Second Reading Speech: Road Vehicle Standards Bill 2018

An important responsibility of the Australian government is to set road vehicle standards. The objective is that road vehicles delivered or used in transport in Australia for the first time meet community expectations—for safety, for environmental protection and for other important issues such as anti-theft and energy conservation features. That is why we impose nationally consistent standards that road vehicles must meet prior to being used in transport in Australia—known as the Australian Design Rules.

In 2017, over 1.2 million vehicles entered the Australian market for the first time—including passenger vehicles; heavy, medium and light commercial vehicles; motorcycles; and trailers. The vast majority of these were new vehicles fully compliant with the Australian Design Rules. Used imported vehicles comprise less than two per cent of vehicles entering the Australian market for the first time.

For over 27 years the Motor Vehicle Standards Act 1989, and its regulatory instruments, such as the Australian Design Rules, have set out the regulatory framework governing the importation and first supply of road vehicles in Australia.

There are important reasons for regulating these issues rather than leaving it to the market. Firstly, consumers cannot generally observe key features of a vehicle until they are directly tested (such as in the event of a crash). Secondly, society as a whole derives benefit from imposing restrictions (for example, to minimise road trauma or pollution) that a consumer would not necessarily consider when purchasing an unregulated vehicle.

The existing motor vehicle standards legislation was written in a different time, when much of today's vehicle technology was not available. Since the act's last comprehensive review—over 17 years ago—there have been significant changes in global and domestic automobile markets, improvements in vehicle technologies and a general shift in consumer expectations and vehicle preferences.

In the second reading speech for the original Motor Vehicle Standards Act, the minister at that time noted that some 2,500 people were killed on our roads annually. At that time there were 9.4 million vehicles registered for use on Australian roads. By the end of this year, there will be almost 19 million vehicles registered for use on Australian roads—growing at around two per cent per annum—and our annual road toll has reduced to less than 1,300—although, of course, that still remains far too high.

Mandated safety standard improvements—such as seatbelts, anti-lock braking systems and electronic stability control—have helped drive this reduction in road deaths. Even so, the continued economic cost to the community of road trauma is estimated at around $27 billion per annum, quite apart from its terrible human impact.

Safety technology has greatly improved—with airbags, electronic stability control and anti-lock braking systems now commonplace. We have also seen advances in engine emissions control and new anti-theft technologies such as immobilisers. Our cars and trucks today are faster, safer, lighter, cleaner and harder to steal than ever before.

But the Motor Vehicle Standards Act 1989 has struggled to keep up with the changes in the marketplace. Amendments or administrative workarounds have been implemented to resolve market barrier problems, deal with new ways motor vehicles can reach the Australian market and meet changing consumer demands.

These isolated and incremental amendments to the legislation have contributed to complexity across the regulatory framework—making the act cumbersome to administer and difficult to interpret. In turn this imposes significant regulatory costs on businesses and consumers.

The future of motor vehicle transport is changing rapidly—and the way we regulate vehicles needs to allow for, and adapt to, this change. The Australian community expects vehicles that produce less harmful emissions and have greater fuel efficiency. We are seeing this already, in the global market and increasingly in the Australian market, through ever more fuel-efficient vehicles and also through the growing presence of electric vehicles and vehicles using other technologies, such as hydrogen.

We therefore need legislation which safeguards the safety, environmental performance and consumer protection features of the vehicles of today; but we also need legislation which can respond flexibly as motor vehicles evolve.

Today, the government is introducing the Road Vehicle Standards Bill 2018—and a legislative package to safeguard our community, protect the consumer whilst providing choice, and improve the competitiveness of our road transport sector.

There are four accompanying bills, designed to deliver an efficient transition from the current arrangements to the new regulatory framework, and to allow the Commonwealth to recover the cost of supporting and administering a robust and efficient regulatory framework.

The objectives of the Road Vehicle Standards Bill, set out in section 3, are:

• to set nationally consistent performance based standards for all road vehicles being provided in Australia; and
• to provide consumers in Australia with a choice of safe, environmentally sound and secure road vehicles that can utilise global technological advancements.

These objectives capture the government's intentions—to strike a balance between applying appropriate safety, environmental performance and security standards to vehicles entering the Australian market for the first time and providing as much consumer choice as possible.

The bill replaces the current Motor Vehicle Standards Act 1989 and provides the regulatory platform for national vehicle standards that strengthen and modernise the current legislative framework. It allows a risk-based approach to regulatory practice while simplifying the approval and importation pathways for vehicles and improving access to a diverse range of vehicles for specialist use and enthusiast interests.

