Coalition’s car reforms don’t go far enough

By Leith van Onselen

As reported in The Australian, the Abbott Government is considering allowing personal imports of overseas vehicles, provided they are less than a year old and have travelled under 4,000 kilometres:

Assistant Infrastructure Minister Jamie Briggs, who has been consulting on changes to the Motor Vehicle Standards Act, said the government also wanted to harmonise Australian standards with international guidelines “as quickly as possible”.

“We want Australians to have access to the best possible vehicle fleet, the safest vehicle fleet and the cheapest vehicle fleet they can get access to. We want a competitive market,” he told The Australian.

Mr Briggs said the Act had not been reviewed since 2000 when 75 per cent of the country’s new vehicles were manufactured in Australia, compared to eight per cent today and “all but zero” expected in 2018.

Predictably, the proposed reforms have been met with resistance from the Motor Traders Association, which promptly released a media statement warning of dangers to consumers:

“If this Cabinet decision is upheld, anyone could realistically purchase any new car from any marketplace without realising the full upfront costs of purchasing and importing; not to mention the ongoing service costs of the vehicle,” Mr Unerkov said.

“And their simple response of ‘buyer be aware’ is an inadequate response from government.

“This decision will open Australian consumers to potential scams, unusable warranties, exorbitant service/repair costs and at the extreme, vehicles which are unable to be serviced in Australia due to a lack of knowledge, skills or available parts,” Mr Unerkov said…

“So we say to consumers, ‘be aware’ of the Government’s policy and the long term impacts it will have,” he said.

If anything, the Coalition’s proposed reforms do not go far enough, and should also allow the importation of high quality second hand vehicles, as occurs in New Zealand, where used imports represent around two-thirds of all vehicle registrations in a year, with most imports coming from Japan.

With the local automotive industry scheduled to shutter by 2017, there will no longer be any justification for punishing Australian consumers with over-inflated car costs. New Zealand consumers have gained greatly from opening its market to high quality Japanese used cars, lowering costs for consumers without compromising the safety of its vehicle fleet.

Indeed, the Productivity Commission’s (PC) report into Australia’s Automotive Manufacturing Industry, released last year, specifically recommended relaxing controls on so-called “grey” imports of second-hand cars, noting that Australian consumers are being fleeced, particularly when it comes to purchasing higher-end vehicles.

As reported by in the PC report, “a survey of prices for second hand Toyota Corollas found that vehicles of similar mileage were on average almost 20 per cent cheaper in New Zealand than in Australia”. Moreover, a 2005 study by researchers at the Monash University Accident Research Centre supported the safety efficacy of used imports, finding that “the used imports [into New Zealand] were as safe as those sold new when compared on a year of manufacture basis, and that the difference in crashworthiness performance between an average used imported vehicle and an average new vehicle was attributable to the date of manufacture of the used vehicle rather than its previous use in its country of origin”.

Nevertheless, that the Abbott Government is seeking to harmonise vehicle standards, as well as open up the market for near new cars (less that 12 months old and with less than 4,000 kilometres on the clock) is to its credit, and a big step in the right direction.

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  1. Here’s what happens! The local car importers will throw a fit and refuse to service cars not initially sold by one of their lot. That works, until…a whole industry of well qualified, well provisioned secondary car maintainers springs up and starves the local car importers of their most lucrative asset – the right to ‘exclusively’ service your new car! It used to be a standing joke here that the first $350 of any service of , say, a Mercedes was them writing down your phone number on the service docket. No longer. A deregulated market eventually offers up choice.

  2. Less than a year old an 4000km. This seems too lax. Someone might actually get a car imported If you allow that.

    Should be less than a fortnight old and less than 12km.

  3. It is true NZ consumers have benefitted greatly-but bear in mind that annual “warrant of fitness” checks are mandatory there and this prevents dangerous vehicles being on the road. Open slather for Australia raises a safety issue.

