Transcript of Interview: 3AW Mornings with Neil Mitchell
04 September 2014
Neil Mitchell: Now last week—thanks Paul—last week we were talking about buying second-hand cars direct from overseas and whether that could in fact improve the safety in the fleet in Australia. There's now a proposal to relax restrictions—that came from the Productivity Commission, as I recall—a proposal to relax restrictions on foreign imports so you could buy a car, a new car, direct from overseas. On the line, the Assistant Minister for Infrastructure and Regional Development: Mr Jamie Briggs, good morning.
Jamie Briggs: Good morning, Neil.
Neil Mitchell: So how would it work? I want to buy a new car overseas, what would I do?
Jamie Briggs: Well, what we're doing is undertaking a review of the Motor Vehicle Standards Act, which hasn't been reviewed for 14 years and as you know very well, the nature of the car industry has changed quite substantially in that 14 years. As part of the review, we're asking the question: as Australia moves to having, in effect, global standards for safety, should there be any impediment on people, after manufacturing ends in Australia, purchasing new vehicles from overseas which meet the global standards; so in effect, meet our standards?
Neil Mitchell: So how would it work? If I decide, right, I want to buy a new Audi from Germany, what do I do?
Jamie Briggs: Well, you would go online or you would contact an appropriate merchant, if you like, and make the purchase. You would then have to meet the safety check obligations which would be part of that to ensure that it does meet our standards, or meets the standards that are part of the Act. And then you would import. And if that is a decision that you've made because you believe you can get it cheaper—and there is an argument that, particularly at the higher end, vehicles are cheaper overseas—then that is something that you would be able to do.
Neil Mitchell: Some people argue to me they're cheaper overseas, even allowing for these shipping costs.
Jamie Briggs: Indeed, particularly at the higher end. There is quite a lot of price competition at the higher volume, if you like—your Toyota Camry's or your Mazda 6s or what have you, but when it comes to the more expensive luxury cars, there seems to be a price differential in that. This discussion paper, I hope, will play that out. So rather than just have this ‘people say’ type discussion, we might get some evidence about it.
Neil Mitchell: Okay. So what we're saying is most of these cars probably match the Australian standards anyway?
Jamie Briggs: Exactly. Well, what's happened, obviously in the last couple of decades, is we've moved away from having specific Australian standards for vehicles when we produce most of the vehicles we drove in Australia, to a point now where we import about 85 per cent of our new vehicles and obviously in a couple of years' time we'll import 100 per cent of our new vehicles. The standards have moved in that way. They've moved along the path of ensuring that we've got global standards, because that's where we're buying our vehicles from. That is only going to increase, obviously.
Neil Mitchell: Of course you'd still have to convert cars to left-hand—from left-hand drive, wouldn't you?
Jamie Briggs: Well, there are some countries which have right-hand drive, of course.
Neil Mitchell: Yeah.
Jamie Briggs: So, that is a good point, but again, the question—and I guess this is part of the Abbott Government's attack on red tape, if you like—is if there's no need for the regulation, why have it? And that is, in a sense, what the review is all about.
Neil Mitchell: Okay. What about the tax on imported cars?
Jamie Briggs: That's a very good question and again, that would have to be something that the Government would consider, it would be issues that would be raised, in respect, particularly of the luxury car tax.
Neil Mitchell: But what if you've got a vehicle under the luxury car tax threshold that you're importing, what import tax do you pay on it?
Jamie Briggs: Well, I imagine you would need to meet the same obligations as you would meet if you purchased the car in Australia.
Neil Mitchell: Oh, I thought there was an import tax which was trying to protect the local industry?
Jamie Briggs: Well no that is—the import tariff has largely been abolished. With most of the free trade deals that we've done, with Japan and Korea, for instance, that has been abolished.
Neil Mitchell: So what's the luxury car tax? How much?
Jamie Briggs: The luxury car tax is quite substantial. From memory, is takes in about $500 million a year. So that would be an issue that the Government, and particularly the Treasurer, would have to consider as part of this and whether there would indeed be a question of whether you would be able to apply the luxury car tax if you did purchase from overseas.
Neil Mitchell: Okay, that could change things. Do you agree it would be a good thing to get people driving better quality cars on the roads of Australia because it would be safer?
Jamie Briggs: Absolutely.
Neil Mitchell: A policeman once said to me, you put every person in a Mercedes Benz, you'll cut the road toll.
Jamie Briggs: The newer vehicles, the safety outcome is by far better than older vehicles and this is one of the reasons that we're very unlikely to go down the path of second-hand imports. The experience in New Zealand was that it made the car fleet older and so when we started talking about this review, I was not inclined to go down the path of looking at second-hand imports. I must say, the evidence that we've seen from the experience in New Zealand has been that you get a worse safety outcome, you get an older fleet of vehicles and you actually add quite a bit of red tape because you would have to have a compliance regime as you imported them.
Neil Mitchell: Okay. If this was to happen, would it apply to trucks as well? And Suva and everything?
Jamie Briggs: Well, trucks are a slightly different story and we are very conscious with trucks about ensuring we have the highest possible safety standards, because obviously, events with trucks can be catastrophic when it goes wrong. Again, newer trucks are far safer. So the more we can get newer trucks on our roads and increase the—decrease the age of the fleet, if you like, the better the safety outcomes will be.
Neil Mitchell: Okay. Well, that tax question is the key one, isn't it? The luxury car tax?
Jamie Briggs: I think it will be a big part of the discussion, absolutely and you know I would encourage you to lobby the Treasurer when you have him on next, to have a look at that.
Neil Mitchell: Have you ever known a government to remove a tax that's bringing in so much money?
Jamie Briggs: Well, we've removed a couple, we've removed the carbon tax, as you know, a few weeks ago, we removed the mining tax this week, which I grant, wasn't bringing in much money, but was proposed to bring in a lot of money, Neil.
Neil Mitchell: Thank you very much. Jamie Briggs, the Assistant Minister for Infrastructure and Regional Development.