Policy and Agenda Highlights as at 30 June 2021

Access to service and Repair information 
In late 2020, the Federal Government provided Draft Legislation to mandate motor vehicle service and repair information. After over 10 years of lobbying by the MTA WA and our National Body, the MTAA, the Legislation finally passed through Parliament in July 2021.
To support the implementation of the Legislation, the Federal Government also agreed to create an industry-led entity, consisting of the five peak automotive sector organisations in the MTAA, FCAI, AADA, AAAA and AAA, who will be responsible for overseeing the process. The Federal Government has also announced a one-off grant of a quarter of a million dollars to assist in establishing systems to operationalise the Legislation.

Work is underway with the establishment of the Scheme Advisor (industry-led entity) and Scheme Rules in readiness for the start date which is on track for 1 July 2022.
MTA continues to provide industry leadership to progress initiatives by conducting a roundtable workshop of the five organisations with an independent facilitator.

Additional Franchising Code reforms
Additional changes sought to the broader franchising code are also progressing through the Australian Parliament.
The MTA WA, through the MTAA is actively involved in consultations with a specially convened government task force to examine the recommendations arising from the Joint Parliamentary Committee inquiry into Fairness in Franchising. Legislation pending, we have secured significant changes, including:

  • Increase disclosure and for car dealers specific detailed disclosure.
  • Increase penalties for noncompliance.
  • Identify new pathways for multi-franchise dispute resolution.
  • Increase and improve disclosure requirements and prohibition of requiring capital expenditure except where it has been pre-disclosed before entering an agreement is legally required or agreed to by the franchisee. A business justification statement will no longer be enough.
  • Increase specificity for disclosing the circumstances under which the franchisee is likely to recoup expenditure (read tenure).
  • Make changes to specifying the amount, timing, and nature of expenditure.
  • Enhanced requirements on the treatment of cooperative funds used for marketing and advertising.
  • Introduction of improved cooling-off periods.
  • Potentially address clarification on goodwill entitlements in end-of-term arrangements.
  • Provide a more significant focus on breaches of restraint of trade.
  • Prohibit legal costs from being passed on unless incorporated in a joining fee.
  • Improve dispute resolution processes.

Following the Schedule of Amendments introduction, the MTA WA will continue to advocate for other matters, including compensation, dispute resolution, and tenure. MTAA was instrumental in developing industry-led principles to outline expected requirements and conduct in car manufacturer/dealer relationships and is seeking incorporation of these into the Schedule of Amendments.

MTA WA continues to work on incorporating other motorcycle and farm and industrial machinery franchise operations into the reforms.

Class Exemption for Collective Bargaining
The Australian Competition and Consumer Commission (ACCC) approved class exemption for collective bargaining in October 2020.  This followed calls by members and the industry for improved and simplified access to collective bargaining processes as a step in providing more options for small businesses to address power imbalances evident in several automotive sectors. 

Beneficiaries of this exemption include franchised car, farm and industrial machinery and motorcycle dealers and mechanical and motor body repair businesses.
These changes are of particular interest for the body repair industry who daily deal with unfair power balances in their dealings with insurance companies. 

Improved clarification of major versus minor faults
During 2020, the MTA WA continued to provide input to the Council of Consumer Affairs Ministers and Government departments on the need to clarify definitions of major versus minor failures as they impact consumer guarantees and manufacturer/dealer accountabilities. MTA  WA has also been advocating for improved clarity in Australian Consumer Law on the definition of 'distributors' as the inclusion of car dealers is considered misplaced leading to confusing accountability and poor consumer outcomes.

Unfair Contract Terms and Conditions
MTA provided additional submissions and suggestions on extending Unfair Contract Terms to car, motorcycle, body repair and farm machinery dealer franchisees.
The Council of Consumer Affairs Ministers determined to make unfair contract terms illegal with Legislation expected to pass through the Australian Parliament in 2021. This will have a significant impact on auto industry relationships and contracts, particularly with dominant market players. 
It is anticipated that this will greatly assist body repairers with their negotiations with insurance companies who traditionally hold the balance of power when issuing contracts to repairers.

Mandating the Motor Vehicle Insurance and Smash Repair Industry (MVIRI) Voluntary Code of Conduct
MTA continued to prepare for formal applications to the Commonwealth Government to mandate the MVIRI Code of Conduct.
By achieving the broader policy requirements of Class Exemption for Small Business to Collectively Bargain, changes to Unfair Contract Terms and Conditions (including making unfair terms illegal), other changes to Australian Consumer Law and the Insurance Contracts Act, MTA has now achieved the necessary foundations to mandating the MVIRI Code.

In addition, three jurisdictional inquiries into the motor vehicle insurance and smash repair industry in NSW, WA and SA, has provided evidence and recommendations supporting mandating the Code at a national level. Of importance is testimony provided by dominant car insurers to these inquiries of support to mandate the Code.

MTA provided a submission to the Parliamentary Inquiry and appeared as a witness before the committee to support Member MTA-SA and the Australian Motor Body Repair Association (AMBRA) to secure a mandated Code of Conduct in South Australia.
This preparation will significantly focus MTAA efforts to have the Code mandated nationally in 2021/22.

Industry skills shortage, Skilled Migration and overall personnel shortage  
Automotive Industry skills shortage is not a new problem, and in fact, the industry has been experiencing this problem for over 15 years but exacerbated by the COVID-19 pandemic and the resultant border closures, demand for labour far outstrips supply. MTA WA has been working at both a state and nation level in order to ensure automotive is considered as a priority skill and therefore added to the priority skills list to enable migration of skilled people for services across the automotive sector. The MTAA was the only automotive industry present at the joint standing committee hearing held in Canberra.

