The High Court of Australia ruled against the Victorian Government’s electric vehicle tax under section 7(1) of the Zero and Low Emission Vehicle Distance-based Charge Act 2021 (“the ZLEV Charge Act”) Wednesday, which required registered operators of zero or low emission vehicles to “pay a charge for use of the ZLEV on specified roads.”
The lawsuit was initiated by two Victorian drivers, Chris Vanderstock and Kathleen Davies, shortly after the ZLEV Charge Act was passed in 2021 on the basis that s 7(1) of the ZLEV Charge Act imposes a duty of excise within the meaning of section 90 of Australia’s Constitution and is thereby constitutionally invalid.
The High Court in sustaining the plaintiff’s submissions reopened and overruled its own precedent set out within Dickenson’s Arcade Pty Ltd v. Tasmania. In that case, the majority held a tax on the consumption of goods did not constitute a duty of excise. This was criticized by Justices Michelle Gordon, James Edelman and Simon Steward within their dissenting judgment, who described the present ruling as “a departure from long established and fundamental principle and authority” and “an abandonment of past authority.”
Tim Pallas, Victorian Treasurer, described the ZLEV Charge as “a fair charge. It was a charge that meant that everybody paid their share of their cost to the road network.” However, Davies expressed “it was just a cash grab. It made no sense and there was no argument in my mind that it was wrong and it was unfair.”
The ZLEV charge taxed users annually at a prescribed rate for each kilometre travelled during a financial year. For the 2021-2022 financial year, for a ZLEV that is an electric or hydrogen vehicle the prescribed rate was 2.5 cents, with plug-in hybrid electric vehicles being prescribed 2 cents. Non-plug-in Hybrid vehicles were exempt. Motor vehicle owners were required to submit photographs of their odometer to the Victorian State Government each year. Failure to do so would result in a default distance charge (13,500km), or a cancellation or suspension of their vehicle registration.
Victorian Greens Upper House Member for Parliament, Katherine Copsey referred to the decision as “a win for climate and green transport.”
The ZLEV Charge generated $3.9million Australian dollars in the previous financial year.
