Australian Motoring Enthusiast Party senator, Ricky Muir, has turned-up the heat on the Turnbull Government to relax restrictions precluding used (“grey”) car imports into Australia, claiming that the Government is favouring car industry rent-seekers over the interests of ordinary Australian motorists. From The AFR:
Tony Weber, chief executive of Federal Chamber of Automotive Industries (FCAI), said on Monday there had been instances in New Zealand where used car imports were linked to the Japanese mafia, the Yakuza, and instances where radioactive cars from the Fukushima nuclear disaster found their way to Russia…
Mr Muir said the claims that deregulating the used car market could risk Japanese mafia-sourced (Yakuza) or radioactive Japanese cars being imported were “outrageous”.
“I would be very comfortable to laugh excessively loudly. I’m sure if there are issues with Yakuza the Japanese police can take care of it,” Senator Muir told The Australian Financial Review…
Senator Muir said the government’s decision to keep the $12,000 tariff and restrictions on second-hand car imports seemed to reflect the views of “a certain lobby group”.
“It would seem that somebody’s lobbied the government very hard …
Senator Muir has received strong support from the Australian Imported Motor Vehicle Industry Association, whose chief executive, David Vinsen, labelled the FCAI’s claims as “scaremongering”:
“These claims are preposterous, outrageous even, and should be seen for what they are: blatant scare-mongering by the representatives of the foreign-owned vehicle manufacturers who want to maintain their monopoly control on the supply of vehicles into the Australian market,” Mr Vinsen said.
And they follow the $14 billion automotive after-market and parts industry’s call on Monday to deregulate used imports:
Stuart Charity, the executive director of the Australian Automotive Aftermarket Association, which represents 2000 businesses employing 40,000 people across automotive parts retailing, component supply and mechanical repairs, says competition is being restricted and prices are being kept artificially high.
“Certainly we’re in favour of relaxing restrictions”… “We believe there should be deregulation of the industry. If a vehicle is relatively new, say three to five years, there’s no reason why it shouldn’t be able to be imported provided it complies with all the safety features and emission criteria”…
As noted yesterday, the Government last month rejected the Harper Competition Review’s recommendation that parallel import restrictions on second hand cars be removed, noting that “the Government has decided not to proceed with reducing parallel import restrictions on second hand cars at this time”.
This rejection comes on top of the Productivity Commission (PC) last year also recommending removing restrictions on grey car imports:
The Commission expects that, in the long term, the progressive relaxation of restrictions on the wide scale importation of second hand passenger and light commercial vehicles would have net benefits for the community as a whole. Provided relaxing the import restrictions were undertaken within an appropriate regulatory standards and compliance framework, net benefits would arise through lower prices and/or improved product specification (vehicle features) as well as increased product choice and availability for vehicle buyers, including consumers, businesses and government fleet buyers…
If the policy change were designed to favour the increased supply of late model used vehicles, it could result in lower average vehicle fleet age and improved average vehicle fleet safety and emissions standards. In the Commission’s view, the relaxation of second hand vehicle import restrictions should begin with vehicles under five years old (since the date of manufacture). The Commission considers that these relatively newer second hand vehicles would be the least likely to pose the safety, environmental and consumer protection concerns raised by some participants… The Commission also considers that second hand vehicle imports should be limited to source countries where vehicle design standards are consistent with those recognised by Australia.
The PC also noted that “vehicles of similar mileage were on average almost 20 per cent cheaper in New Zealand than in Australia”, and that there was no dilution of safety standards under the New Zealand regime.
Once the local car assembly industry closes in 2017, the rationale for restricting used car imports will disappear. The Government should, therefore, follow New Zealand’s lead and allow grey imports, thus increasing consumers’ spending power and potentially lowering the average age of Australia’s vehicle fleet.
There is no good reason for the Government to side with the automotive industry rent-seekers to the detriment of Australian consumers.
