Road user charge for EVs put on hold, more money for regional and kerbside charging

Australia’s federal government has delayed the introduction of a road-user charge for electric vehicle (EV) drivers, opting instead to focus on other measures to support the uptake of low-emission vehicles. While the proposed charge has been put on hold pending further policy development with state and territory governments, the federal budget includes several initiatives aimed at accelerating EV adoption. These include an extension of the electric car repair scheme, increased funding for Australia Post’s electric delivery fleet, and investment in regional and kerbside charging infrastructure. The budget confirms changes to the electric car discount scheme, which will see the full fringe benefits tax (FBT) exemption apply only to electric vehicles costing $75,000 or less from April 2027, with a 25 per cent FBT discount for all EVs under the luxury car tax threshold starting in April 2029. The government anticipates that making the discount a permanent feature will encourage more Australians to switch to electric vehicles while maintaining fiscal responsibility. Treasurer Jim Chalmers emphasised the importance of sustainable, long-term policies to support EV uptake without causing budget blowouts. Electric vehicle sales in Australia have surged recently, driven in part by rising petrol prices and shortages, with 330,000 EVs purchased under the discount scheme in its first three years. Of these, 78,000 were low-emission vehicles that might otherwise not have been bought, highlighting the scheme’s impact on consumer behaviour. Despite this progress, the government remains cautious about introducing road-user charges, mindful of the legal challenges faced by similar schemes, such as Victoria’s charge being struck down by the High Court in 2023. Additional budget commitments include a $40.5 million boost to electrify Australia Post’s delivery fleet and $40 million allocated for expanding EV charging infrastructure in regional areas and for kerbside charging solutions. The extension of support for dealerships and repairers servicing electric vehicles aims to strengthen the supply chain and maintenance network, ensuring that the growing EV market is supported by adequate service capacity. These measures collectively signal a strategic approach to fostering EV adoption while addressing infrastructure and operational needs across the country.