Thank you. I know you join me in celebrating the fact that we meet on the lands of the Ngunnawal and Naru peoples today. And I pay my respects to elders past, present, and emerging. And thank you, Uncle Wally, for that welcome to the country.
And in acknowledging country, we must also acknowledge two fundamental truths, in my view. Firstly, there is no inequality that climate change doesn’t make worse, including indigenous disadvantage, whether it be people in substandard housing in remote communities or the people of the Torres Strait dealing with the impacts of climate change today on their beautiful islands that I was able to visit recently, and the prime minister was there yesterday.
And secondly, that First Nations people must be integral partners in charting the way forward. And I was pleased that my state and territory energy minister colleagues agreed unanimously last week to the development of a First Nations clear energy strategy. that will be co-designed with our First Nations people.
Also want to acknowledge that men, many members of Parliament here today, many state ministers led by the Chief Minister of the ACT, Andrew Barr. Good to see you, Andrew. Thank you for hosting us today. Andrew and I turn 50 together in a few months time. You’re all invited to a very big joint 50th birthday party that we’re planning. May well be here, but stay tuned. Many members of the federal Parliament from the government and the Cross Bench. It’s good to see you, and welcome to you all today.
Of course, Ambassador Kennedy, welcome. The Biden administration and the Albanese government are very closely aligned in our climate agendas. I’ve enjoyed strong interactions with John Kerry and Secretary Granholm in recent months. And congratulations on the passage of the Inflation Reduction Act, which could have easily been called the Inflation and Emissions Reduction Act. It’s a very big step forward for the United States and for the world. And my friend Siswo Pramono, the ambassador of Indonesia to Australia. Welcome, [foreign language 00:02:09]. I’m looking forward to joining our G20 energy minister and climate change minister colleagues in Indonesia the week after next. It’s good to see you.
And thank you to the organizers of today’s conference: Electric Vehicle Council, Smart Energy Council, and the Australia Institute for organizing the summit and, more broadly, for your advocacy, which is very valuable as we seek to put electric vehicles on the agenda at every opportunity. And thanks for your advocacy of better policies for electric vehicles against the tide in difficult circumstances in recent years, when the government of the day didn’t welcome sensible discussion. We now have a different dynamic. When we come together to discuss what more we can do together, not against each other, to give Australians access to the best modern transport technology.
Australia now has a government that gets it, but this is just the beginning. It’s not enough. We need collaboration not only across government, but across governments and across society to deal with the challenges and opportunities that are presented by climate change. And on behalf of the new government, I welcome your ideas and engagement and passion on electric vehicles and on so much more.
Now this summit comes at a good time, a time of hope that perhaps after a decade of denial and delay, after an era of demonization of innovation, after years of frustration, that we now have a chance to give Australians access to the world’s best transport technology. Friends, that hope is well founded. There is, of course, a strong case for action. Passenger cars make up almost 10% of Australia’s CO2 emissions, so serious action on climate change does involve serious action on transport emissions.
And as we all know, we’re experiencing significant cost of living challenges, and giving Australians better options, more access to cars which will never oblige them to lift a nozzle at a petrol station ever again, is very good policy, as well. A very good cost of living measure. In 2019, the Australian Electric Vehicle Association estimated that there would be an annual average saving of $500 in fuel and $100 in maintenance cost for every electric car in the national fleet. I reckon those figures may have gone up since 2019. And UBS estimates point to projected consumer savings of $1,700 per annum by 2030 on the total cost of ownership of an electric vehicle versus internal combustion engines.
Now naysayers point to the cost of electric vehicles, that they’re out of reach of ordinary families, as a reason not to drive further uptake. Now, to be fair, to an extent they have a point. There are many consumers who are interested in buying an EV, but even if they could access the limited supply, they can’t afford it. The price sends them to petrol or diesel vehicles against their will. Now what the commentators and the naysayers who bag electric vehicles as unaffordable and unavoidable in Australia miss, and I suspect in most cases deliberately ignore, is that this unaffordability and unavailability is a direct result of government policy. It is a direct result of decisions in Australia, Australian policy failures. If the intent of an electric car policy in Australia has been to limit the availability and choice for Australians, to make them more expensive than they need to be, then that policy has been entirely successful. If the intent was to give Australians genuine freedom of choice and access to some of the world’s best, most affordable cars, then it’s been a failure.
