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1998
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
_________________________________________________________
_________________________________________________________
(Circulated
by authority of the Minister for Transport and Regional Services, the Hon John
Anderson MP)
ISBN: 0642 379181
OUTLINE
The purpose of the Bill is to:
• enable
implementation of the Government’s policy to mandate model specific
vehicle fuel efficiency labelling via and Australian Design Rule;
• improve the administration of the Act by restoring some provisions
inadvertently removed or adversely affected by previous amendments;
and
• create a position of Associate Administrator to improve the
system for issuing approvals under the Act.
FINANCIAL IMPACT
STATEMENT
The amendments will have no impact on business. The
Department will be able to function more efficiently due to the administrative
improvements.
The Prime Minister’s policy of fuel efficiency
labelling is to be introduced by the development of an Australian Design Rule
which will be a determination under the Act. This will be the subject of a
separate Regulatory Impact Statement and consultative
process.
REGULATORY IMPACT STATEMENT
The Motor Vehicle Standards Act 1989 (the Act) provides the
legislative framework for standards for motor vehicles when they begin to be
used in transport in Australia. It also provides for the administrative
framework for enforcing compliance with these standards. These vehicle
standards are determinations under the Act and are known as Australian Design
Rules (ADRs).
The proposed amendments:
• broaden the scope of
the definition of “vehicle standard” to include measures promoting
the saving of energy,
• make procedural changes to the administration
of the Act including the appointment of an Assistant Administrator,
• improve enforcement of the provisions of the Act by restoring the
link to the Customs Act 1901 severed inadvertently when that Act was
amended and
• provide the ability to revoke approval to place
compliance plates on a motor vehicle.
The Office of Regulation Review has
advised that only the amendment expanding the scope of the definition of a
vehicle standard requires a Regulatory Impact Statement. Consequently, the rest
of this RIS focuses on the change to the definition and the rationale for this
proposal.
Problem
The Government has decided to introduce
an ADR for fuel efficiency labelling. In his Climate Change Statement of 20
November 1997, the Prime Minister announced that model specific fuel efficiency
labelling will be implemented as an Australian Design Rule as part of the
Automotive Industry Environmental
Strategy[1]. The labelling proposal
is a key element in a wider package of measures designed to improve the fuel
efficiency of the Australian vehicle fleet.
The Department has received
legal advice, which is confirmed by independent advice to the Australian
Greenhouse Office, that the scope of the current MVSA would not permit the
making of an ADR for fuel consumption labelling. Currently subsection 5(1) of
the Act provides that:
“vehicle standard means a standard for road
vehicles or vehicle components that is designed to:
(a) make road vehicles
safe to use; or
(b) control the emission of gas, particles or noise from
road vehicles; or
(c) secure road vehicles against theft.”
The objective of the proposal is to empower the Commonwealth to
implement a labelling standard.
The objective of the labelling
standard is to reduce greenhouse gas emissions from motor vehicles, by
influencing aggregate fuel consumption. An effective labelling scheme would
inform consumers of the relative fuel efficiencies of various models at the
point of sale and encourage selection of more fuel efficient vehicles. Over the
longer term this should in turn encourage manufacturers to produce and market
more fuel efficient vehicles. The United States, Japan and the United Kingdom
require a form of model specific fuel efficiency label to be placed on all
vehicles.
The labelling scheme will contribute to a reduction in
greenhouse gas emissions from the transport sector in the period to 2010-2015 if
it is assumed that the ADR would commence in 2002 and then affect a significant
percentage of the motor vehicles in the fleet.
This scheme will be
implemented by developing an ADR which is the subject of a separate consultative
and legislative process, including a detailed regulatory impact
statement.
Options to achieve the desired objective include:
1. The current
situation
2. Introducing a non-regulatory voluntary code of
practice
3. Amending the Act’s definition of a vehicle standard to
incorporate only the current policy proposal for model specific fuel efficiency
labelling
4. Amending the Act’s definition of a vehicle standard to
incorporate the exact wording of an international agreement to which Australia
is considering acceding
5. Amending the Act’s definition of a vehicle
standard to include a provision to “promote the saving of
energy”.
