South Australian Government repeals electric vehicle tax plans

UPDATE: South Australia's Parliament has passed a law to rescind the State's planned electric vehicle tax due to come into effect in 2027.

The South Australian Government’s Motor Vehicles (Electric Vehicle Levy) Amendment Repeal bill was passed this week, scrapping the former Government’s EV Tax.

The bill’s passage comes as research from the Australia Institute shows that interest in purchasing an EV has increased significantly among South Australians.

“The decision to repeal the tax has come at a key moment for electric vehicles in South Australia, as their popularity is increasing across the state and the political spectrum," said Noah Schultz-Byard, SA Director at The Australia Institute.

“A little over a year ago, just one in 10 South Australians said their next car was definitely going to be an EV. Now, one in four motorists say they will avoid petrol power altogether and opt for an EV when they’re next shopping for a car."

Our earlier story continues below unchanged.

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The story to here

May 2022: The new South Australian Government is seeking to repeal legislation passed last year which will introduce a controversial electric vehicle tax in the state from 2027.

The tax involves electric vehicle owners being charged 2.5 cents per kilometre from July 1, 2027, or when EV uptake hits 30 per cent – with plug-in hybrid vehicles due to pay 2c/km.

The legislation was first introduced by the local Liberal Party in 2021 when it was in power. However, in March this year, new Premier Peter Malinauskas led the Labor Party to victory in the South Australian state election, with the repealing of the EV tax listed as one of the Party's top priorities once it came to power.

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Last week the Motor Vehicles (Electric Vehicle Levy) Amendment Repeal Bill 2022 was introduced to the South Australian Parliament and, if passed, will result in the road user charge's implementation being scrapped.

"We want more South Australians making more environmentally friendly choices, not putting in barriers that dissuade them," said Minister for Transport and Infrastructure, Tom Koutsantonis.

"The feedback we received from the community was overwhelming, the Liberals’ decision to introduce this tax would have reduced community uptake.

"We are calling on Opposition Leader David Speirs and the Liberals to admit they made the wrong call by putting this tax in place and back this [change to the] legislation."

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The South Australian Government is now the first State Government to attempt to repeal a proposed road user charge, going against the grain of its Labor-led counterparts in Victoria and Western Australia.

While Victoria implemented its widely-criticised tax from July 1, 2021, Western Australia will be doing so from July 2027 – as will New South Wales, although the latter could introduce it before the proposed date if uptake surpasses 30 per cent.

A recent study by the The Australia Institute showed 70 per cent of potential EV buyers in South Australia were put off purchasing a vehicle which would be subject to the tax, while the same number of people also supported the Government reducing the cost of EVs through subsidies and incentives.

Roughly 40 per cent of South Australians have considered an EV as their next vehicle, and that number may continue to rise after the Australian Labor Party won the Federal Election over the weekend, having promised a number of motoring-related policies to reduce the up-front and ongoing price of EVs.

South Australia introduced a $3000 subsidy to buyers purchasing an EV worth up to $68,750 last year, although this was only limited to the first 7000 applicants. Its current incentives continue to include three-years' free registration and up to $2000 to install EV smart chargers at home (limited to 7500 households).