Transcript - Media conference, Melbourne

CATHERINE KING: Hi, I'm Catherine King. I'm the Federal Minister for Transport, and it's great to be here at the Port of Melbourne, joined by my good friend and colleague Chris Bowen, obviously the Minister for Climate Change and Energy. Well, behind us here, you can see some of the almost a million new vehicles that are sold in Australia every year. But here in Australia, because we do not have an efficiency standard, these are not the most efficient vehicles that we could possibly be getting. We know that of advanced economies, it's only Australia and Russia that do not have an efficiency standard. So, today the Albanese government is releasing the impact analysis for our preferred model for an efficiency standard here in Australia. Now, this is good news for consumers, because what this means is that we can ensure that when we have an efficiency standard in place, and Australia will be getting, whether it's diesel, whether it's combustion engine, whether it's hybrid or whether it's electric vehicles, that we are getting into the Australian market, the most efficient vehicle.

This is about all cars, making sure that we get significant savings for Australian consumers. We already know that our vehicles that are sold, the new vehicles that are sold here in Australia, are 40 per cent less efficient than those vehicles in the European Union and 20 per cent less efficient than the US. The US has had efficiency standards since the 1970s. It is time that Australia had the same, because there are significant fuel savings, significant savings for Australian consumers. That's what this is about. It's a good cost of living measure for Australian consumers, making sure we have choice of vehicles. We have efficient vehicles here in this country, and that Australian consumers have the opportunity to have the fuel savings that will come from efficiency standards. Now that release today, the impact analysis, will have the government's preferred position. We're consulting with industry, with consumers over the next four weeks with the view to legislation in the first half of this year. I'll hand over to Chris.

CHRIS BOWEN: Well, thanks very much, Catherine. I think a lot of Australians looking at these cars behind us might not have perhaps realised that Australia, as Catherine said, is one of the very few countries in the world that doesn't require car manufacturers to send us efficient cars, fuel efficient cars, the best cars available. That means Australians are paying more than they need to for petrol. It means that Australians are paying more at the bowser than they should compared to people in other countries because they're using more petrol and diesel. Governments for years have talked about fixing this. It's time that a government actually fixed it. And that's what Catherine and I are announcing today on behalf of the Albanese Government. 85 per cent of cars sold around the world are sold under fuel efficiency standards and it's way beyond time that Australia catches up. The New Vehicle Efficiency Standard is simply this: requiring car manufacturers to meet certain standards on grams per kilometre of fuel used. They can do that across their fleet and we will require them to improve gradually, but clearly, over time, the quality of vehicles they send to Australia when it comes to fuel efficiency. So, this is a win-win-win. This is a win for motorists. It's about more choice, it's about wider ranges of choice, requiring motoring companies, manufacturers to send wider choices to Australian motorists. It's partly about electric vehicles and hybrids. For example, in United States and even New Zealand, you can get more than 150 models of EV or plug in hybrids. In Australia, less than 100. There are certain models that are available as hybrids, like the Ford Focus overseas, but not available as hybrids in Australia. But it's about so much more than that. Again, a lot of people might not realise that even with petrol vehicles, there's a big range of efficiency within models. Take the Mazda CX 30. The model available in the United Kingdom is 25 per cent more fuel efficient than the model available in Australia. Now, why should Australians be using 25 per cent more petrol than they need to. So, this is a win for cost of living, a win for consumers, it's a win for the environment. Obviously, a more fuel efficient vehicle is better for the climate, and our preferred model delivers 100 million tonnes less carbon in the air by 2035. That's also a win for health, because obviously, again, less particulates, less emissions in the air is good for those Australians dealing with respiratory health issues. So, it's a win-win.

