Aussies to get more details on new tax on drivers within weeks

Thursday, 21 August 2025 19:11

Australians will have a clearer idea of what kind of tax they'll have to pay for driving on our roads in a mere matter of weeks following the federal government's productivity roundtable.

After three days of talks in Canberra, Treasurer Jim Chalmers said he was optimistic about the level of consensus and the appetite for reform, but any hopes of major, concrete policy emerging directly from the summit were dashed.

Instead, there was a list of 10 topics of consensus and eight priority areas where the government will seek to move quickly on reform, with Chalmers saying "a lot of the hard work begins now".

Treasurer Dr Jim Chalmers at a press conference following the Economic Reform Roundtable meeting, at Parliament House in Canberra on Thursday 21 August 2025.

One of those areas is a road user charge, which Chalmers said "there was a lot of conceptual support for".

While a final model hasn't been settled on, state and territory treasurers will be presented with a list of potential options on September 5.

"Right around the table, people had a view that this is an idea whose time has come and so we will do that work," Chalmers said.

"It does, I think, encourage us down that path. But as you know, this is something we've been working on for a little while as well.

"We've got some good views, some good input. We'll work with the states and territories to try and work out the best model on the best timing."

A Hyundai Kona Electric charges at a EV charge station

The charge, which has been previously flagged by Chalmers, is essentially a tax levied on some or all drivers.

It's needed by the federal budget to make up for declining fuel excise revenue due to Australians increasingly shifting to hybrid and electric vehicles.

While many of the proposals flagged by economists and think tanks prior to the roundtable focused on tax reform, no consensus on the issue was reached during this week's meeting.

Instead, Chalmers said the government would continue talks with the experts invited to the summit about taxation.

When asked about former Treasury secretary Ken Henry's characterisation of the tax system as "intergenerational bastardry" that treats younger Australians unfairly, the treasurer acknowledged work needed to be done.

"Our tax system is imperfect and one of its most troubling imperfections is best seen through an inter-generational lens," Chalmers said.

"Almost everybody around the table had a similar view, which is we take our responsibilities to the coming generations seriously.

"We recognise that we, as people of influence, with this opportunity have responsibilities in lots of ways, but especially inter-generational responsibilities and we take them very seriously."

Government's 'reform directions' from productivity roundtable

Progress towards a single national market
Simplify trade and reform tariffs
Better regulation
Speed up approvals in national priority areas
Build more homes more quickly
Make artificial intelligence a national priority
Attract capital and deploy investment
Build a skilled and adaptable workforce
A better tax system
Modernise government services

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