To me, this is ultimately about choice, freedom of choice. And Australian policy settings are denying Australians real choice of good, affordable, no-emissions cars. In fact, when asked, more than one in two people said they would consider buying an electric vehicle as their next car. But the actual number of cars sold, as BJ said, shows that there are serious barriers which need to be addressed. At last count, consumers in the United Kingdom could take their pick of 26 low-emissions vehicles under the equivalent of $60,000. In Australia, that number is eight, and they’re very hard to get. This lack of availability has, I think quite unsurprisingly, led to a lack of sales. Just 2% of cars sold here are electrical plugin hybrid, compared to 15% in the United Kingdom and 17% in Europe as a whole. In fact, Australia’s sales of electric vehicles are at a rate nearly five times lower than the global average.
And as the Electric Vehicle Council stated, the nation report said, “We need to see more electric vehicle models in Australia, particularly at lower price points. To get more models, we need the right policy settings so we could compete with other countries to attract the globally limited electric vehicle supply to Australia.” While we’re behind the pack, Australians are missing out, and without federal leadership, Australians will continue to miss out. In fact without action, to be frank, the situation may well get worse. While other jurisdictions such as the United Kingdom are signaling the banning of sales of internal combustion engine cars, we run a real risk of becoming even more of a dumping ground for cars that are expensive to run and at the back of the global pack.
But on the other hand, there’s also a case for optimism. Against the odds, with a very unfriendly federal policy setting, Australians have managed to edge up EV sales to 2% of total sales, off an appalling base of 0.7% in 2019. As I’ve said, Australians are making it clear that they would like to buy an EV if there was more access.
And we know from overseas experience, with the right policy settings, EV penetration can increase quite quickly. Sweden, for example, is an example which struck me, where the proportion of EV sales rose from 18% to 62% in two years. And we know from overseas experience, again, that once you get to 5% of sales, EV penetration can increase very rapidly because a critical mass has been reached. So we have a lot of work to do, but I’m very confident that work won’t be wasted. It will lead to results.
Now, as you know, we went to the election with a clear policy agenda, including for EVs. A driving the nation policy, establishing a truly national EV charging network with charging stations at an average interval of 150 kilometers on our highways, creating a national hydrogen highway refilling network, and to set a low-emissions vehicle target for the Commonwealth fleet of 75% of purchases by 2025. There are thousands of vehicles in the Commonwealth fleet, and it’s big enough to encourage more EV models to come to Australia. And because the Commonwealth turns over its cars once every three years, will expand the second hand market very quickly as well.
Now, we’ve already acted to make EVs cheaper. We passed our fringe benefits tax cut through the House of Representatives. I’m sure it’ll pass the Senate shortly. And we are making the 5% import tariff cut for eligible vehicles, as well. That’s not nothing. It’s material. In particular, the fringe benefits tax changes mean that a model with a sticker price of around $50,000 will be up to $4,700 a year cheaper for someone using a salary sacrifice arrangement. Or an employer paying for a car for their employee could save $9,000. These incentives are critical for fleet buyers, and in turn, secondhand markets, as well as commercial fleets turn over and sell their cars into the secondhand market.
Now we believe we can, and not only can and should, not only have the ability to drive electric vehicles, but also the capacity to produce them. My fellow cabinet minister Ed Husic is extremely passionate about Australian industry, including seizing the opportunities to be involved in the electric vehicle supply chain. Value adding to our abundant supply of critical minerals and rare earths is a key element to our industry policy, which Ed leads. Up to $3 billion of our $15 billion National Reconstruction Fund is available towards activities with a clean energy or renewable component to their manufacturing, and Ed and I fully expect participants in the EV industry to be actively pursuing opportunities for co-investment from that fund.
Our work in battery manufacturing in Australia also provides a complementary platform. Right now, as you all know, we dig up all the minerals necessary for a battery, but we send most of them offshore. It’s a lost opportunity for jobs and investment, and there are an estimated 35,000 jobs and $7 billion in value to be made in Australia from battery technology and industries across all sectors. That’s why Ed and the government will implement a national battery strategy and establish a battery manufacturing precinct in Queensland.
