Government turns back on parallel imports

The federal government has caught out the parallel import industry and its supporters with Treasury's response to the Competition Policy (Harper) Review.

Under the leadership of former prime minister Tony Abbott, the government appeared receptive to lifting restrictions on parallel importation, as recommended by the Productivity Commission and broadly supported by the ACCC in its response to the review of the Motor Vehicle Standards Act.

But now, two months after the leadership spill that saw Malcolm Turnbull installed as the new PM, the government has opted not to accept the recommendation. This has been outlined in the government's 'Response to the Competition Policy Review'.

The government's change of heart will be welcomed by the new-car industry represented by the FCAI and the AADA. Typical of the views of the automotive retail industry in Australia, newly-appointed Rolls-Royce dealer Bobby Zagame was critical of plans to ease parallel import restrictions when motoring.com.au spoke with him last week.

"Certainly we would see it as a negative," he said. "I can't understand the method behind the madness. We're a big tax collector for the government and again, unless the dollar was at [parity] to the US dollar, or the British pound was stronger... then potentially there would be some savings."

According to Zagame, making parallel importation easier for the consumer makes less sense now than when the dollar was close to parity with the greenback, or in fact higher.

"If you look at where it [the Australian dollar] is now, it's probably not a great advantage if you had to try and bring one over and pay all the taxes and everything that goes with it.

"All the safety and everything else that goes with the cars, and what you may buy from overseas – the salt on the roads, the rust... all those sorts of things – I just don't understand why anyone would consider it..."

Zagame's comments fall into line with long-standing concerns mounted by individual car companies and their dealer networks and the FCAI.

Pictured: Bobby Zagame with Rolls-Royce Dawn at Melbourne's Royal Exhibition Building