The title of the bill—Road Vehicle Standards Bill 2018—reflects its coverage of all vehicles intended for use on our roads, which includes trailers and components used in approved road vehicles. The bill's coverage does not include motorised and other vehicles that are not intended for road use, such as tractors, quad bikes and on-site mining plant and equipment.

Principles

The design of the Road Vehicle Standards Bill 2018 and its related bills, rules and regulations was guided by five principles.

The first principle is to provide legislation which is flexible and responsive, given how fast the motor vehicle is already changing and how fast it is expected to continue to change.

For example, the bill allows for incorporation of different material into the national road vehicle standards—ensuring more novel standards may be referenced alongside the traditional sources of vehicle standards. Standards relating to cybersecurity in autonomous vehicle fleets would be one such example.

The second principle is clear legislation. This bill reflects modern legal drafting standards to strengthen the existing regulatory framework, whilst improving transparency and decision-making. It has a structure that clearly lays out the pathways, and the tools supporting those pathways, in a way that citizens can reasonably understand and utilise.

The third principle is more choice of road vehicles for Australians. Australians continue to require some vehicles that are unable to meet the full complement of national standards. These vehicles may have enthusiast features, such as being rare, high performance, low emission or having accessibility features; or they may be designed to perform particular specialised jobs that fully compliant vehicles are not capable of achieving.

The bill simplifies and clarifies arrangements for the importation of vehicles granted concessions against the national standards by consolidating the current pathways into one concessional entry pathway. It also expands the range of vehicles that can be considered under the specialist and enthusiast vehicle provisions.

The fourth principle is improved compliance and enforcement powers to improve safety outcomes. A key challenge in the regulation of the provision of road vehicles is maintaining high levels of community benefit, whilst minimising compliance costs imposed on a diverse industry with diverse products.

The bill addresses this issue by delivering a flexible regulatory framework, with a graduated toolkit to monitor and enforce compliance with the rules. This is backed up with standard Commonwealth provisions on monitoring and enforcement powers contained in the Regulatory Powers (Standard Provisions) Act 2014 and extension of the government's product safety recall powers to cover commercial vehicles not covered by the Australian Consumer Law.

The fifth principle is continuing support of harmonisation of Australian standards with international standards—a longstanding policy of Australian governments. Significant regulatory savings are possible through harmonising our national standards with international best practice vehicle standards. This has been a longstanding policy of Australian governments, supported by the 2014 Productivity Commission review of the automotive manufacturing sector and the 2015 Harper Competition Policy Review.

To put these design principles into effect, the bill introduces the following key changes to the way the government will regulate the provision of vehicles to the Australian market.

Establishment of a national Register of Approved Vehicles

The new legislation is structured around entry of an individual vehicle onto a national Register of Approved Vehicles, as the means by which its approval for provision to the Australian market is evidenced. The register replaces the current requirement for the physical attachment of a compliance plate to the vehicle as evidence of compliance with national vehicle standards.

The bill prohibits the provision of a road vehicle in Australia unless that vehicle is on the register or a relevant exception applies.

The bill and its supporting rules set out two pathways for entry of a road vehicle on the Register of Approved Vehicles.

The first pathway, the 'type approval' pathway, is for vehicles that are new and meet, or substantially meet, every requirement of the national standards. Manufacturers will also need to be able to prove consistency in production of that type of vehicle. The majority of road vehicles provided to the Australian market will enter onto the register through this pathway.

The second pathway, the 'concessional' pathway, provides for a limited range of new and used vehicles granted concessions on a vehicle-by-vehicle basis against full compliance with the Australian Design Rules. It consolidates the current range of separate pathways into one—providing the Australian community with access to road vehicles such as genuine specialist and enthusiast vehicles, classic and vintage vehicles and vehicles with a special purpose that cannot be fulfilled if they complied with the Australian Design Rules. The latter includes vehicles such as mobile cranes and emergency services vehicles.

The introduction of the Register of Approved Vehicles is important to support the improved compliance and enforcement powers contained in the new legislation. It will constitute an accurate source of data—and will provide a date stamp when a contravention of the bill may have occurred.

The register will also provide consumers with an easily accessible source of information about a vehicle they are interested in potentially purchasing—enabling them to check the pathway used when the vehicle was provided to the Australian market, and any conditions which applied.

To improve the security of a vehicle's identity, the instruments made under this bill will introduce a secure identification-marking requirement for all new road vehicles. This requirement will provide a significant deterrent to motor vehicle theft and rebirthing.

The new legislation also provides simplified arrangements for the importation of vehicles for a purpose other than general road use—such as to allow testing and evaluation by manufacturers or temporary use such as for race and rally events or for exhibition. These vehicles can be traded in the Australian marketplace, but will not be entered onto the Register of Approved Vehicles. As is the case now, the relevant state or territory registration authority will decide if such a vehicle will be allowed to operate on the roads of that state or territory, and under what circumstances.

