Time to rid ourselves of car tariffs and the luxury car tax

May 01, 2019

Time is running out to rid ourselves of our anachronistic car tariffs and luxury car tax because Sanjeev Gupta – SA’s Elon Musk – will soon have them locked in for good with his EV manufacturing plan.

The Conservative Party has long-opposed car tariffs because there is no longer a domestic car industry to protect and the pointless "luxury" car tax sweeps agricultural producers, rural operators, tourism and a host of other undeserving victims into its dragnet.

The ‘luxury’ term is so arbitrary as to be a joke, applying most often in Australia to the popular work vehicle - the Toyota Landcruiser - as well as the Prado, Nissan Patrol, accessorised utes like the Ford Ranger and minivans.

Until now, cost has proven a barrier to EV take-up, with just a few thousand EVs among the 1.1 million new cars bought every year in Australia, which, unlike other countries has no incentives to boost demand and a pitifully inadequate charging network.

Mr Gupta said batteries were getting cheaper all the time and the company was looking for a strong policy platform rather than subsidies.

Therein lies the danger: That’s code for quotas and targets (for example an RET-like scheme for EVs, applied at the car retailers’ level), which are technically not subsidies but they similarly create false demand for inferior and/or unwanted products, artificially ensuring their survival.

The EV user will be shielded from the costs of rolling out the charging network and EV infrastructure required. Then there's the question of when an alternative to fuel excise will be developed and charged, for the extra wear and tear these heavier vehicles exact onto our roads - and that will hit all of us hard.

That's not even considering the fact that our current electricity grid is teetering on the verge of collapse and can’t handle too many EVs charging in the same street and needs expensive overhaul to cope with increasing penetration of intermittent renewables.

(ie power now flows in from all kinds of directions and rates, which overheat/pop lines and transformers installed for single-source/direction power flow). As such, another round of gold-plating for our transmission and distribution networks will be needed, and is being rolled out, “pop after pop”.

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