Coalition abandons playing field on dealerships - Speech, Federation Chamber

FEDERATION CHAMBER, 26 NOVEMBER 2018

I second the motion.

It is one of those things in sport: you at least expect the other side to take the playing field. But today we are seeing the coalition abandon the playing field. If you look at the speaking lists for the main chamber and for the Federation Chamber, it's like they've just given up and gone home, putting their tail between their legs. In the Federation Chamber today we're looking at a list with something in the order of 20 Labor or independent speakers and just a handful of coalition speakers.

Interjection by Milton Dick MP: And they've given up governing.

And they have given up governing, as the Member of Oxley so aptly puts it. It is particularly striking that the coalition has given up governing on an issue such as protecting auto dealers, because the coalition so often like to say they are the party of small business. The fact is that Labor has the stronger claim to that.

At the next election, both parties will go into the election offering the same headline rate of company tax, but, on top, Labor will offer the Australian Investment Guarantee, allowing more rapid depreciation of investments in excess of $20,000. At the next election, the coalition will go to the Australian people without an energy policy, meaning that small businesses are going to face massive uncertainty on the prices of one of their key inputs. Labor will go into the next election with a carefully constructed energy policy which has been commended by the sector. And Labor will go to the next election with a plan to boost wages. We know that retail spending is in the doldrums. One of the reasons for that is that workers haven't had a real pay rise since 2012. Don't just take my word for this. This was Philip Lowe, Reserve Bank Governor, speaking last week about the fact that wages are barely advancing ahead of inflation. So, at the next election it will be Labor that has the more powerful offering for small business.

This brings me to the matter of this important private member's motion. It is the hard work of the member for Oxley that brings us here today, because it is his strong advocacy which has led Labor to make the significant step of saying that under a Shorten Labor government auto dealers will get a better deal. There will be an industry-specific code governing the relationship between auto dealers and manufacturers. We don't take this step lightly. Industry-specific codes are rare. We have them in areas with major market power imbalances, such as the horticulture industry and the fuel-retailing industry. Through our shadow agriculture spokesman, