Target or not, here EVs come

15 March, 2024

RAA is calling on the Federal Government to tackle one of the biggest revenue problems in the country – replacing the fuel excise to ensure Australia’s road network can be funded into the future. 

As debate swirls about the Federal Government’s Fuel Efficiency Standards and the targets for Australia to transition to low emissions vehicles, RAA is renewing calls for governments and policy makers not to lose sight of the bigger picture.  

Chief Executive Officer Nick Reade said tax reform is required to ensure all motorists were paying their fair share to help fund our road network into the future.  

“With or without a target, the wave of EVs hitting our shores is bringing with it a significant revenue problem the Federal Government must address,” Mr Reade said.  

“A large portion of our infrastructure funding in Australia comes from the fuel excise, which is effectively 49.6-cent tax motorists pay per litre of petrol or diesel. 

“As more EVs hit our roads and the number of petrol and diesel vehicles decrease – we’re going to have a crack in the nation’s road funding model. 

“South Australia already has a $2 billion road maintenance backlog and, along with supporting new infrastructure projects, simply can’t afford any reduction in road funding. 

“We need more money spent on our roads, not less.

“Make no mistake, you’ll find no bigger advocate for EVs than RAA. We’re rolling out the RAA Charge network to solve range anxiety in SA, upskilling our patrols to service EVs and helping educate our approved repairer network about the opportunities EVs present, and to increase options for EV drivers.

“RAA is here to support our members, not matter what vehicle they choose to drive.” 

Mr Reade said Australia needs a bi-partisan approach to developing a sustainable funding model for the country’s roads – many of which are already in need of urgent repair.  

“There’s a lot of debate about the ‘target’ at the moment, but we’re all in agreement that EVs are coming,” Mr Reade said. 

“Whether it’s 2025, 2030, or even further into the future – eventually petrol and diesel vehicles will make up less and less of the cars on our roads – and at the moment, they’re the only ones paying to maintain them. 

“Some research predicts traditional petrol and diesel vehicle sales will fall to less than 25 per cent of all new cars sold in Australia by 2030 – the rest will be either hybrids or battery electric which will pay much less or no fuel excise at all.

“That means the $15 billion in revenue we generate from the fuel excise each year will plummet. 

“RAA is calling on the Federal Government convene a roundtable, along with industry, to form a bi-partisan approach that will be needed tackle one of the biggest revenue problems in the country.  

“It’s time our leaders got serious about progressing the conversation about road funding and how we’re going to ensure everyone will pay their fair share. 

“States can’t go it alone – Victoria tried, and their road user charge was found to be unconstitutional and thrown out by the High Court. 

“A bi-partisan national approach is a must – it’s the only way to ensure we have a sustainable and long-term funding model that will provide certainty to the people of Australia.  

“South Australia’s $2 billion road maintenance backlog has left thousands of kilometres of roads in need of urgent repair.  

“That impacts SA’s liveability, economic productivity and, most importantly, it can put lives at risk on our roads. 

“We need to act before it’s too late and our road network deteriorates into a state of complete disrepair. 

“Every vehicle that uses our roads should help pay for them.”