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

[ZeeDoktor]

Creating laws (much like speed limits, or demerit points) is a completely arbitrary process and cannot be challenged through legal means (or so I was told by a traffic lawyer whose opinion on this I paid $250 for). Laws can only be changed through the political process, not by legal means. You can only contest an infringement notice, and even then you run the risk of losing in court, at which point you will then have to start answering "yes" when asked "have you ever been convicted" - even though it is not a criminal conviction. Super fair the system we live in here, and everybody gets to have their day in court, if you're willing to bet your life on it.

Bit of a digression:

Some other and equally infuriating examples: Why should a traffic offence attract a different number of demerit points depending on what date it was committed? It is the same offence after all, and from a scientific/rational point of view, the danger to others was the exact same.

More examples: Why can insurance companies charge you more for the mandatory CTP greenslip (in NSW) based on the number of demerit points you have, even if there is no statistical evidence that you are more likely to cause an accident if you have less than 13 points on your license? Why can other insurance companies outright turn you down for having as little as a single point, or raise the excess by thousands more? All without evidence, all without rational cause. Just pure speculative price gouging and opinion forging, backed by our very own government.

If you accept that speed is the main, sole, and only contributor to accidents: If speed cameras were indeed there to improve safety (as opposed to generate revenue), they would put speed cameras into locations where the evidence shows that an abnormally high number of accidents occur that are speed related, ALONG WITH A SIGN that says there's a speed camera there. That will slow people down. No sign and mobile cameras are pure forms of revenue generation.

Sadly, speed is hardly ever the main contributor to an accident, it's only a contributing factor. The main culprit without exception is inattention and distraction. Speed contributes by making the accelerations and decelerations harder, and thus increase the degree of injury. But with today's technology, there is little to no excuse in my view for still using such medieval practises of blaming a related factor as causal by decree.

It's a bit like going to the doctor with a sprained ankle and getting it amputated. It'll fix the sprained ankle, right?

 

[P100D_Me]

How does this EV tax establish your KMs travelled? Is it a simple declaration or photos of screen showing odometer or something else?

I had heard on the radio that one option was you could take the car to the local police station for them to verify it
As a Victorian suffering through another term of Labor incompetence, over spending and tax addiction (plus I am typing this under our 4th lockdown), I regularly visit realestate dot com > filter Sunshine Coast. It won't change here for a long time because the alternative government might actually be worse.

 

[EcoCloudIT]

I had heard on the radio that one option was you could take the car to the local police station for them to verify it
As a Victorian suffering through another term of Labor incompetence, over spending and tax addiction (plus I am typing this under our 4th lockdown), I regularly visit realestate dot com > filter Sunshine Coast. It won't change here for a long time because the alternative government might actually be worse.

Not the only one, may uproot/sell up and bring forward retirement 15 years....

 

[Vostok]

I'd like to know if it's constiutional to target a particular subset of a group (cars) for any arbitrary reason for a tax just because they choose to. ie. No underlying reason...

The only reasoning I have heard is the federal fuel tax BS, and that couldn't surely stand up in court considering it's nothing to do with the Victorian government.

I’m not a lawyer, but I think a State Government could tax red cars if it wanted to. Anti-discrimination provisions don’t extend to inanimate objects as far as I know.

That‘s why someone in VIC does need to talk to a lawyer who is an expert in this field. In my bush-lawyer view the two strongest avenues of challenge on this law are:

1. The Parliament does not have the extraterritorial powers it claims in order to tax VIC-registered EV driving in other states (note, it almost certainty does have the power to tax VIC-registered EV driving in VIC)
2. The Parliament cannot implement a state tax to notionally replace a federal one - especially when there is no direct connection between the two. Since this was used as justification for the law (and Courts don’t just look at the words in the Act but all the collateral that led up to it - any Government reports, studies, Committee papers and Hansard debates) then if the justification itself is unsound it could potentially lead to a striking out of the law or limits to its application.

Or I could be wrong on both counts

 

[Vostok]

Creating laws (much like speed limits, or demerit points) is a completely arbitrary process and cannot be challenged through legal means (or so I was told by a traffic lawyer whose opinion on this I paid $250 for). Laws can only be changed through the political process, not by legal means.

@ZeeDoktor - Courts regularly strike out unconstitutional laws and regulations, either at a State or Federal level. Or decide that a government cannot apply a particular existing law in the manner it has, limiting or “clarifying” its operation. Parliaments can only exercise the powers conferred on them by State and Federal constitutions. If they step outside that, the Courts can strike laws off the books.

