The ink is barely dry on the franchising reforms introduced on 1 July this year, and already we have an automotive franchising code discussion paper considering further reforms for the automotive sector.
Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, today released a discussion paper to seek views on the merits of a standalone automotive franchising code of conduct and options to achieve mandatory binding arbitration for automotive franchisees.
The paper also seeks evidence to support expanding protections for new vehicle dealerships to other parts of the automotive sector.
Minister Robert said the discussion paper builds on the reforms to the Franchising Code of Conduct introduced on 1 July this year.
‘Now, the Morrison Government is seeking feedback from family-owned automotive businesses and their employees to understand the extent of other potential issues in the sector and the possible need for further reform to contribute to providing a level playing field for automotive dealers and manufacturers.”
Dealers employ more than 60,000 Australians, including 4,000 apprentices, and contribute more than $12 billion to the economy, he said.
The discussion paper is available at https://treasury.gov.au/consultation
Stakeholders are invited to provide a submission to [email protected] by 13 September 2021.
In response, the Federal Chamber of Automotive Industries CEO Tony Weber has said the paper fails to consider the interests of the Australian consumer.
“The Government describes its franchising reforms as having already delivered ‘big wins’ to dealers, but
where there’s a winner there’s also a loser – and in this case it’s the Australian consumer,” said Weber.
“Automotive franchising is a consumer issue, not an industry protection issue. It should focus on
providing consumer choice not dealer protection at the expense of all others. Regulation should
encourage innovation and flexibility for business, not leave it anchored in the last century.”
Weber suggested any further regulation to Australia’s already extensive competition and franchising rules would serve only to stifle industry innovation.
“Over-regulation will not protect the industry but what will is a choice of sales models, better service and
competitive pricing.
“The FCAI looks forward to working with industry stakeholders and the Federal Government on this
important issue,” Weber said.
Before the implementation of the latest reforms on 1 July, Bruce Billson, Australian Small Business and Family Enterprise Ombudsman, said the proposed amendments represented “significant progress” that would significantly level the playing field in the automotive franchising sector.
“The changes that apply to the automotive industry are welcome as is the Government’s commitment to continue working with the automotive franchising sector to examine unfair contract terms in their agreements,” Billson said in March 2021.
