Australia's High Court Nullifies Victoria's Electric Vehicle Tax: What It Means for Motorists

Jacob Brooke
October 18, 2023

The High Court of Australia has delivered a pivotal ruling, declaring Victoria's distance-based tax on electric and plug-in hybrid vehicles unconstitutional. This decision, one of the most significant constitutional verdicts in recent decades, has determined that only the Federal Government holds the authority to levy such a tax.

In the case of Vanderstock & Anor v State of Victoria, the High Court found the Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic) to be invalid under Section 90 of the Constitution. This section exclusively empowers the Commonwealth Parliament to "impose duties of customs and excise". The Court's ruling highlighted that the ZLEV charge is "a tax on goods" due to its close relation to the use of ZLEVs and its potential impact on the demand for these vehicles.

Victoria's road-user charge for Zero- and Low-Emissions Vehicles (ZLEV) was introduced on 1 July 2021. The state imposed a 2.8 cent charge per kilometre for electric or hydrogen vehicles and 2.3 cents for plug-in hybrids. This tax meant that plug-in hybrid owners in Victoria were doubly taxed: they paid both the Federal Government's fuel excise and the state's road-user tax.

The High Court's judgement emphasized the exclusivity of the Commonwealth Parliament's power to impose duties of excise. This ensures that uniform laws of trade or commerce or taxation, which the Commonwealth Parliament enacts or might choose to enact, cannot be distorted by State or Territory taxes on ZLEVs or other goods.

The Commonwealth Attorney-General and the Australian Trucking Association supported the plaintiffs, Christopher Vanderstock and Kathleen Davies, who both own ZLEVs. In contrast, the Attorneys-General of every other Australian state, as well as those of the Australian Capital Territory and the Northern Territory, backed Victoria.

Behyad Jafari, CEO of the Electric Vehicle Council, reiterated the importance of a national approach to road user charges. He emphasized that such charges should not deter the adoption of electric vehicles and called for collaboration with the federal government on sensible road funding reform.

Victoria's approach to electric vehicle taxation has faced criticism from various stakeholders, including car manufacturers, industry groups, and the Victorian Ombudsman, Deborah Glass. The Ombudsman's report highlighted issues with the implementation of the charge, including an unreasonable lack of policy guidance and inflexible handling of complaints.

Looking for car finance?

Get pre-approved car loan offers from over 30 Aussie lenders in minutes.

Jacob Brooke
Jacob Brooke, a respected voice in the world of automotive journalism, brings a wealth of knowledge and insights to his reviews at CarSauce. His keen eye for detail and passion for all things cars shine through in his in-depth analysis and honest evaluations of the latest models of cars. Join him as he guides readers through the car-buying process and explores the exciting world of motoring.

Other car news

Suzuki Confirms 2024 Swift for Australia: Get the Full Scoop Here!

2024 Suzuki Swift confirmed for Australia, most likely with a 1.2L engine, enhanced tech, and fresh design.
Matt Brand
December 7, 2023

2024 Suzuki Jimny XL (5-Door) Price and Specs

Suzuki Australia launches Jimny XL, blending iconic 4x4 performance with new 5-door, extended wheelbase and colors. Starting at $34,990.
Jacob Brooke
December 5, 2023

Suzuki Australia Reintroduces Jimny 3 Door Auto Amid Increased Production

Suzuki Australia resumes orders for Jimny 3 Door Auto immediately, following increased 2024 production, alongside launching Jimny XL.
Matt Brand
December 5, 2023

Sign up to our newsletter

Be the first to know when we drop new car reviews.

By clicking Sign Up you're confirming that you agree with our Terms and Conditions.
Thank you! Welcome to the Car Sauce community!
Oops! Something went wrong while submitting the form.