KEY POINTS:
For its defenders it is a measure that will, eventually, prevent hundreds of premature deaths a year.
For its critics it will progressively choke off the supply of affordable vehicles for many people and prove an environmental own goal.
It is the Government's plan, come the new year, to regulate motor vehicle imports on the basis of exhaust emission standards.
Judith Tizard, Associate Minister of Transport, cites a study called Health and Air Pollution in New Zealand, which concludes that over 500 premature deaths a year are attributable to air pollution from vehicles.
That is the tip of the iceberg of health costs, she says. "It's unconscionable."
The plan is to adopt emissions standards already in place in Japan, Europe, Australia and the United States and to apply them to vehicles imported into New Zealand.
The Government has also asked officials to have another look at standards and emissions testing for the existing fleet, especially diesels. Earlier plans for such a scheme were dropped, partly because of the potential impact on low-income households.
Officials are recommending a slower phase-in for the new regime at the border than in the draft rule put out for consultation this year, at least for petrol vehicles. It remains to be seen whether the Cabinet will agree.
In any case there are some inescapable realities:
Each year's inflow of used-vehicle imports equates to less that 5 per cent of the existing fleet, so changes to the age composition of imports will take years to lower the average age of the whole fleet (currently 12 years).
To make a difference the new policy will have to bite at that part of the age-breakdown of imports where the big numbers are - vehicles of seven, eight and nine years old.
If the supply of those vehicles is blocked, where will that frustrated demand go?
People don't usually buy an eight-year-old Japanese import because it's their dream car. They buy it because it's what they can afford.
If those middle-aged vehicles are barred at the border the people who would have bought them will either have to buy newer ones - accepting bigger hire purchase bills or smaller vehicles than they would have liked - or they will opt to keep existing vehicles on the road for longer.
But that would reduce the environmental and health gains and might even be counter-productive.
Modelling by economic consultancy Covec, commissioned by the Ministry of Transport, concluded that in the best-case scenario, when everyone affected by the import ban upgraded to a newer import instead, the potential fuel and emissions savings peaked at 0.5 per cent of annual totals.
In the worst case, when they all left the market and kept their existing vehicles, emissions actually rose - by as much as 2.5 per cent at the peak.
Other scenarios fall between those extremes, Covec says, but are skewed more towards the latter.
"There are no simple solutions that will be effective environmentally and have low costs. And those measures that aim at removing the worst vehicles from the fleet invariably target the older lower-value vehicles that tend to be owned by poorer households. The social impacts can be significant."
Research by the New Zealand Institute of Economic Research, for the Independent Motor Vehicle Dealers Association, concluded that under all scenarios which it considered the policy had a minimal impact on the number of vehicles in the fleet that would fail the proposed standard.
There are a lot of them already in the fleet and the policy does nothing to speed their exit. Indeed it slows the exit of non-compliant vehicles, it said.
IMVDA chief executive David Vinsen said: "The essence of our argument, which we believe has been confirmed by Covec and NZIER, is that every eight-year-old used import displaces a 17-year-old vehicle which is scrapped."
But the Government argues that such studies ignore the impact of other policy measures which will influence the fleet's composition and how well maintained vehicles are.
It has tested, for example, schemes that provide incentives to encourage the scrapping of old but still road-worthy vehicles. Vinsen said New Zealand importers now faced "extreme" competition for used Japanese vehicles from Russia and other countries.
The price effects of that have been mitigated by the New Zealand dollar's rise against the yen, almost doubling in value over the past seven years and appreciating 10 per cent in the past year. That trend cannot be relied on to continue indefinitely.
"The way the rule is drafted it continually denies us access to the volume of vehicles we require in Japan just as they become available for us and affordable for our market." Vinsen said there was a "sweet spot" for affordability of about $10,000 to $12,000 for the retail buyer, driven by hire purchase payments of around $100 a week.
"That's the basic eight or nine-year-old car that is going to displace one of those older ones."
But he said the cheapest vehicles which complied with the new standard would be in the $14,000 to $20,000 range. "And that's outside what is affordable for many people."
Tizard said similar claims were made in 2002 when new frontal impact safety standards were introduced. "It was going to be the end of affordable imports.
"Well it didn't happen."
"We now have clear evidence that poor-quality cars and other vehicles have a direct cost in terms of health and days off work and all that, and a responsible Government can't ignore that. What we are now arguing about is when that change happens."
The Government would monitor the effects of the new regime very closely, she said.
"The fact is we have a glut of cars now so it will be a delayed effect whatever happens. We will be measuring the social and economic, as well as the environmental, impacts to the best of our ability and I am very happy to change things as we go if there is any clear evidence."
She said the vehicles probably doing the most damage were light commercial and commercial diesels.
Covec said that had the proposed rule been in place last year, 96 per cent of diesel imports would have been banned.
Vinsen said diesels could run for a very long time if they were well maintained. "So instead of retiring them at say 300,000 or 400,000 kilometres they will recondition them and run them for another 300,000, which absolutely defeats the purpose."
Mike Noon of the Automobile Association said it supported implementing minimum standards for emissions. "But it needs to be implemented in a way that still gives New Zealand motorists access to affordable modern cars."
The rule as drafted not only introduces a standard, it progressively reduces the lag between it and that applying in Japan, so that by 2013 the maximum age of used petrol cars imported would be four years.
"That would reduce the volume of current imports by about 90 per cent, which is dramatic. That concerns us greatly," he said.
AA proposes an eight-year lag for all subsequent standards.
"So you end up not being able to import anything older than eight years but that at least increases the pool of used vehicles in Japan [eligible for import]. Volumes would be relatively consistent from year to year and the price range would be wider."
The chief executive of the Motor Industry Association which represents importers of new vehicles, Perry Kerr, said the car market was no longer as dependent on used imports because of higher sales of new cars over the past six years.
"There is now a considerably larger pool of New Zealand-new cars available in the popular price brackets," he said.
"There are also plenty of 10- to 12-year-old cars available in the lower price range without the importers adding to our pollution problem by importing more of them."
Government estimates off base
The petrol vehicle fleet may be dirtier, and the diesel fleet cleaner, than the Government thinks they are, says Ian Brooks, chairman of Zero Emissions.
The company offers an emissions testing service at a string of service stations and has just released the results of a study based on 452 petrol and 92 diesel vehicles.
"The Government estimated that only 10 per cent of vehicles would fail an emissions test but our research shows that 16 per cent of New Zealand cars with petrol engines and 7 per cent using diesel would not be allowed on the road in Europe or most parts of North America," Brooks said.
That is based on the Euro II standard which is the minimum considered acceptable in most industrialised countries, he said. Of the petrol cars that passed it, only half would also pass the Euro IV standard, which is the level most vehicles in industrialised countries would meet.
By contrast 85 per cent of the diesel vehicles tested would pass the higher standard.
It is foolish to regard the age of a vehicle as a reliable proxy for its emissions performance, Brooks believes.
"We are finding that old vehicles will often pass and new vehicles will sometimes fail. It makes more sense to us to put no restriction on age but to ensure that all vehicles coming into the country are emissions tested. Some will be fixable, some will not," he said.
"But the next question is how do you do it? The Japanese system of testing is not nearly as rigorous as the European system especially how they look at particulates, which are very harmful."
