Federal government to announce legal restrictions will be removed to help push prices down but minister expects quantity of imports to be ‘modest’

This article is more than 4 years old

This article is more than 4 years old

Australians will be able to bypass local car dealerships and directly import cheaper new and almost-new cars from Japan and the UK under changes to be announced by the federal government on Wednesday.

Legal restrictions will be removed to allow drivers to buy a new car once every two years, providing it is no more than 12 months old and has no more than 500km on the odometer.

The changes will apply from 2018, when local car manufacturing is scheduled to end, and according to the Australian Automotive Association, will push prices down.

The major projects minister, Paul Fletcher, said the government expected about 30,000 Australians to make use of the provisions and personally import new cars.

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“It is true car dealers are not enthusiastic about this change, but we expect the quantity of imports to be modest,” he said. “Most Australians will continue to purchase cars directly imported by manufacturers and sold through their existing dealership network.”

The AAA chief executive, Michael Bradley, said the decision was “a big win for consumers and a decision that will open up choice and increase competition within the Australian car market”.

“It will also produce environmental and safety benefits because it will encourage faster renewal of Australia’s vehicle fleet,” he said. “Australia’s private car fleet has an average age of 10 years, which is quite old by global standards and the fact that Australians often pay over the odds for new cars plays no small part in this.”

The government will also change the rules for importing used classic and collectible cars to allow them to be brought into Australia if they are at least 25 years old or are on a register of specialist and enthusiast vehicles. It was also remove a $12,000 duty on these imported used cars.

And new imported cars will no longer have to affix an identification plate, but rather be registered on a searchable online database, something Fletcher says will save the industry more than $70m a year.

For now cars will be able to be imported from Japan and the UK because they are right-hand-drive countries judged to have similar safety standards.

Labor has previously raised concerns about the idea and car dealers have warned that consumers would not have the same after sales service.

Both the Productivity Commission and Harper Competition Policy Review recommended also relaxing the restrictions on used car imports, but after a long consultation period, the government has not taken that advice.

A survey in an October 2014 submission by AAA on the issue found popular car makes up to 20% cheaper in Japan, but more expensive in the UK.