By Leith van Onselen

Yesterday I slammed the Abbott Government over a statement made by Industry Minister, Ian MacFarlane, which suggested that the Abbott Government would maintain unnecessary restrictions on importing high quality used vehicles once local car assembly manufacturing shutter in 2017:

“…the government has no intention of allowing Australia to become the dumping ground for other countries’ old second-hand vehicles.”

It appears the Coalition has modified its position somewhat, flagging that it would loosen restrictions on importing new cars along with harmonising Australian-specific design standards, according to The Australian:

In a move expected to provoke a strong backlash from traditional car dealerships, people would be free to purchase new cars online from overseas dealers, as long as vehicles complied with inter­national standards… Allowing consumers to import new cars would be coupled with the abolition of Australian-­specific design rules for the sector, with the country instead shifting to UN standards in an attempt to reduce red tape and compliance costs. In an options discussion paper to be released today, and obtained by The Australian, the government says a review of the 25-year-old Motor Vehicle Standards Act is needed to keep pace with changes to the global automotive sector, including the end of Australian car manufacturing in 2017… Imported vehicles would have to comply with accepted UN safety standards, and would be from right-hand-drive markets, including Britain, Japan, Indonesia, Thailand and India.

However, the Coalition intends to maintain the draconian restrictions on importing used cars:

Assistant Infrastructure Minister Jamie Briggs said last night the Coalition was against the idea [of allowing the importation of used vehicle], affirming remarks by ­Industry Minister Ian Macfarlane last week… Mr Briggs said the government had been convinced by the “horrific” New Zealand experience that the easing of restrictions should not extend to used cars.

While relaxing import restrictions on new cars and harmonising design rules are positive steps for consumers, the Government’s claim that New Zealand’s experience importing used cars has been “horrific” does not pass the laugh test, and flies in the face of the Productivity Commission’s (PC) report into the car industry, released last week.

In it, the PC revealed that New Zealand had gained from opening its market to high quality Japanese used cars, lowering costs for consumers without compromising the safety of its vehicle fleet.

Specifically, the PC found that “prices for second hand Toyota Corollas… of similar mileage were on average almost 20 per cent cheaper in New Zealand than in Australia”. It also quoted a 2005 study by researchers at the Monash University Accident Research Centre, which found 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”.

How exactly does this equate to an “horrific experience” for New Zealand consumers?

Clearly, in continuing to oppose second hand car imports, while lying about their impact in New Zealand, the Coalition has chosen to side with the automotive industry rent-seekers over consumers, who will continue to be fleeced, albeit less than before given the other proposed reforms.

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