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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
COAG REFORM FUND AMENDMENT (NO ELECTRIC
VEHICLE TAXES) BILL 2020
EXPLANATORY MEMORANDUM
(Circulated by the authority of Senator Rice)
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COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill
2020
GENERAL OUTLINE: Policy Rationale
The overriding purpose of this Bill is to prevent the States erecting road blocks to the
uptake of electric vehicles (EVs). Australia's transport emissions are around 20% of
our greenhouse pollution and EV technologies are going to be essential for Australia
to fulfil its commitments under the Paris Agreement.
This Bill seeks to neutralise the revenue effect of States and Territories that legislate
discriminatory taxes or charges against the purchase and use of electric vehicles. The
Bill will also financially reward States and Territories that don't place such road
blocks to electric vehicle uptake by redistributing the money withheld from non-
complying States and Territories.
This Bill will insert a statutory condition on grants of financial assistance to the States
and Territories from the COAG Reform Fund, that will provide that a jurisdiction
with a discriminatory charge against electric vehicles will either have their grants
reduced in the following financial year by the amount raised from such taxes and
charges in a given financial year or will be required to pay back to the
Commonwealth an amount of the grant equal to the amount raised from such taxes
and charges.
NOTES ON CLAUSES
Clause 1 - Short title
This clause provides for the Bill, when enacted, to be cited as the COAG Reform Fund
Amendment (No Electric Vehicle Taxes) Act 2020.
Clause 2 - Commencement
This clause provides for the whole of the Act to commence on the day after it receives
the Royal Assent.
Clause 3 - Schedule(s)
This clause provides that each Act specified in a Schedule to this Act is amended or
repealed as is set out in the applicable items in the Schedule. Any other item in a
Schedule to this Act has effect according to its terms.
Schedule 1 - Amendments
COAG Reform Fund Act 2008
Item 1
This item amends the simplified outline of the COAG Reform Fund Act 2008 in
section 3 of the Act, to include a reference to the proposed condition relating to not
taxing electric vehicles that is to be inserted as a new section 7A in the Act.
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Item 2
Item 2 inserts proposed subsection 7(2A) in the Act, to specify that grants of financial
assistance are subject to the conditions in proposed section 7A.
Item 3
Item 3 inserts proposed section 7A in the Act, establishing a new condition of grants,
that a State or Territory must not impose an electric vehicle tax after 1 July 2021.
Proposed subsection 7A(1) defines the new condition, while proposed subsections
7A(2) and (3) define an electric vehicle tax as a situation where a State or Territory
applies a tax, charge or levy at a higher rate to an electric vehicle than to other motor
vehicles.
Proposed subsection 7A(4) defines an electric vehicle as a motor vehicle that is
powered by one or more electric motors and does not rely on an internal combustion
engine as a source of power. The definition also requires that the vehicle is designed
solely or principally for use in transport on public roads, which is a requirement that
draws on the definition of road vehicle in section 6 of the Road Vehicle Standards Act
2018.
Proposed subsection 7A(5) specifies that where a State or Territory breaches a
condition by imposing an EV tax and collecting revenue from that tax, the Minister
must require repayment of an amount of the grant, or deduct an amount from future
grants to the State or Territory. Proposed subsection 7A(6) specifies that the amount is
equivalent to the revenue collected at a higher rate on EVs, relative to other vehicles.
Proposed subsection 7A(7) specifies that the Minister's determination is not a
legislative instrument.
Proposed subsections 7A(8) to (10) enable this framework to create debts where
States or Territories breach the electric vehicle tax condition in subsection 7A(1), and
enable debts to be repaid.
Proposed subsection 7A(11) enables the Minister to make a determination to
redistribute amounts repaid or deducted under subsection 7A(5) to other States and
Territories that have complied with the electric vehicle tax condition, on a per capita
basis. Proposed subsection 7A(12) specifies that the Minister's determination is not a
legislative instrument.
Fuel Indexation (Road Funding) Special Account Act 2015
Item 4
Item 4 amends the Fuel Indexation (Road Funding) Special Account Act 2015,
inserting a note referring to the conditions set out in proposed section 7A of the
COAG Reform Fund Act 2008 as inserted by item 3.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill:
This Bill seeks to neutralise the revenue effect of States and Territories that legislate
discriminatory taxes or charges against the purchase and use of electric vehicles. The
Bill will also financially reward States and Territories that don't place such barriers to
electric vehicle uptake by redistributing the money withheld from non-complying
states.
Human Rights Implications:
This Bill does not engage any of the applicable rights or freedoms.
Conclusion:
This Bill is compatible with human rights as it does not raise any human rights issues.
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