Electric vehicle (EV) drivers in Australia are facing a new road-user charge, one of 10 key tax changes proposed by the federal government during a three-day economic summit in Canberra.
The road user charge was one of the “10 key areas” of tax reform led by federal treasurer Jim Chalmers, with plans to introduce road user charges for vehicles not paying the national fuel excise.
The fuel excise is a significant source of government revenue and was increased to 51.8 cents per litre of petrol and diesel on August 4, 2025.
“There was a lot of support in the room for road user charging,”’ Mr Chalmers said after the summit.
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“There wasn’t a final model settled, but there was a lot of conceptual support for road user charging.
“There was more than the usual amount of consensus in a conceptual way around road user charging. A lot of reform appetite in that area, which is welcome.”
Mr Chalmers has previously raised the issue of a road user charge, having put forward the idea for advice to the national cabinet in 2023 as a replacement for the fuel excise, but no progress was made on the idea.
Earlier this month, the Treasurer said the government was “accelerating work” while members of the federal treasury attended a road-user charging forum in Sydney.
The federal government’s plans include a phased roll-out of a road user charge, with a long-term goal of replacing the fuel excise for all vehicles.
This comes as revenue raised from the fuel excise is expected to fall as the number of low- and zero-emission vehicles, including EVs, become more popular.
The road user charge plan is set for further discussion on September 5, with the Treasurer asking the states and territories for feedback.
“The states are putting together an options paper … to give you a sense of the considerations that people in the room were grappling with.”
There’s no state or territory in Australia currently issuing a road user charge, with Victoria’s previous system cancelled after the Australian High Court declared it invalid – deeming it an ‘excise’ not a ‘tax’, and therefore something a state can’t impose.
The federal government has already introduced a road-user charge, however, this is part of pilot program for heavy vehicles.
The National Heavy Vehicle Charging Pilot, of which Phase 3 was just completed, is designed to test different ways to charge heavy vehicles for their road usage based on their weight and the distance travelled instead of through registration or fuel excise.
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