Keynote Address to the Australasian Fleet Management Association

Speech

JBS006/2015

14 April 2015

E&OE
Melbourne Convention and Exhibition Centre

Well, thank you so much. Thanks for the warm welcome and I'm sorry we're a little bit late; the Melbourne road network wins again. It took about an hour and ten minutes from the airport. If there's any other reason that we need to ensure that the East West project is actually built here in Melbourne, then travelling on the Melbourne road network in the morning should be the latest indicator. Not just stories in the front page of The Australian newspaper today about the investment risk the Andrews Government's put Victoria and Australia at with the French and the Spanish by ripping up the contract, but the actual need for the investment in infrastructure in Victoria.

Victoria is at risk of falling behind in a very significant way from the other states and particularly Sydney, with all the work that Mike Baird's doing on his infrastructure agenda. There is no ready to go major infrastructure project here in Melbourne other than the East West project. And we as the Federal Government, as part of a $50 billion road investment infrastructure investment programme last year in the Budget, want the East West Link built because it will improve Melbourne's productivity; it will improve the quality of the roads; it'll mean safer outcomes for motorists and a more productive Australia and that's why we continue to argue for it. Like we do all of our projects across the country which getting underway and improving the Australian infrastructure that we need for a stronger economy.

Of course, for those better roads we want the best possible vehicles and safest vehicles for Australians to drive. That's why we are having a look at the moment, and today's session is very timely given that the Cabinet will have a discussion later today about the Motor Vehicle Standards Act, which we've been reviewing.

As many of you know, last year we asked for submissions into the review to modernise the Act. It's 15 years since the last consideration was given to this piece of legislation, and the market in which it operates is of course now substantially different to what it was 15 years ago. It will be very different again in a very short period of time.

Last year there were about five million cars sold in Australia; one million of them were new and four million used. And of those new cars that were bought, only about eight per cent now are manufactured locally. By 2018 that figure will be all but zero. That is different of course from when the original Act was put in place when 75 per cent of vehicles or new vehicles on our roads were manufactured in Australia. So, there is a very different fleet and consumer behaviour today than what was the case when this Act was put in place and when this Act was last reviewed in 2000.

We need to modernise the Act and that means ensuring that we are harmonised with our global competitors where the cars are being made and we are buying vehicles from. So, we are looking at ensuring that Australian regulations, which are out of step with those global regulations, are harmonised as quickly as possible to reduce the red tape burden, and to ensure that consumers have got access as quickly as possible to the widest range of vehicles and the safest vehicles, because we know the younger that we can make our fleet, the better the safety outcome will be.

We don't intend, through this review and these changes, to make amendments to the Act which will impact on the safety outcome. Road safety is a very important part of what this Act is intended to do. You'd be right sitting there thinking to yourself, why is the Federal Government involved in this area? Why is this not just a state-based regulation, given that states register cars, they are the ones who enforce the regulations of our safety standards on vehicles?

There was a decision some years ago—back in 1989 when this Act was established—to ensure that there was a consistent national approach to vehicle standards so there weren't inconsistencies amongst states that used to exist in the Australian market. And that's why the Federal Government is involved, in particular because we import the vehicles we apply the Australian standards.

Increasingly those standards have become global standards as our car market has changed over the years to the extent now where we won't have a substantial manufacturing industry. So, we're looking through this review and the changes that we'll propose to the Act to make sure that we've got the lightest touch regulation that we need, but ensuring that we've got the safest standards that we can apply for consumers. 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. Of course, at the moment we have got a great amount of competitiveness, particularly at the small to medium level of vehicles.

Our dealerships across the country do a terrific job in providing Australians with access to high quality safe vehicles—new vehicles—through their dealership networks and through the major manufacturers. But we think there are some areas where we can make improvements, particularly at the higher end vehicles, to improve the competitiveness and improve the opportunity for Australians to get access to vehicles which are safe, are cheaper, and will improve the quality of cars on our roads. And so through this review and through the changes that we will propose, that is indeed the aim. We are asking ourselves, why are we regulating and what are we trying to achieve? And what we are trying to achieve is just that: the safest vehicles, the best quality vehicles, and the cheapest vehicles that Australians can access.

The question, of course, in relation to the capacity for importation will be raised and discussed as part of this review process, and there has already been quite a bit of attention given to that issue and in particular, in respect to personal importation of new vehicles and the importation of used vehicles, whether it be mass or personal. And we are looking at the issues in and around that, and we recognise that there are safety concerns in particular when it comes to the importation of used vehicles.

The experience in New Zealand has not been terrific, as far as the safety or the age of vehicles that you see. The age of the fleet in New Zealand has got older with the mass importation of used vehicles. That's not an outcome that we want to see in Australia. We

don't want to become the dumping ground of the world's lemons. We want a safer environment on our roads, and newer cars are safer cars. The technological advances we're seeing in vehicles are quite remarkable. The automated braking systems that are now starting to become part of vehicles are moving ahead at lightning speed, and so we want regulations which encourage the uptake of that and not discourage—or, not make it harder for people to get access to that type of technology.

So, we are looking very hard at the changes that we can make in and around what people can do for personal importation. At the moment, many of you would know we can import vehicles—used vehicles into Australia if you're willing to spend 12 months overseas with your car and then bring it back through the UK importation scheme. In fact, as the Minister, I can allow you on application to waive that 12 months. You could go overseas, buy a car tomorrow, ask for me to waive the requirement for 12 months and indeed, I can do it. Indeed, at the moment, officially my Department can do it. We recently had the experience where someone had been overseas for only a short period of time and had purchased a motorbike and had travelled around on that motorbike and the official who had been tasked in my department to give that approval did so.

I think that this debate at times has got a life of its own about personal importation. It actually exists at the moment and frankly, the rules are rubbery and inconsistently applied. So, I think what we want to get out of this is a much clearer system of how people, if they choose to, can access vehicles from overseas in what now is an extremely competitive vehicle market. But ensuring that they do that at the same time as keeping the safety standards that we expect in Australia to be upheld, and that is the task, the balance, that we will see through the review and the discussion that we'll have through the Cabinet process.

From here, from the discussion today, the Cabinet Regulatory Impact Statement will be publicly released in the coming months, and we will follow up the decision for all of you in the industry to participate in the discussion. And importantly, for consumers to participate in the discussion because they are often the forgotten voice in these discussions. Industries, organisations such as this, who get together and have got a key interest and of course always have a loud voice in these discussions—and you should—but we shouldn't forget that ultimately, it's consumers who we want to get into the newest, safest, and best cars possible and cheapest cars possible.

There will be a consultation period on the Regulatory Impact Statement before a final decision is made by the Government sometime later this year to change the rules. I would envisage that we will look to change rules in respect of the importation provisions somewhere around 2018 when manufacturing in Australia will have ended. We want a modern Act for what is a very different world than what it was when this Act was first put in place as far as how people access vehicles, what those vehicles are able to do, and the outcomes that we seek from the standards we want to apply. So, that's the intention of where we're going with the regulations in this area. It is a very different motoring world than what it once was, and as the Government, we are trying to put in place legislation which caters for the new landscape that we find ourselves in.

Thank you for listening to me this morning. I appreciate the fact that you've got a very full day of discussions, and I wish you well with those, and please stay in touch with the developments, as far as this area of regulation is concerned. Thanks so much.