State based EV road user charge (Overturned 18/10/23)

[ZeeDoktor]

All very valid arguments originating from different philosophies. Clean breathing air is also a common good, but Australia has done eff all to protect that good from those who can afford to willy nilly consume/soil it because it doesn't cost them anything. User charges would help in that instance as well.

My philosophy leans towards charging those for a good who consume it, regardless of personal or business circumstances. There's always room tax relief schemes and reimbursing particular cases. For example, I was pleasantly surprised when I got my first free annual rego because my toll road use is above $300 p.a. or whatever the limit is, I didn't even know the toll people shared my data with the roads and maritime people.

Admittedly though, that may be an example of things getting messy. Are we cross subsidising Transurban with schemes like this?

 

[Chuq]

Those that would pay less under your proposal would include large companies that require company cars

There would probably need to be different arrangements for businesses similar to buses, trucks etc.

 

[Vostok]

Everyone on the edge of their seats?

The High Court challenge commences on Tuesday and is scheduled to run for 3 days…

Case M61/2021 - High Court of Australia

Vanderstock & Anor v. The State of Victoria Case No. M61/2021 Case Information Catchwords Constitutional law – Duties of excise – Section 90 of Co...

www.hcourt.gov.au

 

[Maximillan]

Everyone on the edge of their seats?

Denuto's looking nervous about it.

 

[moa999]

Interesting also that despite going the the HC defending their right to tax,

The SA Govt has repealed the future tax.

Plug pulled on SA electric car tax - InDaily

South Australia's electric car owners no longer face the prospect of being slugged with a road users tax, with the former Marshall Government idea scrapped by parliament.

indaily.com.au

 

[gm12]

The Marshall government read the room

 

[paulp]

The Marshall government read the room

Marshall lost the last election. It is the mali (name to long) government that has repealed

 

[cafz]

Interesting also that despite going the the HC defending their right to tax,

The SA Govt has repealed the future tax.

Not really, the implications of this case going against the states are much wider than just the RUC.

 

[Vostok]

If you’re really keen, you can read the court transcripts here:

Vanderstock & Anor v The State of Victoria [2023] HCATrans 7 (14 February 2023)

Don’t ask me for a summary

 

[Vostok]

Day 2…

Vanderstock & Anor v The State of Victoria [2023] HCATrans 10 (15 February 2023)

I’ve skimmed both days. And if I was the plaintiff I’d be nervous this is not going well. The justices are robustly questioning the proposition that the ZLEV charge is so closely connected to the purchase of the good (the EV) that the tax is, effectively, an excise.

The Solicitor-General for Victoria has posited that four things need to happen before the ZLEV charge could be overturned, and that failing in any one of them is sufficient to sink the entire case:

1. The ZLEV charge cannot be considered a tax on a good, because it is a tax on a particular activity (driving on a public road), and therefore it is not an excise.
2. If the Court disagrees with (1) then the ZLEV is still not an excise, because it is a tax on the consumption of a good (which for a durable item means using it) and the court has previously ruled that a consumption tax is not an excise.
3. Then for the Court to disagree with (2) it would require the Court to reopen a previous case (Dickenson‘s Arcade) and if it did that, it should reaffirm it, and that makes the ZLEV charge still not an excise.
4. And if the Court reopened that case, and overturned it, it would then also need to reopen two subsequent cases, and by then the Court has travelled so far from the roots of this case that “the view of what constitutes an excise has become unmoored from the text, context and purpose of section 90.”

To me, that looks like a legal mountain for the plaintiffs to climb.

 

[moa999]

I skimmed day 1, and tend to agree with the above analysis. It was always going to be a tough argument to run and no doubt Vic had taken legal advice in drafting the law.

Basically the plaintiffs are trying to argue that a tax on distance is directly linked and will impact choice at the point of purchase and thus becomes an excise (Cth only) rather than a tax on consumption.

Best argument run imho was considering the following
- a 10% tax at point of purchase (eg GST)
- a 1% tax per year on initial purchase price
- a tax based on km used per year
Is there any real difference how a knowledgeable purchaser treats these.

 

[cafz]

I've read through and I can't tell which way the justices might be leaning - their poker faces are pretty good, at least in written form.

What does shine through is that the precedents in this area are a mess, with the court for a time following a line of reasoning ("criterion of liability") that attempted to create a bright line definition of what falls foul of s90 and what doesn't, then after a while realising that this didn't work because dodges were crafted to make an end-run around this criterion. There's precedent and reasoning dating from both before and after this change in approach, and it's not clear which of it remains good law. No-one can even agree on fully on what "excise" meant, either to the drafters of the Constitution or in the present day.

There's many strands to both arguments, but to pick out one: it seems generally agreed that Victoria can tax the use of roads: but is this legitmately a tax on the use of roads, or is it merely masquerading as that while actually being a tax on ZLEVs?

 

[Vostok]

I've read through and I can't tell which way the justices might be leaning - their poker faces are pretty good, at least in written form.

True, I was going to caveat my comments. You wouldn’t want to play poker against a High Court judge, and of course the M.O. for many is to aggressively interrogate the lines of legal reasoning, not because they don’t agree with it, but to test that it is sound. To stress-test it to the point of breaking, and if it doesn’t break, then the case is strong.

I found the conversation towards the end of Day 2 really interesting around the range of other state taxes that could be ”imperilled” if the ZLEV charge was struck down. The justices asked Victoria if they had quantified what the potential dollar loss of those taxes would be, Victoria was a bit circumspect saying they gave “careful consideration” to doing that but that “there is a very high degree of reluctance for those within government to file submissions in this Court identifying particular statutory provisions that are, on the State’s case, imperilled”.

Justice Edelmen said “It is one thing for the State to say, look, we do not want to stand up and argue the minutiae of why we lose and why all of these particular pieces of legislation are invalid. It is another thing to say, well, here is a list of 60 statutes that may, arguably – depending upon the breadth of the conception of the consumption tax – be imperilled” which implies there are up to 60 state taxes which could be at risk if the ZLEV charge is struck down, apparently outlined in “section F in the special case book”.

 

[evbee]

IMO, the 'imperilled' argument is a furphy (red-herring). It's about what is correct under the law and constitution. If it does 'imperil' other state taxes, so be it.

 

[Vostok]

IMO, the 'imperilled' argument is a furphy (red-herring). It's about what is correct under the law and constitution. If it does 'imperil' other state taxes, so be it.

And yet the justices were probing Victoria about it quite a bit, they wouldn’t be doing that if it was completely irrelevant to their deliberations.

 

[cafz]

IMO, the 'imperilled' argument is a furphy (red-herring). It's about what is correct under the law and constitution. If it does 'imperil' other state taxes, so be it.

It's relevant under the strand of argument that Dickenson's Arcade (which held that a consumption tax is not an excise) should be reopened and overruled. If they're being asked to revisit an old ruling, the degree to which that ruling has been relied upon in the interim is relevant. (It should be noted that the plaintiffs contend that Dickenson's Arcade is no longer good law anyway so does not even need to be overruled, in which case the other taxes imperilled would indeed be irrelevant).

 

[Chuq]

Done for the week - no news for a couple of months unfortunately...

 

[Candleflame]

whats the difference between excise and tax? I understood states are not allowed to levy tax but they allowed to levy excise?

 

[paulp]

if the states win, it will be a matter of time before the excise/tax is charged to every vehicle regardless of propultion. They cannot help themselves if there is some lazy tax money available

 

[bcarp]

if the states win, it will be a matter of time before the excise/tax is charged to every vehicle regardless of propultion.

I wouldn’t have a problem with that. It’s the EV specific nature of the current rules that I have an issue with.