Government Economic Summit Builds Consensus for Electric Vehicle Road User Charge
Finance Minister confirms broad support for new fee as roundtable addresses budget pressures and intergenerational tax inequality
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Electric vehicle drivers will face new road user charges under proposals gaining widespread support at the federal government's three-day economic reform roundtable in Canberra, Finance Minister Katy Gallagher confirmed Wednesday.
Speaking during a lunch break from the summit's final day focused on tax reform, Gallagher said industry, union and community representatives have shown "a lot of support and acknowledgement" for implementing charges as Australia transitions away from petrol-powered vehicles.
"As our economy transitions to net zero, as people move from petrol to EV vehicles, we need a way to ensure that we're funding the infrastructure we need, the road infrastructure we need around the country," Gallagher told ABC News. "There did seem to be largely agreement on that."
The proposal represents one of the clearest policy directions to emerge from the Albanese government's economic summit, which has brought together more than 100 leaders to address budget sustainability and productivity challenges. Infrastructure Minister Catherine King is already conducting consultation with state counterparts on implementation details.
Intergenerational Tax Inequality Takes Center Stage
The roundtable's tax reform sessions have highlighted growing concerns about intergenerational inequality, with participants including former Treasury secretary Ken Henry, crossbench MP Allegra Spender and Australian Council of Trade Unions representatives all raising the issue.
Gallagher acknowledged the problem, saying "it is getting harder for younger generations in tax, in other areas as well" while stopping short of committing to specific remedies.
"I think there is a responsibility on us to make sure that the systems we have, whether it be tax or the systems we provide, how we provide services, that we deal with those things, that we don't ignore them," she said.
The minister declined to specify whether the government would launch a formal tax review or white paper process following the roundtable, saying she preferred to wait for Treasurer Jim Chalmers to outline outcomes at the session's conclusion.
Political Tensions Emerge Over Spending Rules
The collaborative atmosphere was briefly disrupted Wednesday morning when Shadow Treasurer Ted O'Brien challenged the government's fiscal management during budget sustainability discussions.
Gallagher, who witnessed the exchange, said O'Brien raised "a number of points" about implementing clearer spending rules, including caps on the tax-to-GDP ratio and limiting spending growth to economic growth rates.
"Jim had to kind of say, look, this probably isn't the right place for this, but everything you just said was not correct," Gallagher recounted.
The Finance Minister defended the government's fiscal framework, noting published budget rules and strategies that she said exceeded any benchmarks proposed by the Opposition.
"On any of the rules that people were talking about, we have exceeded them," she said. "It's a bit simplistic to run a line that just cut spending and all our problems will be solved."
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Seven Structural Budget Pressures Identified
Government officials have identified seven major structural pressures threatening long-term budget sustainability, with five concentrated in the care economy including health, aged care, disability services, education and defense spending.
The summit has grappled with managing these growing costs while maintaining essential services, particularly as demographic changes drive demand for care services.
"When you have a look at the top 20 programs that are growing and are big pressure on the budget, all of those are around health, education, aged care, disability, defence," Gallagher said.
NDIS Reform Expectations for States
Following Tuesday's announcement of a $2 billion "Thriving Kids" program to support children with mild developmental delays outside the National Disability Insurance Scheme, Gallagher confirmed expectations that states will provide matching funding.
"That is the expectation, so we've made provision for that," she said, describing the program as addressing gaps in early intervention services that disappeared as the NDIS expanded.
The program aims to prevent children who need temporary support from entering the NDIS permanently, recreating therapy and early intervention centers that operated before the scheme's introduction.
"The system that used to exist outside the NDIS, the therapy centres, the early intervention centres, the areas you went when your child was maybe a bit delayed, needed a little bit of help but otherwise got back on track, they don't exist anymore," Gallagher explained.
Some state governments expressed surprise at the announcement's timing, learning details when NDIS Minister Mark Butler spoke at the National Press Club. Gallagher said foundational supports had been discussed extensively, but the federal commitment to co-fund delivery represented a significant policy shift.
Implementation Timeline and Federal Role
The Thriving Kids program will begin operating from July 2025, with full implementation expected by July 2027. Gallagher indicated the Commonwealth would take an active delivery role rather than simply transferring responsibility to states.
"We're not just outsourcing that to the states and saying, you've got to deliver all of this. We're saying we want to be a player in that," she said.
The program could integrate with existing services including Medicare provisions and state-run child and maternal health programs, though detailed implementation plans remain under development.
Roundtable Collaboration Praised
Despite political tensions, Gallagher praised the roundtable's collaborative approach, highlighting participants' willingness to consider issues beyond their immediate expertise.
"The goodwill and the collaboration that's been shown, the time that people have given up, these are senior leaders in their own field that have been prepared to come here and sit for three days," she said.
The summit has brought together representatives from business, unions, academia and community organizations to address complex economic challenges without simple solutions.
"If there was a magic switch, we would have switched it and flicked it," Gallagher said. "It is longer, harder, thoughtful work, and so no doubt there will be things that come out of this that will take longer."
Broader Economic Reform Agenda
The roundtable has addressed productivity improvements, artificial intelligence integration, climate transition and budget sustainability across multiple sessions since Monday.
Gallagher emphasized that complex economic challenges require sustained effort beyond the three-day summit, with ongoing work expected to flow from discussions.
"The relationships and the preparedness to come and talk and listen to each other's perspectives has been incredibly useful for everyone, not just government," she said.
Treasurer Chalmers was expected to outline specific policy directions and next steps at the roundtable's conclusion Wednesday afternoon, following final sessions on tax reform and budget sustainability.
The summit represents the government's most significant economic policy consultation since taking office, bringing together diverse stakeholders to address long-term structural challenges facing the Australian economy.
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