Government to build safer roads, reduce congestion

The Morrison coalition government was re-elected last weekend in what has been a shock result for pollsters and betting agencies alike.

It's no landslide, but the government appears on track to retain a majority in the House of Representatives, likely ensuring that the safer-roads platform the government took to the election will be implemented in full. That platform has been outlined on the Liberal Party's website, but in short the government will invest $100 billion in transport infrastructure to improve traffic flow and reduce the road toll.

Around $12 billion of that sum will be divided between reducing urban congestion ($4 billion), upgrading major roads in rural areas ($4.5 billion) and a raft of measures collectively worth over $2 billion, including further work on the Black Spot program, the bridges renewal program and a program to improve safety and productivity for heavy commercial vehicles.

Safety is given additional impetus with $8 billion for the upgrade of 'driver reviver' resourcing, $1 million for RV (recreational vehicle) driver education and $16 million to extent the Keys2drive program another two years.

In finer detail, the government is also spending $6.6 million on ANCAP and $5.9 million for the Federal Office of Road Safety.

Industry lobby groups the AADA (Australian Automotive Dealer Association) and VACC (Victorian Automobile Chamber of Commerce) have both waded in, anticipating fruitful collaboration with the Morrison government. For the VACC, that means pressing the government for a mandated code of conduct applied to insurers and repairers, streamlining business red tape, removal of the luxury car tax (LCT) and developing an end of life vehicle program. The AADA is calling for the government to implement a code of conduct for automotive retailers.

In the context of climate change action, the government will stick with its plan to reduce CO2 emissions by 26 to 28 per cent below 2005 levels by 2030. How that will specifically affect the automotive trade is not yet clear. The government had no specific response to the Labor opposition's electric-vehicle policy, but treasurer Josh Frydenberg is known to be a supporter.

In some quarters, the Australian market for new cars is expected to decline further in 2019, despite persistent rumours the Reserve Bank will cut interest rates later this year. That will have little effect on the banks' tighter lending provisions – which have been blamed for the downturn in sales over the past 12 months – following the release of findings by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. House prices have fallen in Australia's two largest cities, which won't help licensed motor car traders either. US president Donald Trump's looming trade war with China is likely to have ramifications for Australian business running company fleets.

But the Morrison government's re-election may be enough in itself to boost consumer confidence in the local market.