The Electric Vehicles (Revenue Arrangements) Bill 2021 seeks to legislate key aspects of the New South Wales Government's $490 million Electric Vehicle Strategy. I am pleased to lead on this bill for the NSW Labor Opposition and to confirm that we will support the bill; however, we will move an amendment in the Legislative Council to bring forward the statutory review to a period of two years. I will provide further details on that later. The bill enables the introduction of a road user charge for electric vehicles in New South Wales, payable by owners of certain zero- or low-emission vehicles, based on each kilometre that the vehicle travels in a public place, whether inside or outside New South Wales.
The rate will be set by Transport for NSW each year, with battery and hydrogen fuel cell electric vehicles indexed at the full rate and plug-in hybrid vehicles indexed at 80 per cent of the full rate. Drivers will be required to report an odometer reading to Transport for NSW, or to provide an estimate in a way that Transport for NSW considers reasonable. Drivers will be able to pay before or after kilometres have been travelled. If paid before, drivers must pay in 1,000-kilometre increments and it will be an offence to drive additional kilometres above what has been paid for. If the post-paid option is used, drivers must notify Transport for NSW that this option has been chosen. Furthermore, the bill sets out a series of penalties and offences for failing to properly report a road user charge.
The bill also exempts certain zero- and low-emission vehicles from the payment of stamp duty under the Duties Act 1997. While the bill is imperfect and does not represent the approach that Labor would pursue in government, we support the bill as an important measure to expand the infrastructure for and availability of electric vehicles in New South Wales. Labor supports the uptake of electric vehicles in this State. Australia currently has one of the lowest rates of electric car ownership in the world. In 2020 our global electric vehicle market share equalled only 0.78 per cent; amongst the lowest in the world. In comparison recent data suggests that in August close to a quarter of cars sold in Europe were fully electric vehicles or plug-in hybrids, the first time ever that more electric vehicles [EVs] were sold than diesel cars.
Surveys consistently show that around 50 per cent of Australians would consider buying an electric vehicle; however, that interest is not translating into EV sales. It is worth considering why that is the case. The first issue is supply. The range of models available to consumers in Australia pales in comparison to other jurisdictions. The Electric Vehicle Council reports that there are 32 passenger electric vehicle models from 12 different car makers currently available for purchase in Australia, with sticker prices ranging from $40,990 to almost $850,000. An additional 27 models are due to come on line before the end of 2022. So why are car makers skipping the Australian market when it comes to rolling out electric vehicle models? It is simply too expensive. In other markets, including Europe, governments are providing incentives in the form of carbon credits while at the same time penalising the sale of combustion–engine vehicles. One expert from The University of Queensland put the value of credits of each EV sold in the European Union at around $26,000 per vehicle. In Australia they get nothing. Electric Vehicle Council CEO Behyad Jafari pointed out:
Eighty per cent of the new vehicle sales market around the world has … CO2 standards, and Australia doesn't
He cites this as one of the reasons Australia does not get a broader variety of electric vehicles and is instead fast becoming a dumping ground for polluting vehicles that manufacturers cannot sell anywhere else. This brings us to our second problem—consumer choice. The lack of models means that those available in Australia tend to be more expensive—like Teslas—and are therefore out of reach of most families and households. Consumers like to be able to choose between car models and the relative lack of choice acts as a deterrent.
In Australia around 50 per cent of all new car sales are sports utility vehicles [SUVs] and 25 per cent are dual-cab utilities, but electric vehicle options in these makes are non-existent at this point. That is a shame because the purchasers of these kinds of vehicles might just be the drivers that could make the biggest dent in emissions if they were able to choose electric options. People who use their vehicle for work can have the biggest impact if we remove their use from the emissions equation. The benefit for tradies in particular is immense, given the potential to be able to power tools from their vehicle. It is clear that we need to address the lack of availability and variety of electric vehicles if we are to increase their uptake.
