PRIVATE MEMBERS' BUSINESS - Automotive Industry

26 November 2018

I move:

That this House:

(1) notes that:

(a) there are approximately 1,500 new car dealers in Australia that operate 3,500 new vehicle outlets;

(b) 85 per cent of new car dealers are private or family owned businesses; and

(c) the Australian Automotive Dealer Association is the peak industry body exclusively representing franchised new car dealers in Australia;

(2) recognises that:

(a) the economic impact of the new vehicle retailing sector to Australia is significant, contributing $14.91 billion dollars to the national economy and employing almost 70,000 Australians;

(b) vehicle manufacturers in Australia are increasingly behaving in a way that makes it very challenging for new car dealers to run a viable business;

(c) relations between manufacturers and dealers is currently governed by the Franchising Code of Conduct; and

(d) this code has failed to protect dealers as it does not account for the highly technical nature of the automotive industry and the scale of both dealers and manufacturers relative to regular franchisees and franchisors; and

(3) calls on the Government to support Labor's plan to implement an industry-specific auto dealership code that will deliver clear ground rules for manufacturers and dealerships, including obligations under the Australian Consumer Law and consumer complaints, warranty and repair processes, dealership agreements and the ability to make variations to them, and termination notices.

The Australian car industry has seen a shift and change faster than perhaps any other industry in Australia. It wasn't long ago that you could bet your bottom dollar that Holden and Ford would be battling it out at the top of the sales chart. It was one of Australia's longest rivalries and it was between two of the greatest cars our country has ever produced. But, as we know, sadly, those days are long gone. An influx of imported models and the need to adapt to constant change has meant that the pressure placed on dealerships continues to grow. This is not helped by the uneven playing field, which is tipped heavily in favour of the multinational manufacturers whilst local family-owned dealerships do it tough.

Earlier this year I sat down with the CEO of the Australian Automotive Dealer Association, David Blackhall, and communications and policy director James Voortman here in Parliament House. They told me about the struggles that dealers across the country are facing. We spoke about the association's submission to the Parliamentary Joint Committee on Corporations and Financial Services' inquiry into the operation and effectiveness of the Franchising Code of Conduct and the huge impact that this has on dealers. This inquiry is currently in its final stages, with a report due in about 10 days time, on 6 December. I, like many of my Labor colleagues, will be keeping a close eye on the government report and response.

We also spoke about the power imbalance in the automotive industry between car manufacturers and franchised new-car dealers and how this disadvantages both dealership businesses and consumers who purchase new vehicles from dealers, and we spoke about how the Franchising Code of Conduct offers very limited protection for dealers. I'm delighted to say that a future Shorten Labor government, if privileged to be elected, will implement an industry-specific, auto dealership code to better support new car dealers. I'm really proud to have worked closely with members of the opposition including the member for Fenner on this important issue, and I thank him, particularly for his leadership and determination to see a better deal for franchise car dealers through an industry code, a code that will deliver clear ground rules for manufacturers and dealerships including obligations under the Australian Consumer Law and consumer complaints, warranty and repair processes; and dealership agreements, the ability to make variations to them and termination notices.

The huge contribution that new car dealers make simply cannot be underestimated. I want to bring the attention of the House what this means. In my electorate, this means over $400 million worth of sales, 420 direct employees and a further $100 million contribution to the local economy alone. Nationwide, this means $65 billion in sales, 70,000 direct employees, and a contribution to the economy of more than half a billion dollars. This is a serious industry. I'm delighted that my colleagues will be speaking on this issue today, and I am shocked that members of the government could not even be bothered to speak about this.

To the members in the chamber today, I say to you: these are mum-and-dad dealers in your electorates. This is small-business heartland that the Liberal Party should be taking an interest in. I know people have been lobbying ministers and members of the government, only to be dismissed—to be told to go away. When I addressed the national conference on the Gold Coast, you could hear the frustration in dealers. These aren't big businesses. These are mum-and-dad operators, employing mechanics, employing after-sales services, and employing admin staff—and yet not one member of the Morrison government will give their voice to those businesses in Australia. They couldn't be bothered to rise and use their voice in this debate today. I'm the son of a small-business owner, and I've seen firsthand the impact of what the big players mean, when come in and change the landscape and disrupt. And, as we see is the case now, the little guy is left to fend for themselves while the big players muscle in. The local dealer is known to the community; that's who people rely on to provide them with fair value and a safe car of choice. These are the businesses that support the football clubs, the netball organisations and the community outreach, and provide the vehicles to Meals on Wheels.

Even considering all of this overwhelming data, we know that the dealers need more support to fix the power imbalance. I'm really pleased that, if privileged to be elected, a future Shorten Labor government will give them certainty. I'm proud to stand shoulder to shoulder with dealers, and will continue to work towards fixing this so that more dealers are given the protections that they need and the support they need.