyond current levels.

2/ Pollution, and I'm not talking about Co2, harmful pollution the haze that some of our cities sit in.
So there is a logic to minimize use, for more livable cities, health etc. Push people to public transport.

In the end a pump is a very efficient method to collect tax, low to zero avoidance, pay as you go.
NZTA has apparently pointed out increased costs on having more normies on RUC.
Then issues on other side with collection, loss due to people who can't pay a bulk charge.
Cents in Dollar debt collection, expensive court action to get even less.

Especially if RUC is ringfenced 'only for roads' then the is a rationale to keep some point of use tax for the other reasons.

Then you get to Co2, and as we rely on export of commodities and most added value markets care about this.
At some point it's 'not' going to be 'our' decision, things may be forced on us.

tdgeek

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#3183862 19-Jan-2024 10:47

HarmLessSolutions:

tdgeek:

HarmLessSolutions:

A reciprocal increase in petrol pump price by way of increased carbon (ETS) taxation would actually be the 'right' thing but the government rather than the oil industry would be responsible for it. If the introduction of RUCs for petrol vehicles is accompanied by a significant petrol price reduction it will essentially be a promotion of high consumption vehicles and have perverse repercussions in terms of emissions reductions so some form of disincentive for 'gas guzzlers' will be required and a carbon tax increase is best suited to effect this.

If the excise per litre was replaced by RUC per km, theoretically one replaces the other. No change. In practice, some drivers will see a decrease in costs others an increase, but overall it just replaces A with B

No, your reasoning is faulty. Presently the RUC rate is equivalent to that paid by a petrol vehicle with ~9.5L/100km consumption. If the FET is removed and replaced by a fixed RUC (assume $76/1,000km) any vehicle that uses more than 9.5L/100km will become cheaper to run than it is presently. The higher the consumption, the bigger the saving. That is the perverse outcome I was referring to but unfortunately the attitude of the current government toward emissions reductions and their shortcomings in thinking through the RUC system's cause and effect scenarios (e.g. the PHEV present debacle) may well miss this negative aspect.

My reasoning isnt faulty, I stated that "In practice, some drivers will see a decrease in costs others an increase"

smac

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#3183864 19-Jan-2024 10:51

HarmLessSolutions:

The higher the consumption, the bigger the saving. That is the perverse outcome I was referring to but unfortunately the attitude of the current government toward emissions reductions and their shortcomings in thinking through the RUC system's cause and effect scenarios (e.g. the PHEV present debacle) may well miss this negative aspect.

That's a little disingenuous way of describing it (and you know it!). Yes the relative saving is bigger, but driving a less efficient vehicle still means it costs you more to run.

Rightly or wrongly NZ decided long ago that roading costs should be 'user pays'. The reality is a hybrid corolla should be paying roughly the same as a Falcon (or Ranger or whatever).

Any incentive scheme to move people to EV or otherwise more efficient vehicles is a completely separate issue, but that point has been muddied by the lovely world of politics. As said above, no scheme will ever be completely fair, but in the short term at least there's definitely winners and losers.

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