The third issue is range anxiety and that has also curtailed the uptake of EVs in Australia. Range anxiety is simply the fear that a driver will run out of battery power before reaching a destination that allows them to recharge. Part of the issue with range anxiety is that drivers do not necessarily understand how to use their vehicle. A recent study by Griffith University showed that despite many EV owners citing range anxiety before they purchased an EV, it dissipated once the vehicle was purchased. One of the reasons was that most weekend travel did not exceed 70 kilometres and up to half of owners travelled no more than 50 kilometres. The Electric Vehicle Council reports that newer EV models have a range upwards of 550 kilometres from a single charge, and that the average Australian drives around 38 kilometres per day, which means that an EV owner can go for an average of 10 days without having to charge their vehicle.
Another reason for range anxiety is the scarcity of charging infrastructure. In July 2021 there were 783 charging points in New South Wales, including 153 direct current [DC] chargers and 630 alternating current [AC] chargers, most located in Sydney. That equates to roughly 0.17 charging stations per EV. While the Electric Vehicle Council reports that 80 per cent of current EV owners charge their vehicle at home, it is clear we need a rapid and serious investment in public EV charging infrastructure if we are to overcome range anxiety and realise our potential for an EV future. What does an electric vehicle future look like and what are the risks of not acting now to realise it?
Electric vehicles are critical to meeting our future emissions targets. The Grattan Institute reports that nearly 20 per cent of Australia's total emissions come from the transport sector, with over 60 per cent attributable to light vehicles. It argues the best way to cut transport emissions is to supercharge the transition to electric cars. To reach net zero emissions by 2050, which is the New South Wales Government's target, ClimateWorks modelling shows that between 50 per cent and 76 per cent of new car sales in Australia need to be electric by 2030. In fact there is a real question as to whether the Government's strategy goes far enough. It claims to allow for 52 per cent of new car sales in 2030-31 to be electric; just barely inside the range suggested by ClimateWorks modelling. The Climate Council goes further, arguing we need 75 per cent of new car sales to be electric to achieve the more ambitious target of net zero emissions by 2035. No matter which way we cut it, and remembering that the current proportion of EV new car sales is less than 1 per cent, there is a lot of work to do.
Other countries are turning to bolder measures. The United Kingdom has banned combustion engine vehicles by 2030 and hybrid vehicles by 2035. The European Union will ban all new combustion engines by 2035 and Japan is considering doing the same. As these markets move to phase out combustion engines, particularly right-hand markets like the United Kingdom and Japan, it is likely that more polluting and comparatively expensive vehicles will end up in Australia. I say "expensive" because the overall cost of running an electric vehicle is far less than a traditional combustion vehicle.
It is estimated that an average Australian driving 15,000 kilometres a year spends $2,160 on petrol per year, or 14c a kilometre; an electric vehicle owner travelling the same would spend roughly $600 per year, or 4c a kilometre unless recharging off solar panels, in which case the cost would be zero. Maintenance costs are also far less than in a traditional internal combustion engine. Electric vehicles have far less complicated engineering and require less servicing. So, at a point when the cost of electric vehicles is comparable to—or lower than—the cost of an internal combustion engine, the overall total cost of ownership of an electric vehicle will be far less, particularly as the cost of petrol continues to rise.
At this stage, the benefits of owning a vehicle with lower running costs are available to only those who can afford to lay down the capital cost of an expensive vehicle. There is a real risk that if we do not act now to increase the number and range of electric vehicles in New South Wales, particularly at lower price points, working families will be lumped with polluting vehicles that cost a fortune to run. They may also miss out on the ability to actually earn money from their vehicles. Bidirectional power—whereby a car battery can be used to power a home, known as V2H; or give power back to the grid, known as V2G—saves owners paying peak electricity or indeed, earns them cash when they sell power back to the grid. Global Sustainable Energy Solutions notes that:
The average EV has a battery sized at 43kWh and the average commute is 16km each way. Taking into account that the Australian home uses 19kWh of electricity daily and the average fuel economy of EVs is 18kWh/100km, a fully charged EV that undergoes the average commute has the capacity to supply power to a home for almost 2 days.
Think of that. Electric vehicle owners may be able to cut their household energy bills but they will also be able to earn money from parking their vehicles. ABC'sCatalyst recently profiled a fascinating story about Gary Hogben, who lives in the United Kingdom and earned more $1,000 in a year while his car sat in the driveway. Gary sells power from his EV battery to the grid during periods of peak demand and recharges during off-peak periods. Most EVs in Australia right now are not compatible with V2G bidirectional power, but that is all set to change by 2025 when all new electric vehicles will be V2G grid capable and, hopefully, the price of bidirectional chargers will be able to come down as the technology improves, making them more readily available.
