Cigarettes, whiskey and electric cars

By 2353NM

It’s all very well for us to say how much we deplore the arrogance of our Prime Minister, but as Aussies who live under his ‘rule’ we can’t avoid the awkward fact that those who live elsewhere may see us as tarred with the same brush! How easy would it be for them to believe arrogance is an Australian characteristic? His behaviour taints us all.

Those of a certain age might remember the regular headlines in the 1970s and 1980s after the federal budget that screamed ‘Smokes and Beer tax up again’. There was a double benefit to the government of the day in raising the consumption taxes on tobacco and alcohol products. Not only did they increase taxation revenue, if there were complaints the government could easily justify the decision by suggesting there are a number of health benefits from not smoking or significantly reducing your consumption of alcoholic drinks.

According to an American ‘stop smoking’ website, Philip Morris reported in 2012 it cost them $0.26 to make a packet of Marlboro cigarettes. A packet of 25 Marlboro cigarettes is around $52 online at the time of preparation of this article. The Australian Taxation Office helpfully publishes a table of the taxes it applies to alcohol products which is, well, complicated. Governments in Australia have accepted the challenge to create change using the taxation system for decades. Yes, there is an element of revenue raising, however it’s easy to argue that the improved health or wellbeing of the community as a result of the measures is the greater benefit.

The nation’s Prime Minister, Scott Morrison, was invited to the virtual ‘climate summit’ hosted by US President Joe Biden and seemed to be claiming that technology will fix the environment (while having problems with his ‘mute’ button) rather than targets. Yet, the Coalition Government doesn’t see it as necessary to assist existing emissions reduction technology to become commonplace. Any number of websites will give you the current pricing of hybrid or fully electric vehicles and there is also plenty of discussion on the disparity of pricing of electric vehicles in Australia versus other developed countries where emissions reduction is apparently being taken somewhat more seriously.

As recently as April 2019, the Coalition was screeching that (then) Opposition Leader Bill Shorten was

coming for your utes and will kill off the iconic Aussie trayback.

At least that is the claim from Small Business Minister Michaelia Cash, who yesterday accused the Labor leader of wanting to take away people’s petrol-guzzling cars and force them to buy electric vehicles instead.

The sheer dishonesty of the statement is shown in an interview (also from 2019) between Carsguide and the Sales and Marketing Vice President for Toyota Australia Sean Hanley

“We’ve always maintained that whatever we do in the future, we will continue to have HiLuxes, we will continue to have LandCruisers going forward. And we will bring out — in the future — some type of electrification. There’s no doubt — we have to to meet targets,” he said.

Mr Hanley went on to say that rural customers aren’t the ones that will need to be won over when it comes to these sorts of commercial vehicles. In fact, he intimated that those who live outside the big cities are more likely to be interested in alternative-fuel versions.

“We are giving certainty to our rural customers that we will have capability (in those hybrid utes and off-roaders). Whatever we bring out, we will have the capability required to fulfil their requirements.

“These customers work the land — they know the environment and the requirements going forward. These people live and breathe the nutrients of the Earth. They’re all for reducing the CO2 footprint – so therefore it’s incumbent on us to be providing vehicles and mobility services in the future that suit their requirements,” said Mr Hanley.

There are various suppliers that will sell you hybrid, plug in hybrid and fully electric vehicles in Australia. Toyota and Hyundai already have hydrogen powered vehicles in Australia, but there is a lack of infrastructure to support them. Toyota plan to have a hydrogen powered vehicle available for general sale in about 3 years.

In February 2021, the Coalition Government released a report that attempted to justify the lack of investment or incentives in electric vehicles. The report, entitled Future Fuels Strategy, is, according to The Australia Institute full of misleading, inappropriate and incorrect assumptions. Of course, the assumptions used suggest that electric and hybrid vehicles are not an effective ‘weapon’ in the reduction of carbon emissions into the environment.

Probably even more cynically, the Victorian State Government has realised that electric vehicles don’t pay excise on petrol and hybrids don’t pay as much as petrol powered vehicles, so they recently debated and passed a ‘tax’ to be applied to electric/hybrid vehicles which will be paid annually at the time of the registration payment. To be fair there is also a small rebate on the purchase of some electric vehicles. As The Guardian points out

The recent flare-up of interest in taxing electric vehicle use is a classic example. For decades economists have argued Australia should introduce “mass distance pricing” for heavy vehicles. When you double the weight of a vehicle, the amount of damage it does to the road increases by 16 times. As a result, a heavy vehicle can do up to 20,000 times as much damage to a road as a passenger car. It’s a big problem.

But trucking companies pay a far lower rate of fuel tax than ordinary Australians. While the rate of fuel excise you pay when you fill your car is 42.3 cents per litre, for vehicles weighing over 4.5 tonnes it’s just 25.8 cents per litre. And while the rate of fuel excise paid by passenger vehicles is indexed to inflation, under the Coalition the road user charge paid by heavy vehicles has actually been reduced.

The article goes on to point out

Each night more than 3,000 trucks now drive between Sydney and Melbourne while the share of rail freight between those cities has fallen from 20% to 2% since the 1990s.

According to the National Transport Commission, the body that sets the fuel tax rate paid by trucks, “government expenditure on roads had increased to an extent that heavy vehicle charges would have needed to increase by 11.4% for 2020–21 to achieve full cost recovery”.

While some of the 3,000 heavy vehicles could soon be powered with ’swappable batteries’, a semi trailer’s 42 tonnes pounding up and down the highways of our nation still creates much greater damage than the typical 1.5 to 2 tonne private vehicle.

Diesel vehicles produce particulate which is hazardous to health when significant quantities have been ingested. They and petrol vehicles both produce carbon monoxide and other environmental nasties.

It is rational to introduce price signals to modify behaviour that is injurious to health and welfare and governments have done this for decades. So why the proposal to tax something that is environmentally better than the alternative, such as energy efficient electric/hybrid vehicles? Since the justification is apparently that all vehicles should be treated equally to fund repairs, maintenance and new road construction, why doesn’t the transport industry ‘pay its way’ when its competition, the railway system, is forced to.

Sounds like vested interests – doesn’t it?

What do you think?

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This article was originally published on The Political Sword

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