Now, this has been tried before, as I said, and let me predict a few scare campaigns. Let me tell you what this is not. This is not a requirement on car manufacturers not to send any particular brand or model to Australia. All the cars you see behind us, they can still send. They have to meet an average across their fleet. It's not a restriction on what Australians can buy. You can still buy a ute, an SUV, whatever you like. And indeed, in those countries with fuel efficiency standards, New Vehicle Efficiency Standards, like the United States and New Zealand pickup trucks, utes are very popular and often the highest selling model. This is pro regional and pro out of suburban. People in the regions and the suburbs drive long distances often, and obviously, the more you drive, the more fuel you use, the more fuel efficient your car is, the more you save. So, this is pro the regions and pro the outer suburbs. So, this is an important announcement. There's been twelve months of collaboration, consultation, research behind this announcement today. I want to thank Catherine for her leadership in helping bring this together. Catherine has driven this process in a way which shows her commitment to making sure that the transport sector, which is on track to become our largest diminishing sector, absent action. We don't want to see that happen. We're taking action and we want to deliver better choices for Australian motorists right across the country. So, for more details, cleanercars.gov.au our preferred model is up there and we look forward to progressing this over the next month and to legislating it through the parliament.

JOURNALIST: Minister, in practice, I'll go to you first, Chris. How is this going to stop Australia becoming a dumping ground for dirty, polluting vehicles? Is there going to be significant penalties for manufacturers who don't meet the conditions that you set out?

CHRIS BOWEN: Yeah, so as I said, it's a requirement on car manufacturers to improve the quality of the efficiency of the fleet they send to Australia. On average they'll have to pay $100 a gram they go over that. But we expect, as is the case right around the world, companies to comply with the law. That's what they do. They don't like the bad press that comes with not meeting their fuel efficiency standards. So, that's the way system works in all the comparable countries and we would expect companies to comply and send their most efficient vehicles as we require them to.

JOURNALIST: When do you expect these standards to be in place?

CHRIS BOWEN: 1 January 2025.

JOURNALIST: So, why has it taken so long to get to this point when most of the world already has these?

CHRIS BOWEN: Well, that's a good question in relation to the last decade. Josh Frydenberg tried. I think it lasted a morning before the hard right in the Liberal Party room vetoed his action. Paul Fetcher, as a junior Minister of the Infrastructure portfolio, talked about how good efficiency standards would be, but they couldn't deliver. They couldn't deliver. What we've done is take twelve months to very carefully work - it's a very complicated and complex policy area. Very carefully work through. We had many hundreds of submissions to our discussion paper. Work through the implications. We have to ensure availability of models, we have to ensure the right balance, we have to ensure a lead time. That's what we've done and that's what we're announcing today.

JOURNALIST: But now you're talking about another twelve months, so that's two years since you even started the process.

CHRIS BOWEN: Well, 1 January 2025 is an appropriate timeline for a big change, which, to be fair, the car manufacturers need to make adjustments to get ready to comply with. I mean, you can't just change the law on a Sunday and say you're going to comply on Monday. We've got to get it through the parliament, legislation through both houses of parliament, that will take it and set up a regulator. Catherine's department will be setting up a regulator. That takes time, I think, 1 January 2025, which is largely in keeping with the suggested timeline and the submissions to us.

JOURNALIST: The top ten cars sold last year, all, as I understand it, utes, SUVs. Is this policy going to change that?

CHRIS BOWEN: No. As I said, in countries with vehicle efficiency standards, utes and SUVs are often the top selling car. That's up to Australians, but we'd like to see Australians have more choices within that. I mean, you can buy a Tesla Y now, you can buy other SUVs. We want to see more choices for Australians as to the range of SUVs and larger cars that they get access to as well.

CATHERINE KING: And I've had the great opportunity - I was over in Detroit earlier last year. I drove the Ford 150. It's an electric ute. It's an unbelievable vehicle, it would be great for regional Australia. I've been out on the Ford proving grounds. We've got the hybrid Ranger that's coming on track. That's one of the biggest selling utes in Australia. That's coming on track 2025. Again, it's a great vehicle for this market. We want to see more of that. I want to see more choice for regional Australians, people like me who live in regional Australia, to be able to get affordable, fuel efficient vehicles, because we have got the opportunity in regional Australia to make really substantial savings on the amount of money we spend on fuel. So, we want to see those utes, we want to see those hybrid vehicles, we want to see more efficient combustion engine vehicles here in Australia, because it actually means for consumers, you're not paying as much for petrol. And that's really for me, as a regional Australian, what's really critical about this. Obviously, I've got the transport portfolio. Chris is looking after energy and climate change. We want all consumers to benefit from this, including seeing those utes come to market. But they are great vehicles and you'll start seeing them on our roads, the ranger, you'll start seeing that on our roads from 2025.