It might not happen every week or even every month, but there’s usually a few examples each year of this happening. Often Governments relent when they realise they are about to lose a challenge in Court, because the absolute embarrassment of an adverse court decision is considered politically worse than the political backdown to change tack prior. That’s what happened in the RoboDebt case.

 

[modus0p]

I'd like to know if it's constiutional to target a particular subset of a group (cars) for any arbitrary reason for a tax just because they choose to. ie. No underlying reason.

Could they charge a road usage tax on 'all red cars'?

I think the answer to this is yes they can make arbitrary laws. There is a well know law which was challenged in the high court often referred to as the 'Julian Knight Law'. Its an extreme example but if you check Section 74AA of the Corrections Act 1986 (Vic) you will see a law which applies to one specific person who is singled out by name, there is a similar law in 74AB. The Government literally passed a law to keep these two men in prison. Those two sections also specifically exclude the charter of human rights applying to that law.

If that is permissible I suspect this is as well.

The Vic Constitution effectively says that parliament can make any law. Most laws end up being 'unconstitutional' if the federal laws conflict with them or if the federal constitution says only the Commonwealth can make those rules. That's because federal laws override state laws.

An interesting area to think about is that this is 'trying' to replace the fuel excise. If my memory serves me correctly the states are not allowed to pass laws creating 'excises' as the commonwealth constitution reserves this for the commonwealth. The states always wanted to tax petrol but doing so directly is an excise. Instead they had what they badged as a petrol selling licence so that petrol stations would be charged for selling certain volumes of petrol, of course this was passed on to consumers in the form of increased petrol prices. This was challenged in court and was found to still be an excise and so the states were stopped from collecting it. This is when the Commonwealth stepped in and increased the fuel excise to cover the states lost revenue.

The states are now seeing an opportunity to get their revenue back.

 

[P100D_Me]

It is my understanding the petrol excise (as it is marketed to non EV owners) is simply a general tax that majority of the money collected does not even go back into roads. So the excuse of EV's need to pay their share toward roads maintenance is not entirely true.

 

[Vostok]

It is my understanding the petrol excise (as it is marketed to non EV owners) is simply a general tax that majority of the money collected does not even go back into roads. So the excuse of EV's need to pay their share toward roads maintenance is not entirely true.

That’s right. Federal fuel excise goes straight into consolidated revenue. It is not quarantined in a fund for for spending on roads. Nor is there any formula as to how much money the Commonwealth spends on roads or any relationship between the proportion of excise collected in a state and the proportion of money the Commonwealth spends in that state on roads.

 

[meloccom]

Creating laws (much like speed limits, or demerit points) is a completely arbitrary process and cannot be challenged through legal means (or so I was told by a traffic lawyer whose opinion on this I paid $250 for). Laws can only be changed through the political process, not by legal means. You can only contest an infringement notice, and even then you run the risk of losing in court, at which point you will then have to start answering "yes" when asked "have you ever been convicted" - even though it is not a criminal conviction. Super fair the system we live in here, and everybody gets to have their day in court, if you're willing to bet your life on it.

Bit of a digression:

Some other and equally infuriating examples: Why should a traffic offence attract a different number of demerit points depending on what date it was committed? It is the same offence after all, and from a scientific/rational point of view, the danger to others was the exact same.

More examples: Why can insurance companies charge you more for the mandatory CTP greenslip (in NSW) based on the number of demerit points you have, even if there is no statistical evidence that you are more likely to cause an accident if you have less than 13 points on your license? Why can other insurance companies outright turn you down for having as little as a single point, or raise the excess by thousands more? All without evidence, all without rational cause. Just pure speculative price gouging and opinion forging, backed by our very own government.

If you accept that speed is the main, sole, and only contributor to accidents: If speed cameras were indeed there to improve safety (as opposed to generate revenue), they would put speed cameras into locations where the evidence shows that an abnormally high number of accidents occur that are speed related, ALONG WITH A SIGN that says there's a speed camera there. That will slow people down. No sign and mobile cameras are pure forms of revenue generation.

Sadly, speed is hardly ever the main contributor to an accident, it's only a contributing factor. The main culprit without exception is inattention and distraction. Speed contributes by making the accelerations and decelerations harder, and thus increase the degree of injury. But with today's technology, there is little to no excuse in my view for still using such medieval practises of blaming a related factor as causal by decree.

