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

[evpaddie]

An article in the Financial Review yesterday supported the idea of the Commonwealth administering the tax and charging those EV tax avoiders. However, there's some real vitriol in this paragraph from the article:

"All of this could be eased if the Commonwealth takes the lead and schedules the introduction of a nationally consistent road user charge.
Politically, it would be easier to do it when those driving EVs are still in the minority, and are not fondly regarded by those without the means to shell out $60,000-plus for a two-tonne road wrecker which the owner operates for peanuts, all while demanding someone pay for more charging stations."

 

[Vostok]

Yes well that has overstepped the line between a news article and opinion. Which unfortunately is way too common these days.

Opinion writers can express opinions. Journalists should never have opinions (at least, not put those opinions into their news articles).

 

[paulp]

The bigger issue is that the “journalist” isnt asking why a tyre contact load of a mere 500kg is supposedly wrecking a road. Maybe the fuel levy needs an increase to make the roads more decent.

 

[cafz]

My opinion on the case is that if it was easy to know which way it was going to go, it would never have made it this far in the first place. The reasoning will be interesting to read no matter which way the court rules.

 

[Vostok]

My opinion on the case is that if it was easy to know which way it was going to go, it would never have made it this far in the first place.

Well, perhaps, but how often does someone walk into a lawyer’s office, and after assessing the issue the lawyer says “you don’t have a strong case, I’d be wasting my time and your money to take it on”

Given what’s at stake here, the States and the Commonwealth want to protect their prospective taxation powers, so both will throw everything at it in an attempt to prevail, even if they privately think the odds of success aren’t great.

 

[schnaxxl]

Well, perhaps, but how often does someone walk into a lawyer’s office, and after assessing the issue the lawyer says “you don’t have a strong case, I’d be wasting my time and your money to take it on”

Given what’s at stake here, the States and the Commonwealth want to protect their prospective taxation powers, so both will throw everything at it in an attempt to prevail, even if they privately think the odds of success aren’t great.

the states and the Commonwealth aren’t ‘both’ on the same side
I understood that the Commonwealth is supporting the plaintiffs

 

[Vostok]

the states and the Commonwealth aren’t ‘both’ on the same side
I understood that the Commonwealth is supporting the plaintiffs

Correct. The Commonwealth wants to stop the states imposing a tax that it argues is an excise, which is reserved to the Commonwealth under the Constitution. Every state and territory is out to prove otherwise, that the ZLEV charge is not an excise but a consumption tax hence lawful for a state to impose.

Ergo, each wants to protect what they see as “their” taxation power, even if they don’t currently use it.

If the plaintiffs win, then the High Court has made new law (since clarification of an existing law is creating ‘new’ law), and this type of consumption tax would never be able to be imposed by any state or territory. It would also bring into question a whole host of other existing state/territory taxes, which the states are also extremely nervous about, and more High Court challenges would probably be triggered on those.

If the plaintiffs lose, then the states/territories are given a permanent green light to impose these kinds of taxes, unless a referendum was held to change the Constitution to specifically outlaw it. But such a ruling would not stop the Commonwealth from also imposing a road usage charge, if it wanted to.

However any Commonwealth RUC would need to be at the same rate nationally, it could not impose a different charge in each state/territory in order to make the total RUC imposed the same (e.g. if VIC charged 2.5c/km and QLD 2c/km, the Commonwealth couldn’t impose 0.5c/km in VIC and 1.0c/km in QLD) because that would contravene Section 51(ii) of the Constitution.

Which is why I think if (when) the Commonwealth loses this case, they will seek to sit down with the States and negotiate a national approach to this. The states will have the upper hand, of course, since they could always walk away and keep taxing, but who knows what kind of “sweeteners” the Commonwealth could bring to the table to strike a deal and get the States to voluntarily give up this power.

The states voluntarily gave up income their income tax powers to the Commonwealth during the second world war. The constitution was not changed, a state could decide to impose its own income tax again if it wanted to. But of course, no state would dare now. Same with the GST, the states voluntarily agreed to give up a host of wholesale and indirect taxes in 1999 in return for GST payments.

 

[schnaxxl]

The states voluntarily gave up income their income tax powers to the Commonwealth during the second world war. The constitution was not changed, a state could decide to impose its own income tax again if it wanted to. But of course, no state would dare now. Same with the GST, the states voluntarily agreed to give up a host of wholesale and indirect taxes in 1999 in return for GST payments.

I thought there were High Court decisions that affirmed the taxing power of the Commonwealth
various aspects discussed here and in links

 

[moa999]

And same with the Corporations Law and ASX..
Before this each state has their own laws and state based exchanges.
Plenty of people took advantage of various arbitrages between states laws.

 

[cafz]

Which is why I think if (when) the Commonwealth loses this case, they will seek to sit down with the States and negotiate a national approach to this. The states will have the upper hand, of course, since they could always walk away and keep taxing, but who knows what kind of “sweeteners” the Commonwealth could bring to the table to strike a deal and get the States to voluntarily give up this power.

Such a national approach wouldn't necessarily involve the states referring their powers to the Commonwealth - they might just agree to all impose a uniform rate, in the same way that the road rules are standardised by agreement.

 

[SL666]

Because Petrol would got to $1/Lire

(ok maybe $1.50)

 

[OzVic]

However any Commonwealth RUC would need to be at the same rate nationally

Why? Currently Vic do and NSW intend to charge excise on two different types of cars (PHEV and EV) differently. There is no basis for this (it is a new excise not replacing anything previously). Surely they can charge excise on red cars, green sedans, cars with 19" wheels, and cars registered by females born in Dunedoo all differently?

If not, how is the current Vic excise not plain discrimination? Should be all or nothing.

 

[paulp]

Why? Currently Vic do and NSW intend to charge excise on two different types of cars (PHEV and EV) differently. There is no basis for this (it is a new excise not replacing anything previously). Surely they can charge excise on red cars, green sedans, cars with 19" wheels, and cars registered by females born in Dunedoo all differently?

If not, how is the current Vic excise not plain discrimination? Should be all or nothing.

If the commonwealth charged more for red cars in nsw, then there would be no red cars sold in nsw and anyone with cross border connections would register in another state

 

[cafz]

Why?

Because the Commonwealth is, broadly speaking bound by the Constitution not to impose differential rates of taxation across the States.

s99. The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.

The States in contrast have wide latitude to legislate as they see fit for the "peace, order and good government" of their state.

 

[SL666]

As i read the previous Vic proposed rates - it would mean hybrids were getting hit the hardest of all.

 

[cafz]

I note that the Commonwealth's homework assignment, on what it considers a 'first principles' understanding of s90 would mean, was due on Friday. No sign of it on the court site; perhaps they got an extension.

 

[Vostok]

I note that the Commonwealth's homework assignment, on what it considers a 'first principles' understanding of s90 would mean, was due on Friday. No sign of it on the court site; perhaps they got an extension.

Do they lose marks for submitting it late? Detention for 1 afternoon? .

VIC then gets 1 month to rebut the Commonwealth’s submission. So any delays will cascade…

 

[WhiteWardan]

Hopefully if the Commonwealth lose they could just introduce federal registration perhaps

 

[Vostok]

The Commonwealth Attorney-General has submitted his homework to the High Court and Victoria lodged its rebuttal last Monday:

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

Apparently the Commonwealth relies upon a definition of excise from the 1910 Encyclopedia Britannica

I’d expect a judgment around June.

 

[cafz]

Hopefully if the Commonwealth lose they could just introduce federal registration perhaps

I don't think they have the power, except probably for vehicles operated by companies under the corporations power.