JOURNALIST: And how have you addressed concerns from groups like the Farmers Federation, I believe, who've expressed some concerns about how regional rural areas will adapt to this? Are they going to have enough time, if there's really 12 months before this kicks in?

CATHERINE KING: Yeah, well, of course, the standard will ratchet up, obviously, to make sure that we're in line with the US by 2028, but the standard mechanisms will start in 2025. What I would say for both the Farmers Federation and for regional Australians, like I already know, regional Australians, we spend more time in our cars. We're driving long distances in our cars, making sure we have the most efficient vehicles so we are not paying at the petrol bowser is really important because we are spending a lot of money at the bowser, as we have no choice in terms of the distances that we drive. Also, on average, regional Australians have more vehicles per capita because of that, because you often have to have two car families, often three car families as well, to get around, again, that fuel efficiency, being able to spend less at the petrol bowser is really important. This isn't about one type of vehicle, it is about all vehicles, making sure that all vehicles that we get in Australia are as efficient as possible. And that includes, for regional Australians, really significant savings.

JOURNALIST: What about the prices of actual cars? What impact will this have?

CATHERINE KING: Yeah, none. So, if you look at the impact analysis, it's gone and done both the modelling, but also looked at the work internationally and what the impact of - you know, we've got a lot of the bad thing about Australia not having efficiency standards is that we don't have the most efficient vehicles being here in Australia. But the good thing is that there has been years and years of actual real life experience in countries all around the world. And so the international evidence is that it does not have an impact on price. I have no doubt we are going to hear all sorts of nonsense from the Opposition, from a range of other stakeholders about this. We're going to hear that utes are banned. That is not true. We're going to hear that somehow second hand vehicles affect it. That is not true. It is about new vehicles. We're going to hear about price. Again, not true. None of the evidence - there is just no evidence to say that it will affect price at all, SUVS or utes or any other vehicle.

JOURNALIST: Almost everybody concedes that we're late to this policy. What's the government going to do if Europe, for example, changes their emissions standards, which then leads us back to the situation where we're a dumping ground?

CATHERINE KING: Well, we absolutely. Let's get an efficiency standard in Australia. I mean, we are a long way behind, as you said, as Chris said, the previous government made an attempt, didn't get very far with that. Said how important they were. They knew they knew the significant savings that there were for consumers. Imagine if we had one now. That would have been millions and millions of dollars that drivers of average, middle Australia would have saved if we had one now. They didn't do it, we're going to do it. Let's get it in place. And obviously, then we've got to make sure that it's effective and we get the most efficient vehicles here in Australia, but let's get it in place.

JOURNALIST: You mentioned, Minister, the penalty for cars if they don't meet the requirement. Going by the current fleet the moment, what would be the impact of that regulatory fine?

CATHERINE KING: Well, I can say both. This is to extent, so something that's a characteristic approach. Basically what you're trying to incentivising through the credit system for manufacturers to send the most efficient vehicles here. And so it really provides that balance. So, credits and debits, that's how the system works. The real lived world experience is that car manufacturers want to avoid the debits, so they do everything they can to avoid the debits. And that's the good thing about an efficiency standard. It drives that change. So, that's really how it will work in practice. And all the details will be on cleanercars.com.

JOURNALIST: I'm sure you know them, though. I'm just trying to get a sense of how big your stick is so that they go for the carrot.​

CATHERINE KING: Well, we've done have a look at the model, have a look at the three options that the impact analysis says, and have a look at the modelling that we've done. Obviously, that has taken into account behaviour change, the way in which manufacturers will bring cars out to here. Have a look at the modelling and you'll see that's how we've calibrated it pretty carefully. In an ideal world, we don't want any penalties. Basically, we want the most efficient cars, more efficient cars, then that's really what this is driving.

CHRIS BOWEN: I have nothing to add to Catherine's answer. Anything else, guys?

CATHERINE KING: Beautiful.

CHRIS BOWEN: Thanks for coming out.