VACC, along with state-based counterparts and national body, the Motor Trades Association of Australia (MTAA), welcomes the Federal Government's commitment to strengthening Franchising Code of Conduct regulations.
The new measures will:
- Increase available penalties under the Franchising Code to up to $10 million
- Transform existing voluntary principles into mandatory obligations under the Franchising Code
- Ensure the Franchising Code keeps pace with changes to business practice, explicitly recognising that dealers operating as a manufacturer’s agent in relation to new vehicle sales are still protected by the Franchising Code.
“This is a decisive suite of reforms for automotive dealerships and the many local businesses, apprentices, charities and broader communities that they in turn support,” said Minister for Employment, Skills, Small and Family Business, Michaelia Cash.
“The Government is fully committed to enacting reforms that are impactful and deliver for the nation and regions where transport is integral for economic and social needs."
Australia’s automotive dealers employ more than 60,000 Australians, including 4,000 apprentices, and contribute more than $12 billion to the economy. The announcement comes after years of industry monitoring and lobbying to have the inadequacies of current competition and consumer laws and the Franchising Code of Conduct revised, in order to address the power imbalance between internationally headquartered car companies, their Australian car dealer networks and consumers.
"Today’s announcement, combined with reforms announced last year securing a specific schedule of amendments to the Franchising Code regulations for car dealers... sets the foundations for fundamental reform of car manufacturer/distributor and dealer relationships," said MTAA CEO, Richard Dudley.
Mr Dudley went on to extend his thanks, on behalf of industry, to Prime Minister Scott Morrison, Employment and Small Business Minister Senator Michaelia Cash, and Industry Minister Karen Andrews for taking on board sector insight in order to develop and secure a comprehensive package of reforms.
Additionally, the Government has announced its intention to continue working with the automotive franchising sector, entering into consultations to ensure appropriate protections for automotive dealerships from unfair contract terms in their manufacturer agreements, and enter discussions regarding a standalone automotive franchising code.
For more information
Prime Minister's media release: Backing Australia's family-owned automotive industry