Tools to support a vehicle's entry onto national Register of Approved Vehicles

The bill also provides for the regulatory oversight of arrangements that support these pathways, such as test facilities, Registered Automotive Workshops, eligibility criteria for specialist and enthusiast vehicles and the introduction of independent vehicle compliance certification—to be known as Authorised Vehicle Verifiers.

Under the existing act, the Registered Automotive Workshop Scheme has allowed a range of used specialist and enthusiast vehicles to be made available in Australia. The bill contains a revised scheme—expanding that range to new and used specialist and enthusiast vehicles. The revised scheme reduces regulatory and compliance costs by removing unnecessary testing and parts replacement requirements.

The bill expands the range of vehicle makes, models and variants which are eligible for importation as a specialist and enthusiast vehicle and therefore concessional entry onto the Register of Approved Vehicles. The rules to be made under this bill will define the eligibility criteria so that they better capture vehicles that are of a genuine specialist or enthusiast nature.

Every vehicle processed through the Registered Automotive Workshops Scheme will be verified by independent third party inspection before its entry onto the Register of Approved Vehicles. This is designed to improve consumer confidence in the vehicle's compliance with relevant standards.

The changes to specialist and enthusiast vehicle arrangements have been the subject of extensive consultation with affected stakeholders.

The rules will also improve the existing arrangements for importing classic and collectible vehicles. Under the bill a vehicle which is at least 25 years old can be imported. This replaces the current rule, which is that a vehicle manufactured before 1989 can be imported. The new arrangements have been developed in recognition of the low community risk of these vehicles, which typically have limited road use.

Recalls of road vehicles or approved road vehicle components

The bill will give the responsible minister the power to issue a notice for compulsory recalls of road vehicles and road vehicle components and sets the framework for voluntary recalls. The inclusion of this power will clarify current recall powers and responsibilities conducted under schedule 2 of the Competition and Consumer Act 2010 (that is, the Australian Consumer Law). The Australian Consumer Law only provides for recalls in relation to consumer goods—limiting the circumstances in which the government can initiate a compulsory road vehicle, or road vehicle component, recall.

To address these issues, the bill's recall provisions, modelled on those in the Australian Consumer Law, allow the responsible minister to act in relation to all road vehicles and road vehicle components, and in relation to safety issues and issue recalls relating to serious noncompliance with any national vehicle standard.

Modern regulatory compliance and enforcement provisions

The bill modernises and strengthens the existing regulatory framework whilst improving transparency and decision-making. It does not, however, significantly change the obligations on vehicle manufacturers and importers.

Under the bill, the conditions of an approval are assessed up-front and the approval is granted based on the ability of the applicant to meet those conditions. This will improve clarity and certainty for stakeholders.

The bill introduces a graduated range of enforcement options, including infringement notices, enforceable undertakings and criminal sanctions.

The bill does this by triggering provisions of the Regulatory Powers (Standard Provisions) Act 2014, providing a Commonwealth consistent set of provisions to deal with monitoring, investigation and the use of sanctions in the enforcement of legal obligations.

It is important to have a range of enforcement options that allow any contravention of the bill or conditions of approval to be addressed on a spectrum of seriousness. It gives the government the ability to effectively penalise those who deliberately breach laws and greater flexibility to deal with those who have inadvertently committed a breach.

Following extensive engagement over the past four years with all sectors of the automotive supply industry, state and territory governments and the general public, these bills represent a comprehensive modernisation of the Australian vehicle standards regulatory regime.

In December of last year, I released for public consideration an exposure draft of the rules that will be made by this bill. While the key decisions concerning the new regulatory framework have been made, and are contained in this bill, I wanted to facilitate a further period of public consultation on the details of the rules before the bill is finalised here in the parliament. For the information of members, I have called for public comments on the provisions of the rules to be received by 16 February this year to further inform the forthcoming second reading debate. This bill ensures that Australia's national vehicle standards can respond to continuing change in the automotive sector.

The bill aims to balance the government's commitment to the local automotive manufacturing industry, full-volume importers, franchise motor vehicle dealers, importers and converters of used vehicles, and consumers of genuine specialist and enthusiast vehicles.

For Australian manufacturers and importers of full-volume vehicles, it means reduced red tape and streamlined certification processes.

For Australian motoring enthusiasts, it means an increased range of specialist and enthusiast vehicles will become available, and reduced costs of regulatory compliance.

For the Australian community more broadly, it means consumers can continue to have confidence in a motor vehicle regulatory system that promotes vehicles that are safe, produce less emissions and have appropriate anti-theft and energy conservation features.


House Hansard of other speeches available here.