It's a bit like going to the doctor with a sprained ankle and getting it amputated. It'll fix the sprained ankle, right?

Some years ago I was heavily involved in CTP insurance. At the time, and I’m not aware that it has changed, NSW legislation allows an insurer to charge a different premium to different groups, only if they can demonstrate to the government a statistical difference from claims history. So it’s likely that an insurance company has been able to demonstrate a difference in risk between drivers that have no demerit points versus those that do.

 

[ZeeDoktor]

@meloccom Can you show me the relevant scientific body of work in a peer reviewed journal? Anything of a lesser standard should not suffice as evidence.

I'm more than happy to be educated, but it needs to be based on sound and complete data, statistically analysed and independently verified. The most obvious form of bias in such data would be taking kilometres driven into account. A person who doesn't drive, doesn't infringe. But that doesn't say anything about their risk profile. That data would need to be normalised for kms driven. Nobody knows how many kms individuals who have incurred demerit points (or who have incurred none) have driven.

The only Australian data available linking demerit points to accident probability I have found is a study from 1995, and their findings found statistically insignificant correlation with less than 13 points. Hence that limit....

 

[atj777]

@meloccom Can you show me the relevant scientific body of work in a peer reviewed journal? Anything of a lesser standard should not suffice as evidence.

Insurers can charge what they like for policies and it has nothing to do with peer reviewed papers. They have actuaries that assess the risk and then charge appropriately based on what they perceive that risk is (so they can still make money). This is done in-house based on their own data which they generally don't publish.

If their data show that there is a correlation (not necessarily causation) between demerit points and claims, they will use that to dictate their premiums.

This is why you will see vastly different premiums from different insurance providers for the exact same cover.

It is also why many providers now also give you a discount for driving less regularly because it decreases the risk of a claim.

 

[cafz]

Insurers can charge what they like for policies and it has nothing to do with peer reviewed papers. They have actuaries that assess the risk and then charge appropriately based on what they perceive that risk is (so they can still make money). This is done in-house based on their own data which they generally don't publish.

It's not necessarily the same with CTPI, which may be regulated more closely by the state as a consequence of being compulsory.

 

[atj777]

It's not necessarily the same with CTPI, which may be regulated more closely by the state as a consequence of being compulsory.

But even with CTPI the insurers still have to be "profitable". If their data show that people with more demerit points make more claims, they will charge more.

While CTPI is compulsory, the insurer you choose isn't compulsory. i.e. if you don't like what insurer A charges, you still have insurers B through M (or whatever).

 

[Vostok]

@meloccom Can you show me the relevant scientific body of work in a peer reviewed journal? Anything of a lesser standard should not suffice as evidence.

I'm more than happy to be educated, but it needs to be based on sound and complete data, statistically analysed and independently verified. The most obvious form of bias in such data would be taking kilometres driven into account. A person who doesn't drive, doesn't infringe. But that doesn't say anything about their risk profile. That data would need to be normalised for kms driven. Nobody knows how many kms individuals who have incurred demerit points (or who have incurred none) have driven.

The only Australian data available linking demerit points to accident probability I have found is a study from 1995, and their findings found statistically insignificant correlation with less than 13 points. Hence that limit....

I’m with @atj777 on this one - insurers employ actuaries, who are highly skilled professionals who have completed University degrees in some of the most complex mathematics there is, to model the risks and probabilities and claims being made by various insured cohorts. They have more ‘real‘ data on actual claims histories and risk factors that you or I will ever know or see.

They will also use peer-reviewed academic analyses of road traffic safety and risk factors to aid in their models and inform their conclusions.

In short, they don’t just make stuff up.

Now while correlation is not causation, when you have decades of claims history built up and hundreds of thousands if not millions of actual claims, then it’s pretty hard to argue there are not causal risk factors between certain indicators (e.g. age, km driven per year, demerit points) and claims history, therefore risk.

We might not be able to scientifically prove to an academic standard why such causation appears to be present, or fully explain the causal connections, but the evidence such causation exists is there.

 

[cafz]

But even with CTPI the insurers still have to be "profitable". If their data show that people with more demerit points make more claims, they will charge more.

They're still profitable if they charge enough across everyone to cover the claims. If they're allowed to charge those with more demerit points more it means they can charge those with less demerit points less (and recover the same amount overall); if they're not allowed, they just don't do that.