1) The current situation
Model specific fuel consumption
information is currently available through the Fuel Consumption Guide
published until 1996 by the former Department of Primary Industries and
Energy and now the responsibility of the Australian Greenhouse Office. This
information is provided voluntarily by most vehicle manufacturers and importers
under the Federal Chamber of Automotive Industries’ voluntary code of
practice. Until 1996 this information was published in booklet form and up to
500,000 copies were printed. Currently the information is only available on the
Internet.
The guide is thought to have been used primarily by fleet
managers with commercial imperatives to consider relative fuel consumption
performance rather than by private consumers. These guides were also not always
available at the point of sale.
Improving the distribution of the guide
could contribute to the consumer information objective of the proposal. However
vehicle retailers cannot be to display these guides prominently in showrooms.
Such displays are likely to be less effective that stickers on vehicles as
research has demonstrated that, when intending to purchase a vehicle, consumers
focus on the vehicle rather than the showroom
surroundings[2].
This option
has the advantage of not requiring a legislative
amendment.
2) Introducing non-regulatory voluntary codes of
practice
Under this option the Act would not require
amendment.
In principle, it would be possible to develop a voluntary code
for model specific fuel efficiency labelling, but the automotive industry has
consistently expressed opposition to such a scheme for a number of years.
The industry favours a generic fuel consumption label which would not
contain any information about the fuel consumption of an individual vehicle or
model, coupled with continuation of the Fuel Consumption Guide. After a
thorough examination of the issues, the Government has concluded a generic label
is of limited value.
The Government has decided to pursue a mandatory
approach, as the introduction of model specific labelling through a voluntary
mechanism has not been achieved, despite a significant period of negotiation
with the industry.
3) Amending the MVSA definition of a
“vehicle standard” to incorporate only the current policy proposal
for model specific fuel efficiency labelling.
This option would
achieve the policy objective, but it is very limiting and not consistent with
the definition in the UN agreement for vehicle standards.
This narrower
addition to the definition would be along the lines of a vehicle standard
“to require model specific fuel consumption labelling”. Should
further ADRs related to energy saving be required in the future then the Act
would require further trivial amendment. The preferred option (option 5)
removes the need for such an amendment.
4) Amending the
Act’s definition of a vehicle standard to incorporate the exact wording of
an international agreement to which Australia is considering acceding
Australia is currently considering acceding to the United Nations
Economic Commission for Europe 1958 Agreement on the harmonisation of vehicle
standards (the 58 Agreement). Article 1 of this Agreement provides that the
agreement covers objects “whose characteristics have a bearing on road
safety, protection of the environment and energy saving”.
It is
Government policy to harmonise Australian motor vehicle standards with
international standards, wherever possible, in order to improve
Australia’s trade position in relation to motor vehicles and components,
and to avoid the imposition of additional compliance costs on the motor vehicle
industry which would be passed onto the consumer in higher prices. Australia is
currently considering acceding to the 1958 Agreement. Some 60 per cent of the
ADRs already conform to international standards.
This proposal would
allow the development of the proposed ADR on fuel consumption
labelling.
However, notwithstanding the policy of international
harmonisation, the rest of the MVSA does not bear any resemblance to the 58
Agreement. Should Australia accede to the Agreement, adoption of the ECE
regulations will be considered on a case by case basis. The rest of the MVSA is
very different to the wording of the 58 Agreement and there is little logic in
having a single harmonised part of the Act. If the Act requires amendment in
order to accept international regulations, this should be done after a decision
to accede has been made.
5) Amending the Act’s definition
of a vehicle standard to include a provision to “promote the saving of
energy”.
This is the preferred option for a number of
reasons.
Firstly, it achieves the objective of providing a capacity in
the Act to deliver an ADR meeting the Government’s specific policy
decision. As indicated earlier, this ADR will be the subject of a separate
Regulatory Impact Statement.
Secondly, it is broad enough to enable other
greenhouse/fuel conservation objectives which may be agreed in the future to be
adopted, without the need for separate amendments. Such regulations would not
be introduced without a separate individual Regulatory Impact
Statement.
Finally, it is broad enough to encompass the
Government’s policy commitment to conserving energy without being too
broad.
This proposal will have no impact.
It simply provides the
capacity to implement a specific Government initiative under its
commitments to reduce greenhouse gas emissions from new vehicles (through
encouraging more fuel efficient vehicles). Mandatory model specific fuel
efficiency labelling is designed to assist the community to make more informed
choices regarding fuel efficient vehicles. It is essentially a consumer
information initiative.
The impacts of the labelling standard will be
assessed via separate RIS which will be developed in the process of drafting the
ADR. In summary though, the vehicle manufacturing industry already performs the
tests required to report fuel consumption, so the main impact on business as a
result of the subsequent development of the ADR, will be the costs associated
with the printing of labels and their application to vehicles. In addition, an
economic assessment of greenhouse gas abatement measures by the Bureau of
Transport and Communications Economics, concluded that model specific labels
represent a cost-effective ‘no regrets’ option, by encouraging and
assisting consumers, particularly private buyers, to take fuel efficiency into
account in their vehicle purchase
decisions[3].
As indicated, the proposal to amend the Act merely enables the later
development of the ADR for fuel consumption labelling. The FCAI have been
advised of the proposed amendments, and has advised that the Chamber has no
objections or difficulties with the amendments, noting that the labelling ADR
will be subject to its own review and public comment process.
Approval
for the ADR will be sought through the established consultative processes
involving the Motor Vehicle Environment Committee (MVEC). The key bodies
involved are the National Environment Protection Council, the National Road
Transport Commission, the Australian Transport Council, the Committee on
Regulation Review and finally the Council of Australian Governments.
As
part of the consultative process, the draft ADR and RIS will be circulated for
public comment, including to groups such as the FCAI, Australian Automobile
Association, the Motor Traders Association of Australia, and the Australian
Consumers Association.
The ADR proposal has already been the subject of
detailed consultation with the motor vehicle industry, as well as motorist
(consumer) organisations over a significant period of time. Consultation
occurred in the lead up to the Prime Minister’s Climate change Statement
of November 1997, and prior to this in the context of the 1992 National
Greenhouse Response Strategy and the 1995 greenhouse statement, Greenhouse
21C.
The preferred option for providing the capacity to develop standards
relating to fuel efficiency is through an amendment to the Motor Vehicle
Standards Act 1989 to broaden the definition of “vehicle
standard” to include standards promoting the saving of
energy.
While this approach will cover more than the current policy
intention of making model specific fuel efficiency labelling mandatory, the
advantage of this approach is that it:
• harmonises with the intent of
international agreements; and
• removes the need to amend the
legislation in future should international or other regulations be adopted
locally.
The new definition does not, in itself, require the development
of further, more demanding standards. This option was chosen after a
consideration of a number of alternatives because it is the most straightforward
and practical way to implement the Government’s specific commitment.
There are no activities associated with the implementation of these
amendments beyond the separate development of an Australian Design Rule which
will be the subject of a separate RIS. The implementation of the design rule
will be discussed in that document.
NOTES ON
CLAUSES
Clause 1 Short title
This clause
provides for the Act to be cited as the Motor Vehicle Standards Amendment Act
1998.
This clause provides for the Act to come into operation on the date on
which it is proclaimed.
Item 1 Subsection 5(1)
This amendment provides a
definition of “Associate Administrator” of Vehicle Standards for the
purposes of the proposed amendment to section 22.
Item 2 Subsection
5(1)
This amendment to subsection 5(1) extends the definition of
vehicle standard to include standards for energy saving.
The amendment
allows standards to be made to promote the saving of energy. This broad
provision would enable the introduction of an Australian Design Rule for
labelling vehicles with model specific fuel consumption information in
accordance with the Prime Minister’s Climate Change Statement of 20
November 1997. The amendment also makes the scope of the definition consistent
with that applicable to international standards promulgated by the United
Nations. This is desirable because of Australia’s efforts to promote the
international harmonisation of vehicle standards.
Item 3 Paragraph
11(1)(a)
The proposed amendment is necessary to rectify
inconsistencies in the Act following the amendments made in 1995.
Section
11 details the Minister’s capacity to withdraw identification plate
authority. The arrangements in relation to identification plates are covered in
section 10 and approval for placing plates on vehicles is covered in section
10A. To enable the Minister to have the capacity to withdraw a plate authority
for all types of approval, section 11 must refer to both sections 10 and
10A.
Item 4 Subparagraph 11(1)(b)(i)
This amendment
clarifies the existing provision so that it is clear that the arrangements with
which the Minister must be satisfied are the arrangements referred to in section
10.
Item 5 At the end of Subparagraph 11(1)(b)(iv)
This
provision allows for the addition of a further condition under which an approval
can be revoked. This is described in the next provision.
Item 6
After subparagraph 11(1)(b)(iv)
Subsection 10A (4) enables the
Minister to apply conditions to the authority to place identification plates on
vehicles. The amendment provides a mechanism for the Minister to cancel,
suspend or vary the person’s authority if the person breaches a condition
of that authority.
Item 7 Paragraph 12(d)
This amendment
removes the conjunction and terminates section 12 at this point.
Item
8 Paragraph 12(e)
This provision repeals paragraph 12 (e) to remove
the anomaly of having a criminal penalty attach to a matter which is more
appropriately dealt with under the provisions of section 11.
Item 9
Subsection 17A(1)
Section 39 of the Customs Act 1901 has been
repealed and the importation provisions are now referred to elsewhere in that
Act. The amendment restores the intended link between the two Acts to allow an
authority holder to deal with an imported vehicle.
Item 10
Subsection 22(1)
As the national system for formulating and applying
national road vehicle standards has developed since the introduction of the Act
in 1989 the workload of the Administrator has steadily increased.
Section
23 empowers the Minister to delegate specified functions and powers under the
Act to the Administrator or another Senior Executive Service Officer. Some non
Senior Executive Service staff have appropriate experience and expertise to
carry out some of the more routine duties currently carried out by the
Administrator. The amendment to section 22 creates the position of Associate
Administrator and removes the requirement for the delegation to be made to a
member of the Senior Executive Service.
This amendment specifies that an Associate Administrator is to be
appointed by the Secretary to the Department and is to hold an office in the
Department.
This amendment changes the current arrangements by omitting the provision
under which the Minister is able to delegate certain of the powers under the Act
to a member of the Senior Executive Service and replacing it with a reference to
the newly created position of Associate Administrator.
Item 13
Paragraph 23(e)
This amendment removes the semi colon at the end of
paragraph 23(e).
Item 14 Paragraph 23(f)
Section 23
empowers the Minister to delegate specified functions and powers under the Act
with the exception of those listed in paragraphs 23(a) to (f). Paragraph 23(f)
relates to “the power under section 11 to cancel an authority”. It
is appropriate for the Minister to be able to delegate that power and
accordingly paragraph 23 (f) has been repealed.
Item 15 After
paragraph 39(1)(aa)
Section 10A of the Act deals with approvals for
the placement of identification plates on vehicles and was inserted into the Act
in 1995. Section 39 specifies the provisions of the Act under which an
application for review by the Administrative Appeals Tribunal may be sought.
The insertion of paragraph 39 (1) (aa) allows a person to apply to the
Administrative Appeals Tribunal for a review of a decision made under section
10A.
Item 16 Paragraph 39(1)(b)
This amendment restores
review rights inadvertently affected when the Act was amended in 1995.
Paragraph 39(1)(b) refers to subsection 14(2) which was repealed in 1995.
Provisions relating to approval for supply of nonstandard vehicles now appear in
section 14A. It is therefore appropriate that these decisions be subject to
application for review by the Administrative Appeals Tribunal.
[1] “Safeguarding the Future:
Australia’s Response to Climate Change”, the Hon J W Howard 1997,
p12
[2] Wallis Consulting Group,
1994, study for DPIE
[3]
“Transport and Greenhouse: Costs and options for reducing emissions”
Report 94 BTCE 1996, pp124-141