Transcript - 2UE Mornings with Stuart Bocking

STUART BOCKING: We talked a couple of weeks back, changes to the law in relation to the personal importing of new motor vehicles. Now these will be new or near-new, there are some specific criteria here: they must be no more than 12 months old, have no more than 500 kilometres on the clock

. But the laws will changed from 2018 so that we’ll be able to personally import new cars or motorbikes from another country. Now it raised some questions in terms of pricing, luxury taxes, a variety of things. The minister overseeing all of this is the Minister for Major Projects, Territories, and Local Government. I speak of Paul Fletcher, who’s a Liberal Member for the seat of Bradfield in Sydney, and I’m pleased to say on the line from our studio in Canberra.

Paul Fletcher, good morning.

PAUL FLETCHER: Good morning Stuart, good to be with you.

STUART BOCKING: Thank you for your time. This is a significant move, what are going to be some of the upsides of the ability for people to now import motor vehicles, motorcycles from 2018?

PAUL FLETCHER: Well look the key thing Stuart is increased choice. So as part of this review of the Motor Vehicle Standards Act, and it’s the first time we’ve had a look at the act for about 15 years, one of the things that the Government is proposing is that there will be this limited right to personally import vehicles. As you’ve said, the vehicle needs to be less than 12 months old, it needs to have less than 500 kilometres on the clock, and it must be from a right-hand drive market with the same standards as Australia, and initially that will be Japan and the UK.

Now, what’s the benefit? I think the principle benefit will be some additional choice, because you might for example be interested in say the diesel-powered variant of a model that’s only available in Australia in petrol. This will now give you the option, if you choose, to go and import it directly from Japan or the UK rather than going through a dealer in Australia. Now I hasten to add, we don’t think the numbers are going to be massive.

STUART BOCKING: Yeah.

PAUL FLETCHER: There’s about 1.1 million new vehicles coming into the Australian market each year. We think probably about 30,000 people, or 30,000 vehicles are likely to be brought in under this particular provision. And there will be some additional responsibilities as a consumer that you’ll need to face if you go down that track, but there will be some people for whom that choice will be attractive.

STUART BOCKING: I noticed as well, things like seatbelts, tires, there are some requirements there, changes that have to be made to satisfy Australian standards. They’re all things people would have to keep in mind when they think about importing a vehicle from overseas back into Australia.

PAUL FLETCHER: Look, it will be a somewhat more complicated pathway. One of the issues is that if you import a vehicle new from another market you won’t have the benefit of the manufacturer’s warranty in Australia.

STUART BOCKING: Right, yeah.

PAUL FLETCHER: So you’ll need to make your own arrangements. Now what’s happened in other markets where this is done is that typically the insurance industry steps forward, and from our discussions with the insurance industry, we do think there will be companies coming forward with products, but that will be something additional you’ll need to pay for. So you need to factor all of that in to determine whether it’s something that as a consumer you find attractive and something you want to do. But it is about offering some additional choice.

As I say, I think it’s going to be mainly consumers that have a particular interest, perhaps in a particular model or a variant that is not available in Australia, who will say look, yes there’s some more responsibilities for me as a consumer to go down this path, but I think it’s worth doing and I will do it. We do think the majority of people will say look … it continues to make sense for me to go to my trusted local dealer.

STUART BOCKING: Yes.

PAUL FLETCHER: And that will be where the vast majority of people will go. But it is additional choice for people who have a particular interest in say a particular model.

STUART BOCKING: Now as it’s been, there has been a special duty on imported used vehicles, around $12,000 – that will go as part of these changes?

PAUL FLETCHER: Look that’s right. There is, as you rightly say, a duty on the statute books of $12,000. It’s not charged very often today, but it is seen as a bit of a blocker, a bit of a reason why people might think okay well look I won’t look at bringing in a vehicle because I might be exposed to this duty. And so we’ve decided that that will be removed.

I might just explain there, that applies to used vehicles. So what we’ve been talking about so far is new vehicles, and this new personal import scheme. At the same time, there’s a set of arrangements that already apply under the existing law for so-called specialist and enthusiast vehicles, and what are called the concessional pathways. And I’m afraid there’s a lot of jargon in this area. But my point is, under both specialist and enthusiast vehicles, there’s already the capacity for people to bring in a vehicle that meets certain categories, which is second-hand.

To give you one clear example, if a vehicle today is manufactured before 1989, you could bring it in on the basis that, you know, it’s a classic car and you’re an enthusiast. Now, what we’re going to change that to is if the vehicle is more than 25 years old. So there’s some tidying up changes being made in relation to the specialist and enthusiast vehicle category, and in relation to the so-called concessional pathways. And that, again, is about giving people a bit more choice.

I should add, that with the personal import arrangements I talked about, there are going to be some important safeguards; in particular the vehicle will need to be inspected by a qualified person or workshop before it’s allowed to come in, and so there will be safeguards in place.

STUART BOCKING: Right, so you wouldn’t have a scenario the vehicle gets here, then we suddenly discover it’s unsuitable and you’re dealing with a problem of how do I get it back. So before it leaves the country of origin it will have to be checked first?

PAUL FLETCHER: Well the checking needs to occur, and you as the consumer have the responsibility to get that approval from the qualified person.

STUART BOCKING: Yeah.

PAUL FLETCHER: And we’re thinking particularly about issues of criminality …

STUART BOCKING: Yes.

PAUL FLETCHER: … making sure you haven’t had crooks involved and tampering with the odometer or anything like that. But also that the vehicle is safe and roadworthy, and all of those things.

STUART BOCKING:            Yeah, and obviously money not owed by somebody else on it, all of those things that can happen. I mentioned the other day, and this was raised with a few of our callers, when you talk about new or near new vehicles, a luxury sales tax which can apply to vehicles in excess of around 50-odd thousand dollars – is that going to be bypassed here or would that still apply? What will work there?

PAUL FLETCHER:   No, there’ll be no change to those arrangements. So if you bring in a vehicle which is over the threshold then that tax will be collected at the time of the vehicle coming in, just as applies today. So the luxury tax will continue to apply.

STUART BOCKING:            So there isn’t a loophole around the paying of that tax by importing a vehicle like that yourself, for instance?

PAUL FLETCHER:   No, the luxury tax will continue to apply.

STUART BOCKING:            Yeah. So when you look at this all up, this  is- it’s a niche area I suppose, but it’s more about adding to choice than it is necessarily driving a much better deal.

PAUL FLETCHER:   Look, I think that’s right. We think that there may be, on some models, some modest opportunity to get a better price, but in the main the Government doesn’t believe this is about getting vehicles more cheaply. It’s about giving Australian consumers more choice. And look, that’s why I think it’s been positively welcomed by, for example, the Australia Automobile Association, which is the peak body for all the motoring clubs, and the NRMAs and so on around the country.

It’s been welcomed by Choice, so the consumer group and so on, because it is about giving consumers some additional choice, some additional options. Yes it involves some additional responsibilities for a consumer; you’ll have to worry about some things that you don’t have to worry about if you go to your local dealer, that’s why we think the majority of people will stick with their local dealer. But for some consumers who are interested and motivated in this particular purchase, have a particular passion about a particular vehicle for example, this will give them some options that they don’t have today. For example, as I say, a diesel variant of something that’s only available in petrol in the Australian market today.

STUART BOCKING:            Okay, well very important. Just before you go, you’ll have seen and heard some of the criticism, the do-nothing Turnbull Government, some of the dithering we’ve seen around tax reform, you’d obviously disagree. Why is that commentary wrong, would you say?

PAUL FLETCHER:   Well, I think this issue is one very good example of it. We’re rolling out reforms across a whole range of areas. I can look in another area in the infrastructure portfolio where I was with the Prime Minister last week announcing the …

STUART BOCKING:            [Talking over] In North Queensland, yeah. In Brisbane, yeah, you were in Brisbane.

PAUL FLETCHER:   Well, the Prime Minister was in North Queensland with Barnaby Joyce, but later on we were announcing the Infrastructure Australia 15 year plan. Now, that has an infrastructure priority list of 93 projects around the country at various stages of development, most of them not yet at business case stage.

But that’s a 15 year plan, and we hope that over those 15 years many of those projects come forward to seek funding, and that many of them will then turn into delivered infrastructure projects, allowing people to move around the city more efficiently, get to work and get back home to their families quickly, move freight around the cities and around our great nation as quickly as possible.

All of these things are why it’s so important to have the right infrastructure so we don’t have congestion, so our roads are as safe as possible, and so people can move about as quickly and efficiently as possible.

STUART BOCKING:            Alright, so you’re getting on; things are happening.

PAUL FLETCHER:   There’s plenty happening, let me assure you of that, Stuart.

STUART BOCKING:            Alright, look I appreciate your time this morning, good to chat with you.

PAUL FLETCHER:   Good on you, thanks very much.

STUART BOCKING:            Thank you. Minister Paul Fletcher joining us from our Canberra studio.

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