A little-known state land tax that gets passed through to every Victorian electricity bill has now reached a record $268 million, adding more than $70 annually to the average household bill.
Originally introduced in 2004 to fund subsidies for Alcoa’s aluminium smelter, the easement tax applies to land with high-voltage power lines and is tied to rising land values. As property prices increase, so too does the cost of this levy — and so far, there’s no sign of it slowing down.
Despite calls from industry leaders and advocacy groups, the Allan Government has shown no intention of removing or even capping the tax.
Tennant Reed, Director of Climate Change and Energy at the Australian Industry Group, didn’t hold back in his criticism.
“The easement land tax remains Australia’s stupidest tax,” Mr Reed said.
“Every year, as land prices rise and concerns over energy costs increase, this tax gets even more ridiculous.”
Energy Users Association CEO Andrew Richards said the levy is placing a “vice-like squeeze” on industry and consumers alike. He also warned that once new transmission lines are built, even more costs could be passed on through this mechanism.
Gavin Dufty, Energy Policy Director at St Vincent de Paul Society, echoed the concern, describing the easement tax as “a forever-growing charge being silently added to household electricity bills — at a time when families can least afford it.”
He added that it’s time for a formal review into whether the tax is still necessary.
A spokesperson for Treasurer Jaclyn Symes responded by noting that Victoria’s electricity bills are forecast to decrease over the next decade.
“This year’s Budget delivered real support to help families with energy costs, including a $100 Power Saving Bonus for vulnerable households, reduced prices for efficient hot water systems, and personalised energy bill support,” they said.
But Shadow Energy Minister David Davis condemned the levy, accusing the government of hiding the cost.
“Jacinta Allan’s land tax on electricity infrastructure is directly driving up power bills. This is a hidden tax that hits every Victorian family and business — especially during a cost-of-living crisis,” Mr Davis said.
As new infrastructure projects roll out across the state, critics fear this “stealth tax” will keep growing — unless the government steps in to rethink how Victorians are charged for their energy.
