The Australian federal government is considering introducing a new road usage tax, as part of broader tax reform and the transition to new mobility trends.
The proposal emerged following a three-day productivity forum in Canberra, attended by ministers, economists, and state and territory representatives, aimed at identifying priority reforms for the nation.
Purpose: Offset fuel excise revenue losses
Treasurer Jim Chalmers emphasized that the measure is needed to compensate for declining fuel excise revenues, as Australians increasingly adopt hybrid and electric vehicles. “The time for this idea has come,” Chalmers said, noting that by September 5 states and territories would receive a list of potential options for implementing the new charge.
Framework of reform
The forum identified ten priority areas, including accelerating approvals for national priority projects, increasing housing supply, improving regulatory processes, developing a skilled and adaptable workforce, and recognising artificial intelligence as a national strategic priority. Despite these discussions, no full agreement was reached on comprehensive tax reform.
Reactions and concerns
The opposition has warned that the new tax could disproportionately affect drivers, particularly in rural and remote areas where car use is essential. Experts caution that without clear communication and careful design, public backlash could be significant, echoing reactions to previous fuel and road charges.
Chalmers highlighted that the government is taking “intergenerational responsibilities seriously,” acknowledging that decisions made today will have long-term effects on younger generations and the sustainability of public infrastructure.
