This thesis has been motivated by the need to preserve the scarce oil resources used by motorists for their personal transportation. The inquiry for this research was whether the government of Australia bears some responsibility for influencing Australian motorists’ choice and usage of motor vehicles, in order to reduce oil consumption and preserve this scarce commodity, and whether this responsibility is being achieved within the current regulatory and tax environment.This qualitative research has been conducted by using interpretive description and legal methodology. A tax policy solution has been suggested after investigating the problem by deconstructing prior knowledge in three areas: the status of oil reserves; the characteristics of motor vehicles that impact upon the consumption of oil; and the tax and regulatory measures that have been adopted by other countries to influence the choice and usage of passenger motor vehicles.A critical examination of the various policy options for Australia was conducted to suggest a solution for this identified problem and this thesis proposes that the best option for Australia is to conduct a comprehensive reform of the motor vehicle taxes and charges and introduce a Luxury Energy Tax (LET) system for motor vehicles based on the precautionary principle and the polluter-pays principle.The diagnosis of the problem and the design of a solution has been undertaken in this thesis using a step-by-step approach as follows: 1. Investigate the reported data on Australian and global oil resources. 2. Explore the need to focus on reducing oil use by passenger motor vehicles in Australia. 3. Explore the growth of passenger motor vehicle use, both globally and in Australia. 4. Explore the design and choice of passenger motor vehicles in terms of power and weight. 5. Investigate whether future car designs can resolve the oil problem. 6. Examine the current Australian regulatory and tax framework and its failure to promote oil efficiency in passenger motor vehicles. 7. Examine the regulatory and fiscal policies implemented by other countries to promote oil efficiency in passenger motor vehicles. 8. Explore specific studies on motor vehicle taxation undertaken by the Netherlands, Norway and the State of Oregon in the USA. 9. Analyse the criteria to develop a framework for Australia to promote energy-efficient passenger motor vehicles. 10. Design an interventional strategy for Australia, being a tax framework for the Luxury Energy Tax (LET).In order to design the LET criteria, it was necessary to examine the motor vehicle characteristics that cause increased oil use and emissions and to ensure that these characteristics are taken into consideration in the design of the LET. The administration, operation and implementation of the LET system are explained in detail in this thesis. The proposed LET is then evaluated in terms of various criteria including its net revenue generation potential, the known criteria of a good tax and the ability of the tax to change behaviour. It is proposed that the revenues from the LET be directed towards building public transport infrastructure. The LET provides a new policy approach directed at resolving the problem of how passenger motor vehicles are perceived and reducing the demand for large and powerful motor vehicles that consume and diminish the limited oil resources.This thesis identifies the opportunities that could arise through the introduction of a LET, including the design of a new micro-light LET motor vehicle and modernisation of the public transport system. The message from this thesis is that a new way of thinking is required regarding passenger vehicle transportation, and the application of this new way of thinking might bring about benefits and opportunities. This thesis also identifies that without a strong political will, these regulatory and fiscal reforms would only end up as a window-dressing exercise