 

[ZeeDoktor]

Ok, I'm gonna grind ALL my axes in this one post, then we're done with it.

Nah, @Vostok, I'm not buying it. This is a huge pet peeve of mine. I'm a scientist and deal with data both statistically and quantitatively on a daily basis. As long as you (as in: my insurance company) claim correlation X to be true without providing verifiable data, you're just blowing steam up our butts in an attempt to profiteer and get away with it.

This is fine in a free market (and just exactly what constitutes a free market is another topic altogether - number of competitors etc. - in short there is no free insurance market in Oz). On top of that, this is NOT fine AT ALL when compulsory insurance enters the picture. The government is reducing my driving record to a points number, that says eff all about how safe I am as a driver. And it provides that data to third parties without my consent - and they draw completely invalid conclusions from it. That is a huge privacy breach, and it's happening on my dime.

We should also at that point talk about what "insurance" actually means. Fundamentally, it's a concept that's meant to cover the misfortune of the few with the contributions of the many, while affording those who provide the service with a means to exist. As soon as insurance companies are allowed to dilute that principle by picking risks (no matter the quality of the data they base it on), we've lost the idea of what insurance is all about, and it becomes a pay as you go service primed at maximising the profits of those offering that "service".

But back to demerit points and insurance premiums: I'd be totally happy to accept taking that metric for granted, and I would stand corrected, IF there was a scientific body of work that showed causation. We have the ability to provide incredibly finely grained data matrices today in order to underpin such policies with evidence. But that's not what's being used, because (and I postulate) the data is not there. So, enter Occam's razor: the most evident and simple solution is likely the true one. In the absence of them telling us what they're basing their guesswork on, the simplest solution is that they use exactly the least amount of verifiable evidence they can get away with. And because nobody ever asked to see that evidence, that most likely is a steaming heap of assumptions.

But, let me give you a first hand example of the insanity: I got blitzed doing 64 in a 60 on Dec 24 last year (along with the cars ahead of me and behind me). That's a 1 point offence, but thanks to religious bias in a so called secular society, that's now two points. These points will stay on my license for the next 3 years. So after paying the fine of $120, for the next 3 years, I'll pay a total of around $600 more for CTPI. And from next year, I will no longer be able to have comprehensive insurance on my car with my current insurer because I will have to tell them about the points, and they will decline to cover (I asked them). So I will need to find a different insurance which will no longer cover my car with new value replacement. So if I were to total the car after next year, the cost of those 2 points could conceivably be on order $80-100k, +$600 in CTPI premium increase. In what world is that an acceptable punishment for exceeding the speed limit by 4 km/h?

I should also point out that I keep accurate driving records. I've driven 1.3 million kms in the past 32 years - completely accident free. Statistically, I should have been in 2 ambulance involving accidents. How on earth is that data not being taken into account?

All axes sharpened, have a good night everyone!

 

[meloccom]

Most insurance premium calculations are part statistical and part business decisions, except NSW CTP where the government sets the “Standard“ premium and then a CTP insurer can apply for a variation of the standard premium for good or bad risk categories based on statistical proof supplied to the CTP authority.
Insurance statistics are commercial in confidence and are not available to the general public So insisting that someon’s opinion about risk calculation is valid unless it can be proven statistically wrong by another is a ridiculous assertion.
When the market value of the car and the agreed value start to vary by large amounts a claim puts the insured in a better position after the loss, this makes long term replacement options less about insurance and more about gambling, so I struggle to feel sympathy.
I too have suffered the imposition of demerit points in the M5 tunnel, when they lowered the limit temporarily from 80 to 40 Km/h. I went through the tunnel at about 8:30 PM and there were few other cars and whatever incident caused the temporary limit change had long been resolved. A bit confused, I only slowed to 56Km/h and I that was not enough to avoid a camera detected fine and demerit points despite my speed being perfectly reasonable for the circumstances “in my opinion“. I will disclose this at my next renewal and don’t expect any change in premium or terms as a result.
Choose your insurer wisely.

 

[Candleflame]

It is my understanding the petrol excise (as it is marketed to non EV owners) is simply a general tax that majority of the money collected does not even go back into roads. So the excuse of EV's need to pay their share toward roads maintenance is not entirely true.

indeed. The cost to extend the bruce highway as a dual carriageway/motorway from Gympie to Cairns is estimated to be around 28billion and hence there has been a high resistance to this project. I guess its sort of approved now by 2035 but we will see if it actually happens. And that's a damn long motorway (1300km).

