Queensland's Transport Ministry ordered the $90 online test for new drivers last fall, regardless of nationality, the Brisbane Courier-Mail reported in its Thursday edition.
So far, 186 out of 869 people who have taken it have failed.
"I think it's ridiculous that English-speaking drivers have to sit the test, and there are no exemptions," cabbies union leader John Rahilly said. "The initial reason for the test was to remedy the problem ... whereby many current drivers are not fluent in English."
He said the $90 cost would be half a day's earnings for many.
Longtime cabbie John Barker said he was "stunned" when he reapplied for his license.
"I will not be paying for a certificate to prove that I can speak my native language," he said.
A government spokesman said the test checks the skills needed by taxi drives.
"Drivers are tested not just on their ability to speak the language but also on numeracy, writing, reading and listening skills," the spokesman said.
Texas principal bans speaking Spanish, stirs controversy
18-year-old elf alleges mall Santa pinched her buttocks on the job