    • drsmithyMEMBER

      Open slather for Australia raises a safety issue.

      Who is asking for “open slather” ?

      There is a vast gulf between essentially buying a new car overseas and importing it (pretty much all these changes allow), and importing any car you can find.

      The average vehicle age in Australia is ten years and <150,000km travelled. It seems absurd any grey import restriction would be less than that.

      There seems to be this ridiculous being peddled that ADRs mean vehicles sold in Australia are “safer” than those in other countries. It doesn’t even pass the laugh test.

      • I have to agree.
        A few years ago I imported a Caterham (Lotus) Seven into Australia. It had done less than 6000km and was in immaculate condition. I had to hire an engineer to argue sense into the so-called vehicle testing centre in Adelaide. Among their more ludicrous pronouncements was:
        1) “The sump is too low. If the car were to lose both front tires simultaneously (entirely from the rims) while travelling at speed the sump would hit the ground….” Quite apart from the fatuous idiocy of such a presumption, I triangulated it myself and worked out that the sump would still be 1.5cm above the road while I was cruising along on both front rims.
        2) “There is a polished aluminium surface between the windscreen and the dashboard. This needs to be painted in a matte colour as it could otherwise cause the driver to be blinded by reflected sunlight.” A retarded gibbon could see at a glance that the surface was horizontal and thus, considering the depth of the seating, in a position that no possible angle of the sun could cause surface reflection to dazzle the driver
        There’s a well known story about these same guys not passing a new Mercedes a few years before because it had a dual braking system which wasn’t part of Australian Design Standards at the time (probably still enforcing cable brakes). This decision was only reversed when the ambassador whose car it was complained to Canberra.
        I have an old friend who lives in Italy. Even he is in awe of the fantastic levels of Australian bureaucracy.
        [email protected]@kwits

      • I had a work colleague buy a second hand Prado from a dealer. After noticing some very bad steering vibration on the hwy he went to get the alignment check. The mechanic told him he couldn’t re-align the front wheel properly as the chassis had been bent out of shape by about 2 mm by the previous owner.

        It took him 6 months to get his money back from the dealer, he had to get engineers reports, quotes from Toyota for a new chassis, multiple trips to mechanics, to prove that the car was un-roadworthy at point of sale. Finally it took the consumer protection involvement to get the dealer to own up.

        So apparently Australian Dealers selling second hand cars are better then grey imports. Pure BS

        @ Rob Barratt – Australian Standards are some of the worst conceived and corporate biased standards out there. Most have direct contradiction to international standards or are 20 years out of date. AS are a joke.

    • Terry, annual inspections depend upon which state you live in in Aus. NSW & NT have annual inspections for anything over 5yrs old NSW, 3yrs in NT. Unfortunately the other states are far more lax, and generally only require an inspection upon sale of the vehicle.

      So not really open slather, but could be improved.

  4. Janet notes the effect of opening the market on the service industry. I wonder whether these effects are felt right down the chain; if you can buy a decent imported second hand car for not much then, if you’ve got an old car that’s starting to die, you wouldn’t bother keeping it on the road, you’d just dump it. Hopefully it woudl drive down repair costs throughout the sector.

  5. Car dealerships are so ridiculous in the first place. I should be able to buy a car directly from the manufacturer and cut out that slice taken by some podgy, lazy charlatan. Same goes for imports; why am I protecting their non-jobs in the first place? They’re leeches, just like RE agents that outgrew the purpose of being able to find clients suitable homes.

    Both non-jobs, and they’ll both go when society realises they’re as outdated as motels and taxis and there’s superior, cheaper alternatives.

    • They want to knock down “auto alley” in Parramatta and build high rises, apparently the internet is the reason

  6. There are a few dealers in Sydney that specialise in used Japanese performance imports. I can’t think of a reason they should be a protected species.

