Big tax question every Aussie wants answered as Albanese government mulls new fee that will target one group

By NICHOLAS COMINO, POLITICAL REPORTER, AUSTRALIA Published: 04:41, 12 April 2026 | Updated: 04:48, 12 April 2026 The transport minister has confirmed the Albanese government has spent months developing a model for a national road user charge aimed at electric vehicle drivers. Catherine King was pressed on the matter on Sunday as ABC Insiders host David Speers asked when drivers should expect the new tax. Electric vehicles are currently exempt from the 52.6cent fuel excise that petrol car owners have to pay when refuelling their vehicle at a petrol station.  A road user charge is a system where EV drivers would be required to pay for using roads based on distance travelled, vehicle weight or location. 'My department has been working on the model for what a road user charge might look like,' King said. 'That was flagged in the Mid‑Year Economic and Fiscal Outlook and we've been working on that since December.' The fuel excise raised about $15.7billion in 2023-2024. EV sales have grown with 15,839 cars sold in March, marking a 42 per cent increase on the previous month. As Australians increasingly shift to EVs, that revenue from the fuel excise is shrinking, and economists warn it is creating an inevitable fiscal black hole. Catherine King (pictured) said the government was considering a road-user charge Treasurer Jim Chalmers publicly flagged the issue last year, arguing Australia can no longer rely on fuel excise alone as petrol vehicles are replaced by EVs. After a government economic reform roundtable in August, Chalmers said road-user charging was 'an idea whose time has come', making clear the government is considering how to introduce the policy.  Any rollout is likely to begin cautiously, with a trial focused on heavy electric vehicles rather than everyday motorists. Despite ongoing policy work, King insisted the government isn't ready to implement the measure yet. 'We're trying to encourage as much electric vehicle uptake as we possibly can,' she said. 'We don't want to disincentivise that at all.' Speers pressed her repeatedly on timing, asking when Australians should expect to start paying. 'So when will the government finally introduce a road user charge?' he asked. Speers (pictured) questioned King over when the government would introduce the charge  King argued that now may not be the right time, politically or economically, to introduce a new tax, especially as high fuel prices and government incentives are driving surging EV sales. 'It may not be the time for it right now. There's a balance to be struck,' she said. Parliamentary reality is another complicating factor, with King admitting any national charge would require new legislation, and she's unsure it would pass. 'It's obviously going to have to be legislated through the parliament. I'm not clear that there's a pathway for it at this stage.' The government's caution is already causing friction with the states. Both New South Wales and Western Australia have signalled they'll introduce their own EV road user charges from July next year unless Canberra acts first.  That risks a muddled system where drivers face different costs depending on their location. 'If there is such a scheme, it does need to be national,' King said. 'But that's a matter for states and territories.' The road user charge would target electric vehicle owners, who aren't charge the fuel excise (stock image) King noted previous High Court rulings have cast doubt on whether states even have the constitutional power to introduce such charges. This looming tax debate comes as the government reviews generous EV policies, including the popular fringe benefits tax exemption on novated lease, a measure critics say largely benefits the wealthy. Asked directly whether that tax break would survive the budget, King refused to say.  'That's a matter for the budget,' she said. No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.