The potential here is staggering. Researchers at Australian National University's Battery Storage and Grid Integration Program suggest that if the 19 million cars on Australian roads were electrified and fitted with V2G capacity, it would be the equivalent of more than 10,000 Tesla big batteries in storage. That has huge implications for Australia's National Energy Market, energy security, local manufacturing and local jobs. As EVs become more prevalent and popular, we must not lose the opportunity to create local jobs. PricewaterhouseCoopers found that Australia could see an additional 13,400 jobs in 2030 by building the infrastructure we need to support the three million EVs that will be on our roads by then. Those jobs will come in mining. We will source the lithium, nickel and cobalt, which are essential to batteries, and copper for wiring. If we get this right, we can create jobs in battery manufacturing and refurbishment here in New South Wales rather than offshoring these jobs as we currently do: We mine those minerals and we export them to China.
We can also be world-leaders in the manufacturing and maintenance of charging infrastructure. The Government plans to rapidly expand the charging network across the State and there is no reason why those charges should not be built here, installed and maintained by New South Wales workers. A key opportunity is harnessing the extraordinary potential and capacity of start-ups and our technology companies to be at the forefront of grid integration software and hardware development as electric vehicles evolve. We have to invest now in the training our mechanics and automotive workers who will need to help maintain those electric vehicles, which are complex, evolve quickly and operate at a much higher voltage than other industrial equipment like electric golf carts or electric forklifts, for example, so ensuring that mechanics and workers are trained will be essential to keeping them up-to-date with the latest technology and, most importantly, safe.
New South Wales can be a world leader in manufacturing the EV supply chain, not just be an exporter of materials and importer of parts. I believe the opportunities are there but the Government's strategy is failing to realise them. We must see greater ambition. EVs offer a very bright future, but realising a future whereby we harness the potential for battery storage, empower consumers and households to reduce their vehicle running costs and even earn money, support local jobs and cut emissions, requires urgent action now.
So what does the bill offer in terms of that future, opportunities and the required action? The bill is central to the Government's Electric Vehicles Strategy. The Minister has outlined the key aspects of the strategy, but the planks include rebates of $3,000 on the purchase of the first 25,000 electric vehicles sold for under $68,750 from 1 September 2021. The strategy offers fleet incentives to assist councils, industries and businesses to purchase electric vehicles through reverse auctions and promises to transition the government vehicle fleet to all-electric models by 2030. It invests $171 million over four years to build an electric vehicle charging network and to create EV tourist drives in regional New South Wales, including installing ultra-fast chargers every 100 kilometres on major New South Wales highways.
The Government has subsequently also released its electric vehicle charging masterplan, which outlines the Government's plan to create EV super highways and commuter corridors across the State and coordinate investment by electric vehicle charging companies. Importantly, the strategy proposes the phasing out of stamp duty on the sale of electric vehicles under $78,000 from 1 September 2021, and then from all electric vehicles and plug-in hybrids from 1 July 2027 or when electric vehicles make up 30 per cent of all car sales. From that point, the strategy proposes the introduction of a road user charge. The road user charge and stamp duty exemptions are the focus of the bill.
The Government has set the road user charge at 2.5c per kilometre, indexed to the consumer price index, applicable to eligible electric vehicles from 1 July 2027 or when electric vehicles make up 30 per cent of all new vehicle sales. Under the plan, plugin hybrid electric vehicles will be charged a fixed 80 per cent proportion of the full road user charge. According to the Government's calculations, the average petrol and diesel vehicle owner pays approximately $613 a year in fuel excise, whereas under New South Wales' new road user system, electric vehicle drivers will pay an average $315 annually or roughly half that of owners of internal combustion vehicles.
