Victorian Ombudsman rips into the state government over ‘unreasonable, inflexible’ EV road use charges

- September 27, 2023 3 MIN READ
12 Apostles, Great Ocean Road, Victoria
The 12 Apostles, Great Ocean Road, Victoria. Photo: AdobeStock
As Victorian premier Daniel Andrews heads to the exit door this afternoon after nine years, one mess his successor will need to clean up is the government’s road-user charge for electric and hybrid vehicles, which has been branded unreasonable by state’s Ombudsman Deborah Glass.

The government introduced the Zero and Low Emission Vehicles (ZLEV) Act in 2021, as the nation’s first distance-based road charge for EVs and hybrid cars. The validity of the legislation is also currently being challenged in the High Court.

Glass said her report, an Investigation into the Department of Transport and Planning’s implementation of the zero and low emission vehicle charge, released today, outlined a range of failures in the government’s implementation of the, describing the Victorian Department of Transport and Planning as unreasonable and inflexible in dealing with issues such as double taxation of road users.

She compared the implementation to the federal government’s now notorious and lethal Robodebt scandal when it comes to using averaging calculations to charge people.

All up, the Victorian Ombudsman received more than 3o complaints about the application of the ZLEV Act, with two-thirds (67%) around unsatisfactory process or policy

The complaints centred around two key issues – whether the charges were unreasonably applied, considering how owners used their vehicles, and whether additional charges imposed after submitting a late odometer declaration were wrong.

The Department itself received more than 180 complaints and was criticised for poor and inflexible responses to the issues raised.

One driver of a plug-in electric hybrid reported travelling thousands of kilometres in remote parts of Australia using fuel, as there were no charging stations. Even though they paid fuel excise, the Department of Transport and Planning (DTP) refused to waive the additional hundreds of dollars payable under the ZLEV charge.

Reporting for EV drivers is onerous and when they fail to meet the demands of the Transport Department punitive.

Drivers must generally provide photographic evidence of kilometres travelled at the start and end of each registration period. A driver who was late in providing those photos because she was overseas had her registration cancelled by the DTP.

More than 240 registrations were cancelled among 19,200 EVs and hybrids registered in Victoria.

If an odometer declaration was overdue, the DTP estimated a charge based on the ‘average travel’ of Victorian vehicles. When the estimate exceeded the distance the car had travelled, the Department still applied it as a ‘penalty’ charge.

Unreasonable and inflexible

In five complaints made to the Ombudsman, the Department initially refused to amend invoices where the estimated exceeded the total distance a vehicle had travelled, describing it as a ‘penalty’ for lateness.

Ombudsman Deborah Glass said there is no provision in the ZLEV Act for the Department to impose a penalty charge.

“We found an unreasonable lack of policy guidance to those administering the legislation, inflexible handling of complaints, and an unwillingness to exercise discretion,” she said.

It is also wrong to charge penalties not provided for in legislation, and the money collected under this ‘penalty’ should be repaid.

The Ombudsman’s report does not look at the validity of the legislation – something the High Court will consider – or if it’s good public policy, but rather its poor implementation.

“As the Robodebt inquiry showed us, there are dangers in making assumptions and using average calculations to charge people,” Glass said.

“Assumptions have been made about how people will use their electric vehicles, which plainly disadvantage people with older vehicles or those who have less access to charging stations. And while this report focuses on the actions of the Department of Transport and Planning, there are broader lessons for the public sector about the dangers of making policy on the run (or not making it at all), and the importance of exercising discretion.”

Swinburne Professor of Future Urban Mobility Hussein Dia argues the charge is poor policy on several fronts and  the government should be removing barriers to EV adoption rather than throwing obstacles in the way.

“The Ombudsman’s findings already show deep cracks in the government’s poorly devised and hastily introduced policy” he said

“The key disadvantaged road users of this policy have been those using hybrid EVs. There have been many studies pointing that these hybrid vehicles tend to travel more on the petrol engine rather than batteries. This means that their owners are being slugged two taxes: The fuel excise tax (42 cents a litre) and the EV distance-based charge (2.3 cents per litre) even though the vehicle may not be running in EV mode at all.”

Prof Dia said that distance charge needs to be applied equally to all road users.

“The timing is right for distance-based charging to be introduced across Australia, but that should apply to all vehicles, be introduced only at a point in time when EV uptake has increased substantially and the charging infrastructure is more widely available, and be accompanied by removal of other road taxes,” he said.

“Otherwise, it would remain a regressive policy that targets drivers who want to do the right thing for the environment but end up facing these unnecessary charges.”

The Ombudsman’s report is here.