Half correct.
First part correct. The reason we aren't allowed to fit the retractable towbar is because the Australian Standards Association say we can't.
Second part incorrect. Australian standards aren't necessarily strict, they're just different. The reason for them being different is to keep this worthless bureaucratic organisation alive. Contrary to popular belief, this is not a government body. It is a private company. It gets oxygen through bureaucratic delay.
Purporting to be the overseer of Standards, it's actually just a self perpetuating impediment to common sense that we are all paying for through increased red tape. By dictating a different standard than the rest of the planet we pay more for everything we buy, and are refused access to better designed and more practical solutions, not because they're unsafe, but because the ASA hasn't gotten around to testing it yet. To just sign off on something engineered in Germany would show the country that they are actually irrelevant.
This tow bar is just one example. Isofix car seats are another glaring example. The rest of the world has had Isofix car seats available to them since 1997. They are a vastly better car seat. ISO stands for International Standards Organisation (loosely). You would think anything that has been deemed to comply with an international standard would be ok here. Not so.
Up until very recently, last couple of years, it has been illegal to fit an Isofix car seat. If you did, and a copper saw it, you could be fined. Worse still, if your child was injured in an Isofix car seat, they would not be third party insured. Instead we were forced to feed seat belts through the back of the ASA approved seat, sometimes propping them up on towels to cater for the design of the seat itself. It was so convoluted that it was common knowledge a majority of these seats were fitted incorrectly. How many children's lives have been lost through this is undetermined.
Now you would think the ASA would just test Isofix seats and then give them the tick, not so, that would be too easy and open them up to criticism as to why it had taken them so long to get off their bloated arses and approve a better seat. Instead they mandated that Isofix seats were approved, as long as they also had a top tether. Small problem, no other country had adopted this standard and there were actually no seats sold on the planet that met this standard. The seat manufacturers had to tool up to produce these seats specifically designed to meet the Australian Standard. You can buy them now, finally, but you pay a huge premium for them. As a result most parents fit inferior seats because they can't afford to pay for these niche market seats. It's a travesty.