The hard truth is that it costs money to build and maintain the roads and infrastructure we need to keep our State moving. In 2018 the CSIRO predicted that revenue from fuel excise will drop by almost half by 2050, leaving a significant hole in road funding. Properly funding our roads ensures that they are maintained to be safe for all road users, including transport workers and families, and that maintenance is essential. We need a mechanism to ensure that the funding is sustainable. But we must also balance that with an acknowledgement that EVs have far less environmental impact and ensure that a road user charge does not disincentivise the uptake of low-emission vehicles. Based on the calculations that the Government has provided, Labor is comfortable that the proposed user charge achieves that balance.
The decision to delay the road user charge until such a time as the market has matured has been welcomed by groups such as the Electric Vehicle Council, the NRMA and a long list of environmental groups that support the legislation. The Government’s plan means drivers will be required to report an odometer reading to Transport for NSW, which will provide an estimate in a way that Transport for NSW considers reasonable. Drivers will be able to pay before or after kilometres have been travelled. If paid before, drivers must pay in 100-kilometre increments, and it will be an offence to drive additional kilometres above what has been paid for. If the postpaid option is used, drivers must notify Transport for NSW that this option has been chosen.
The bill allows Transport for NSW to approve devices to measure the number of kilometres travelled and to require persons to present information to calculate the charge. It also allows for Transport for NSW to work with other States and Territories to collect payments and for proceedings of an offence to be dealt with through the Local Court or by way of penalty notice. Labor has concerns about the current structure of the penalty regime associated with reporting odometer readings and questions whether the penalty regime is perhaps the best approach. That is why our amendment—the two-year review—is so critical. Labor has also flagged in conversation with the Government that amendments may come in the Legislative Council that provide a grace period or other measures that would mitigate any unintended consequences such as EV owners being penalised unfairly.
We also put on the record that this potentially lazy legislating fails to capture the capacity of electric vehicles. Let's be honest: Cars are already smartphones on wheels. It is bizarre that we would have to take a photograph of an odometer to register how much road user charge payment is required. We already have many technology devices and apps that are stand-ins for the old logbooks, so why would that technology option not be available? I ask the Minister to clarify whether all options have been explored to remove the onus of reporting mileage from owners. We also seek clarification on how Transport for NSW will monitor the provision of the road user charge to be payable on private roads. How will mileage on private roads be discerned separately from mileage on public roads? As I signalled earlier, Labor will also move an amendment in the Legislative Council to bring forward a two-year review after the commencement of the Act. That is essential because it is clear that the uptake of electric vehicles will gather pace and we want to assess that rate and see whether it aligns with the Government's modelling and projections. We also need to assess the Government's settings to see whether they are in the best interests of the people of New South Wales.
The Government has said that its strategy is intended to increase EV sales by 52 per cent by 2030‑31 and help New South Wales achieve net zero emissions by 2050. According to the modelling I detailed earlier, the Government’s plan may not be enough to achieve the emissions reduction we need. Bringing forward the review ensures that the bill and the scheme will have the impact that they need to have. The bill has the support of the NRMA, the Electric Vehicle Council, the Nature Conservation Council of NSW and other environmental groups. They recognise the need to act urgently to support the uptake of EVs in New South Wales. They know that it is a race to increase the number of EVs on our roads because we are a long way behind. Labor supports the bill because we cannot waste another moment. We want to ensure that all the opportunities that electric vehicles present are available to the people of the State.
Labor has a proud record when it comes to supporting electric vehicles in this country. We took a bold, principled and considered policy to the 2019 election that would see half of all new cars electrified by 2030, but that policy was derided by the Liberals and The Nationals. In fact, Michaelia Cash slammed Labor and accused us of coming at tradies’ utes. That set back progress on electric vehicle uptake for years. But the Liberals opposite know that that campaign was hogwash, and they support the bill before the House in part because we implemented a policy that would have seen an uptake in EV vehicles across the country. We cannot waste another minute. In fact, the climate deniers in Canberra are absurd and run counter to the bill that we are considering. It is not only Opposition members who are saying this; recently the former transport Minister had a crack at the Federal Liberals and Nationals in a speech to the Committee for Sydney—of course, after he abandoned the people of New South Wales and instead decided to join them in Canberra. On the issue of electric vehicles, New South Wales is at the precipice of taking up real opportunities when it comes to reducing emissions, local jobs and manufacturing. Members on this side of the House have been pragmatic, optimistic and, most of all, consistent on the issue. I commend the bills to the House.