Does Minister Josh Frydenberg dream of electric cars?

Putting increased take-up of electric vehicles in Australia on the same level of disruption as the introduction of the iPhone, as Energy and Environment Minister Josh Frydenberg did on the weekend, is head-turning and welcome, but it needs to be backed by proactive government policies. High on the list should be support for the installation of fast-charging stations and an exemption of electric vehicles from the luxury car tax. As cost-effective carbon abatement policies, they should go straight to the pool room, to borrow a phrase from The Castle.

On this page more than two years ago I argued that converting electric vehicles from a futuristic fantasy to a modern reality would require an integrated suite of policy initiatives, including a minimum proportion of electric vehicles in government car fleets and state-licensed access to high-occupancy lanes achieved through number plates indicating the vehicle is electric.

Further policy initiatives could include federal-state subsidies for fast-charging stations to ease range anxiety, which Frydenberg notes are already being rolled out quickly to form Queensland's electric superhighway from the Gold Coast to Cairns.

But the luxury car tax exemption is a federal responsibility alone. Seeking to deal with a budget emergency associated with a balance of payments crisis in the mid-1980s, the Hawke government introduced the luxury car tax: luxury being defined as any car priced at just above the most expensive Australian-made vehicle.

A higher threshold for the tax of $75,526 already applies for fuel-efficient vehicles, but the tax rate is 33 per cent of any value in excess of that threshold. For expensive electric vehicles this is a large additional impost.

While many electric vehicle models are priced below the threshold, granting an exemption for all electric vehicles would send a positive signal of the federal government's support for the revolution of which Frydenberg so enthusiastically speaks.

Dubious claim

The Turnbull government says it remains committed to the Abbott government's target of reducing Australia's carbon emissions by 26-28 per cent on 2005 levels by 2030. But its claim that its National Energy Guarantee would achieve that target for the electricity-generating sector is dubious at best. With the quiet release of figures before Christmas showing that Australia's carbon emissions have been rising since the scrapping of the carbon price in 2013 – and are projected to keep rising to 2030 – new policies will be needed to get anywhere near a 26-28 per cent reduction in electricity generation.

Even if the government were somehow to put Australia on track to reduce its emissions from electricity generation by 26-28 per cent, that would deal with only 35 per cent of the nation's total carbon emissions. Transport accounts for another 18 per cent and, with no effective action there, Australia cannot meet the government's emissions-reduction target.

More stringent emissions standards will be needed for conventional vehicles, but accelerating the shift to electric vehicles could make a useful contribution to the emissions-reduction task. As shadow climate change and energy minister, Mark Butler, points out in his book, Climate Wars, it takes a long time to renew a nation's car fleet, emission reductions would be slow at first but would gather pace over time.

Of course, the electricity used to power the vehicles would need to be generated from zero-emissions or low-emissions sources, but this is what is happening for new generation capacity anyway, where investors and financiers are indicating they will not install new coal-fired capacity in Australia.

Frydenberg cites Norway as a world leader in the take-up of electric vehicles, where 30 per cent of new car sales are electric. Its government provides enormous incentives for their adoption, including exemption from the 25 per cent value-added tax, free parking and free use of toll roads. Just wishin' and hopin' and thinkin' and prayin' for an electric vehicle revolution in Australia won't make it happen.

At a time when relations between the Turnbull government and several Labor state governments are strained to breaking point – especially on energy policy – a more collegiate atmosphere at the Council of Australian Governments could be achieved through co-operation on electric vehicles. Labor proposed this at the last federal election. The question now is: will the Turnbull government seize the opportunity to turn the ignition keys on electric vehicles and start the revolution?