So there has been and will be no shortage of activity from the Albanese government in relation to electric vehicles. But the key to this is linking it together under an overarching strategy, and that’s why we’ve committed to the development of a national electric vehicle strategy. And we’re getting ready to go. Pardon the pun. We’re putting the wheels in motion on developing that strategy. I’m announcing the next steps today.
Today, I can confirm that we’ll be releasing a discussion paper during September to inform the development of the strategy. Now, I know I don’t need to encourage you to put in submission, but encourage you I do nonetheless, because it’s an important process. Yesterday, my friend and colleague, the Minister for Transport Catherine King, and I wrote to our state and territory counterparts confirming the next steps in the development of a national strategy and inviting them to be key partners in that strategy, and inviting them to feed into the policy development process. Many states have implemented their own agenda in the absence of federal policy, so now it’s a chance to work together to get the job done. And just as we’ve partnered very cooperatively with my state and territory energy minister colleagues last week to engineer a faster and more orderly transition, so we want to work in real partnership with the states and territories to deliver a national EV strategy.
The goal of the strategy is clear: to make EVs more affordable, to drive more choice to the market, to drive EV uptake, to reduce emissions, to save us all money on fuel, and to ensure that we’re taking advantage of local manufacturing opportunities. The EV strategy will be our roadmap to get there. And I can announce today that, importantly, the consultation paper will include exploring options for the introduction of fuel efficiency standards. We believe now is the time to have a sensible discussion about whether fuel efficiency standards could help improve the supply of electric vehicles into our market to address the cost of living impacts of inefficient cars and reduce emissions from the transport sector.
Apart from Russia, Australia is the only OECD country not to have or be in the process of developing fuel efficiency standards. The lack of standards in Australia is cited as one of the key factors impacting on the supply of EVs into Australia. Why? Because while Australia doesn’t show leadership, manufacturers will prioritize those markets that do. It’s pretty simple. It means that consumers aren’t getting the choice available internationally, and as the world moves to more efficient and cleaner cars, we risk becoming even more of a dumping ground for older technology which can’t be sold in other markets.
Now, as an example, publicly available analysis published by the Department of Infrastructure under the previous government indicated fuel efficiency standard phased in from 2020 could have already saved motorists up to $1.6 billion in fuel costs. Had that happened, emissions would’ve been reduced by up to 5.1 million tons, and we would now be on track to save much more in the lead up to 2030.
Now this will be a very genuine consultation process and a whole of government process as well. If the government decides to implement and adopt fuel efficiency standards as part of our national EV strategy after this consultation process, the detailed design work will be led by the Department of Transport under the leadership of Catherine King, and I’m very much looking forward to closely working with her as we do that. But from the outset, I do want to say this. While standards must be designed specifically for Australia, standards that lack ambition will leave us at the back of the global queue for longer. Back of the queue for cheaper and cleaner vehicles. We do need to aim for as close to best practice as possible, and I want to make that clear.
But I do think now is the time for the conversation that is open and constructive and mature on how we increase the uptake of electric and low-emissions vehicles. And once we’ve had that open and genuine discussion and consultation, once we’ve worked through the details of implementation carefully, as we do, we should proceed with alacrity to begin the turnaround of the impacts of 10 years of denial and delay in Australia.
So friends, we know the problems: lack of charging infrastructure, range anxiety, high costs, long waiting times, lack of availability. While these are big challenges, there are solutions to each of them. The solutions are different, but they ultimately come back to one thing: policy leadership, leadership the Albanese government will be providing. And just as we have in the broader climate debate, we’ll endeavor to provide that leadership in a way which brings Australians together. All of us on this journey, not division, not the politics of identity, but bringing Australians together on the important journey. Our Driving the Nation policy to have a fast charger every 150 kilometers, for example, is designed to ensure that Australians in rural and regional areas don’t miss out on the capacity to consider an electric vehicle for their next purchase.
While some in the past have chosen the politics of demonization and division, a better approach is collaboration and consultation. Electric vehicles cannot, and under us will not, be the preserve of well-off people in urban areas. They must be available for all. We want policy settings that make them available, affordable, and attractive to every Australian. We know we can provide Australians with that choice while preserving their ability to enjoy a good weekend away, while preserving their ability of choice, and preserving their ability to get the cars they want to reduce emissions. Friends, we’ve got a lot of work to do, a lot of work to do together. I very much look forward to joining you on the journey as we do that work. Thank you.