Fuel exercise each year is well over 100 billion. We could easily have prestine highways, potholefree roads etc if the fuel money would actually cover just... roads.

 

[Vostok]

Nah, @Vostok, I'm not buying it. This is a huge pet peeve of mine. I'm a scientist and deal with data both statistically and quantitatively on a daily basis. As long as you (as in: my insurance company) claim correlation X to be true without providing verifiable data, you're just blowing steam up our butts in an attempt to profiteer and get away with it.

I have postgraduate qualifications in engineering and statistics so I’m not a total neophyte. But I’m also not an actuary, despite my high school career advisor pleading with me to do that course at Uni just so that the school could boast that they had an actuary among their alumni. Not surprisingly, I didn’t consider that to be a good enough reason to do a course I did not want to do... but I digress.

If your postulation was correct, then we’d expect to see a high degree of randomness between different insurers and similar risk cohorts, because if they were all ‘making it up‘ or coming up with premiums that were not evidence-based, then they’d all come out with vastly different answers for people with the same risk indicators. That happens to some degree but that’s probably more a compositional bias factor than anything else (i.e. they are overweight or underweight in certain risk profiles).

Such an approach (i.e. not evidence based) would almost certainly lead to that insurer going out of business, since they would either not be accurately calibrating their income (insurance premiums) with the risks of paying out and losing money every year; OR, they would charge too much, lose market share, and go out of business that way.

It seems your beef is that insurers slice and dice their policyholders into cohorts that are too coarse - ‘tarring them all with the same brush’ as it were - and that they identify risk factors that aren’t actually risk factors. Insurers could probably calculate individual risk profiles (although it would have large error bounds), but they don’t because it would make policy management a nightmare - requring applicants to answer 1000 questions rather than 20, as well as complicate the product and marketing side of the business - the more complex the offering (which of these 1000 buckets do you fit into?), the harder the sell it is.

Some insurers have tried a more ‘nuanced’ approach to this in order to sell it as a benefit - you probably know of one that advertises as such, i.e they claim to ‘tailor’ their premium more accurately to your ‘risk profile’. Whether that is true I don’t know, nor do I know how successful that approach has been in the contest for market share or for the ongoing viability of the business concerned.

 

[paulp]

I have postgraduate qualifications in engineering and statistics so I’m not a total neophyte. But I’m also not an actuary, despite my high school career advisor pleading with me to do that course at Uni just so that the school could boast that they had an actuary among their alumni. Not surprisingly, I didn’t consider that to be a good enough reason to do a course I did not want to do... but I digress.

If your postulation was correct, then we’d expect to see a high degree of randomness between different insurers and similar risk cohorts, because if they were all ‘making it up‘ or coming up with premiums that were not evidence-based, then they’d all come out with vastly different answers for people with the same risk indicators. That happens to some degree but that’s probably more a compositional bias factor than anything else (i.e. they are overweight or underweight in certain risk profiles).

Such an approach (i.e. not evidence based) would almost certainly lead to that insurer going out of business, since they would either not be accurately calibrating their income (insurance premiums) with the risks of paying out and losing money every year; OR, they would charge too much, lose market share, and go out of business that way.

It seems your beef is that insurers slice and dice their policyholders into cohorts that are too coarse - ‘tarring them all with the same brush’ as it were - and that they identify risk factors that aren’t actually risk factors. Insurers could probably calculate individual risk profiles (although it would have large error bounds), but they don’t because it would make policy management a nightmare - requring applicants to answer 1000 questions rather than 20, as well as complicate the product and marketing side of the business - the more complex the offering (which of these 1000 buckets do you fit into?), the harder the sell it is.

Some insurers have tried a more ‘nuanced’ approach to this in order to sell it as a benefit - you probably know of one that advertises as such, i.e they claim to ‘tailor’ their premium more accurately to your ‘risk profile’. Whether that is true I don’t know, nor do I know how successful that approach has been in the contest for market share or for the ongoing viability of the business concerned.

School careers people are a unique bunch. Mine insisted I should be a road designer. I objected but they sent me off on a week of work experience at the local road department. You draw two lines and the road design is done. You write tax on the side with an arrow pointing to the road…..I didnt make it to day 2