Continued to provide support amongst COVID19 lockdowns and support packages  
MTA WA has led the way in ensuring that our members receive the most current and accurate COVID 19  information on lockdowns and relief measures provided by the Government. With direct access to the highest levels of Government we are able to provide the latest updates in this ever-changing world and provide clarity to our members to assist them to maintain business continuity.

By utilising our electronic direct mailing infrastructure and website facilities, the MTA WA has been able to rapidly distribute and publish the most up-to-date and relevant information, in most cases well before other industry bodies. The availability and accessibility of information and business collateral have proven to resonate throughout the state, with MTA WA branded signage and information posters being displayed across businesses in all regions.

Consignment sales
The MTA WA consulted with members to gain feedback on the State Government’s proposal to remove consignment sales in WA. The MTA WA provided a submission supporting the continuation of consignment sales, with the proviso that those within the industry doing the wrong thing are penalised. Consignment sales in luxury vehicles, caravans and heavy vehicles are considered essential for many businesses to remain viable. The submission also highlighted the fact that consumers often drive the demand for consignment sales and to remove this ability will be detrimental to those using the service. The MTA WA will continue to work with the regulator to provide a workable solution to ensure consumers are not at risk when using this service and will ensure those businesses that rely on consignment sales stay up to date with any changes as they occur.  

Tyre ageing policy
Currently in WA, tyre age is largely ignored, with current Legislation not requiring tyres to be replaced due to age, rather relying on wear as the determining factor. The fact is that tyres in excess of 10 years are dangerous, and there is a need to have a policy in place to better manage this critical component of vehicle safety. The WA Tyre Dealers Association (WATDA) Committee, through extensive consultation with stakeholders, has developed an aging tyre policy, setting the used by date of a tyre at 10 years from the date of manufacturer, although some conditions apply. The policy has gained support from some tyre manufacturers that supply into Australia, and the tyre committee will continue to work with manufacturers to gain majority support for the policy. The tyre policy has been distributed Nationally, and we will seek approval for the policy from the states and territories in late 2021.  The MTA WA has worked with the Road Safety Commission to develop short videos on Caravan safety that include messages regarding tyre safety and age. The videos can be found on the Road Safety Commission website. MTA will continue to work with the regulators and Road Safety Commission in order to raise awareness of tyre safety and age.

Removing emission devices
MTA WA members alerted the MTA WA of a growing issue with a number of businesses removing emission devices as a means of improving the performance of a vehicle and advertising these services through social media. This practice is illegal, with the removal of omission devices only allowed under approval by the regulator. The 4WDIA Committee developed and approved an article to be published in the Motor Magazine, which is designed to educate and improve awareness of the legal requirements regarding emissions devices. There does seem to be a misconception in the industry that because Australia isn’t ‘up-to-date’ on the latest emissions standards that these devices do not need to be fitted. However, this is far from the truth, and the MTA WA will continue to advocate to address this issue.

PBS review on tyres
The issues regarding the testing and rating system for tyres to be used on a Performance-Based Standards (PBS) applications had been raised during several of MTA WA sectors committee meetings. The MTA WA, through our heavy vehicle sector committee the Commercial Vehicle Industry Association of Australia (CVIAA) have been working with the National Heavy Vehicle Regulator (NHVR) on improving the application of tyres within the PBS process and have supported the standardised or control tyre system that was proposed, CVIAA recognises the work Les Bruzsa and other have done in this space. The changes will be a direct benefit to manufactures and retailers of vehicles, trailers, tyres and give flexibility to Australia’s heavy vehicle fleet operators. PBS vehicle will soon be able to use a broader range of tyres, encouraging the take-up of safer, more productive vehicles in the Australian heavy vehicle fleet.   

HV licensing process call for improvements
The MTA WA has consulted with the Department of Transport WA during the reporting period to seek improvements to the current process of licensing heavy vehicles. The MTA has determined  that it cost the heavy vehicle industry more than $3.3 million a year as a result of lost time and money spent licensing heavy vehicles. The current process in WA is inefficient and involves double handling of information. The process is also inconsistent with other jurisdictions around Australia. The MTA and Department of Transport WA have committed to reviewing the current process and to identifying practical solutions that will lead to improvements for the heavy vehicle industry.     

Submission on safer freight vehicles discussion paper
The MTA WA, through its CVIA members provided feedback on the Safer Freight Vehicles Discussion Paper led by the NHVR, highlighting some of the concerns with the proposed safety initiatives to be mandatory on HV trailers over 2.5mts wide. CVIAA acknowledges the benefits of allowing additional width vehicles to the Australian market and has long supported the harmonisation of vehicle widths that will allow for additional safety features and productivity gains.      

Road Vehicle Standards Act implementation (RVSA)  
Whilst the RVSA implementation was delayed because the industry raised several issues of its inception, it will now transition from July 1 2021 with full compliance with the RVSA from July 1 2022. CVIAA again has raised some real concerns with the RVSA software platform called ‘ROVER’ and whether or not the system is fit for purpose. The RVSA requires mandated retesting of locally manufactured components to obtain a new Component Type Approval (CTA) number. CVIAA calculates it would take up to five years for all locally manufactured components to be retested – and at exorbitant cost. This puts local manufacturers at an immediate disadvantage, as overseas suppliers with an Economic Commission from Europe (ECE) approval are instantly accepted without the need for retesting.