    The people that should be panicking are the bike dealers. Riders have been getting gouged for years. Bikes are relatively cheap to import and the overseas market is far larger due to no right hand drive requirements.

  7. Australia’s automobile regulations are a disgrace matter of fact IMHO they’re profoundly immoral in the way that they deny young Aussies opportunity, the grey import regulations are but one in a LONG series of absolutely stupid regulations that have no legitimate purpose. The new “statutory write-off” rules are absolutely disgraceful, they do knothing exept push an extra 10K units volume into the rigged new car market.

    • There are many factors, not just automobiles, that are a disgrace and deny young people opportunity.

      Seems to be the way this country operates.

      • RP that’s the truth, but I still cant get over how pervasive these stupid rules created to enhance the value of vested interests are. WHY are young Aussie’s accepting this BS? It’s morally wrong, in my world view there is no greater moral wrong then to deny an individual the fruits of their labor. or in this case to construct a system that guarantees their labor will have zero economic value. it’s wrong wrong wrong!

      • Seems to be the way this country operates

        One word describes Australia governance: sclerotic 😯

        (meaning: characterized by a debilitating lack of progress or innovation within an institution or organization)

    • In case anyone was wondering what I’m talking about
      Notice that as of Jan 2011 ALL economic write-offs are now classified as statutory write-offs so they can never be repaired and re-registered. Makes some sense for newer cars but once any 5 year old car sustains any minor panel damage it can no longer be repaired and re-registered just because the cost to repair was considered un-economic by the insurance company.
      This law effectively denies an individual the economic value they can create with their own skill and sweat. If it was truly intended to simply eliminate “shoddy back-yard repairs” then there would have been easy exceptions like needing to own the car for a certain time after the repair (say 1 year)
      I cant believe that young Australians are accepting the passage of laws like this one, it’s @#$ing disgraceful.

  8. truthisfashionable

    A Toyota Crown Athlete from Japan or a Ford Focus St Estate from the UK, that’s a choice i’d be happy to have.

    There are many cars that would never be imported here by the existing setup, but they are based on other cars already here. The Toyota above is a Lexus GS and the Focus ST is a Focus ST. The service debate is just ridiculous for most vehicles that people would consider.

    The biggest issue would be buying from Japan and not being able to use the SatNav, etc due to its Japanese language. However, many smart people have figured out how to upgrade or retrofit English equivalents in the current grey imported Nissan cars.

  9. So let me get this straight. I buy a new car from Japan, import it and drive 20,000 kms. I can then sell that car in the market. However I am prohibited from buying that same car because it travelled 20,000 kms on Japanese roads. Apart from the realpolitic, what am I missing?

    • You can always take a taxi, hired at great expense due to the similarly rigged licensing system where it costs many times as much to acquire a license as it would in any other country.

  10. “ anyone could realistically purchase any new car from any marketplace without realising the full upfront costs of purchasing and importing; not to mention the ongoing service costs of the vehicle,” Mr Unerkov said

    Oh stop it. Like the service fees are a major selling point when a dealer is trying to “get you into this today”.
    These crooks are a protected species. Those mega triple floored air conditioned boxes used as sales centres don’t pay for themselves.
    Just another ‘Australia Tax”

  11. If Australian labour has to compete globally, then why doesn’t Australian capital have to compete globally as well?

    • People who rely on selling their labour as a means for prosperity are generally not elite. In fact we’ve sold the message since we unwound Keynesian policies in the 1970’s that selling one labour will not see you prosper, that only speculation in assets (capital) will see you prosper.

      Those that have prospered have now captured our governance and regulatory bodies to ensure they don’t have to compete, they workers underwrite their, and their kids, prosperity.

      In other words, for a few with the birthright, live a life of luxury but not work for a living, a.k.a the reason the liberal party exists

  12. Gotta protect those job creating middle men businesses. They’re lifters, not leaners, don’t you know.

    I’ve gotta be honest, if Oz doesn’t reset within the next few years, I’m giving up on the place. Its medium to long term future is looking increasingly like some South American tinpot nation.

