Media releases

Coronavirus assistance needs to flow to larger businesses

27 March 2020

The Prime Minister’s “business hibernation” announcement on Friday, 27 March has been welcomed in some sectors of the business community, but not by all, says the Victorian Automobile Chamber of Commerce (VACC).

While rental and tax freezes will provide many small and medium enterprises with a necessary respite, many other businesses – like new-car dealers – have been frozen out of assistance thresholds.

“The issue for medium and larger businesses in the automotive industry is that those enterprises are the bigger employers and they are having to let go or stand down higher amounts of staff,” said VACC CEO, Geoff Gwilym. 

Recently, one dealer group in Victoria had let go of more than 400 employees. And it will get worse.

“Medium and large-sized enterprises have costlier rents and bigger outgoings. Federal and State Governments need to protect these businesses as well, along with small-to-medium-sized enterprises. 

“Preliminary survey results show that approximately 70 percent of VACC-member new-car dealerships are missing out on payroll threshold and cash flow assistance. And this was a market that was already experiencing a downturn of almost 12 percent before the Coronavirus situation.

“Logic dictates that because car dealers sell more expensive products that their turnover will be higher. The margins in these cars is almost negative in some instances. Bigger staff levels to service the key operational departments within each dealership means more employees, and more payroll. Dealers shouldn’t be penalised as a result. Big employers are not getting a fair go,” said Mr Gwilym.

“VACC is asking Mr Morrison – when he meets with Treasurer Josh Frydenberg over the coming days to establish the ‘fine print’ of the assistance package – to consider the enormous contribution larger businesses make to the economy and that the Federal Government offers appropriate assistance at this very difficult time.”

ENDS

VACC remains in close contact with its members and, with dedicated in-house industrial relations and workplace safety teams at hand, is well placed to provide the best advice to its members.