Pay per kilometre: State government backs plan to phase out fixed road charges

Victorian drivers face paying a distanced-based charge, instead of fuel excise and other taxes, under a major overhaul of road-funding.

Under the plan, which has been backed by the state government, fixed road-user fees would be replaced with variable taxes over the next decade.

The Andrews government has already set a 2.5 cents per kilometre charge for electric vehicles.

Acting CEO of Infrastructure Victoria, Jonathan Spear, says the changes are likely to eventuate.

“We think it’s much fairer … to make it more variable,” he told Ross and Russel.

“My father in law, who lives in the outer suburbs, he wouldn’t drive 1000 kilometres a year, but he’s paying the same amount of money, $800 or so, before he even rolls his car out of the driveway.”

The plan will help the state continue to fund roads as the revenue from the fuel levy declines, as more electric vehicles take to the roads.

Press PLAY below to hear more about the pay per kilometre plan