    • Sadly, you are right. My kids, thriving overseas, are reluctant to return here, and I see their POV. We need one helluva shakeup here, in so many ways. 😡

      • I’ve gotta say, as much as I’m a horrible jerk when talking about Australia in the last few years, I really wish I wasn’t. It’s just very upsetting seeing my home turning into such a farce. I’m Australian, as is my wife, and two of my kids, and my wife’s and my parents, and their parents, and their parents, (and so on until we run out of records in the 1860s). And we’re now facing the prospect that we might never go back, because in the last decade, half of the country seems to have gone batshit bonkers insane. Sure, there are still a lot of decent people, but on the whole, the situation is crazy. It’s ridiculously unaffordable. There are no opportunities for anyone who seeks education. It’s a rent seekers paradise. The whole country seems to be going crazy about a frankly negligable percentage of muslims and asylum seekers, while running a 400k per annum immigration programme. No matter how I look at it, going back to Australia with my family right now looks like a bad decision. Since about 2007, our life in Australia didn’t go as well as we would like; not from a family perspective, but from an employment and opportunity perspective. Since we took the big risk and moved to the US when I lost my job, things have gone from strength to strength.

        I want Australia to improve. I really do. Yet Australians are collectively becoming stupider and stupider. And I’m not just saying that as some kind of jaded youth; I have 3 kids and moved across the world with 2 of them. Australia is becoming a country that I don’t want them to grow up in. There simply aren’t opportunities for them there, and the culture has become scarily insular; people I respected in Oz are now freaking out about the ‘muslim threat’ and such rubbish. It’s really really disturbing.

      • @LD I hear waht you’re saying.
        I returned to Australia and to put it bluntly got pissed on, I saw the error in my ways and left returning to the US, suddenly doors start opening and opportunities appearing, the US for all its faults is still to this day the land of opportunity, I SO hope that Australia can find its way out of this rent seeking behavior but I suspect it’ll take a very deep recession with serious unemployment before this silliness comes to an end. Unfortunately it’s probably too late for me to return (life has a way of moving on) this pains me because I also can trace my Aussie roots back to the 1830’s. I wish I could help but I know I cant.

      • LD
        + me
        I immigrated to Aus in 1991. Loved the climate and the opportunities for a person with education and IT skills. Now? Like LD I feel guilty about trashing the place. But, with the honorable exception of Australia’s farmers, it’s a shit tank.
        Tonight I hear via the ABC that the tax payer is now being asked to spend 20K$ per head to sew up the stomachs of 60% of the (obese) population who can’t modify their McDork’s hamburger habit. If ever a nation could be said to have squandered it’s “lucky” status, it’s these burkes……..

    • If you’re worried about that, then never ever go to Port Augusta (where I grew up). Have you seen the stuff that comes out of the stacks of the coal fired power stations?

      I’ll bet you are exposed to way more radiation living in Port Augusta for a year than you would be buying a used Nissan from Fukashima and driving it for a decade. It’s not like cars take up radiation and store it; at worst, radioactive particles will sit on the paintwork and then blow off.

      By the way, I live in the San Francisco Bay Area. There are US Navy ships that were used as test targets in the late 40s for atomic tests, sunk just offshore. THOSE things are radioactive. Not cars from Japan.

      • I lived in the SF area too, for years: Walnut Creek, Moraga, The Presidio. Great years. But we had to retire here to Oz, despite the craziness you correctly outline above…

    • As much as he or she was rubbished for it, the commenter that noted that there was no figure given for the level of radioactivity, let alone a comparison to a rational benchmark such as background radiation or WHO guidelines is on the money. It is just not possible to figure out whether the cars concerned actually are radioactive, or whether, for example, someone just wants to find a pretext for not paying for a shipment they have couldn’t find buyers for.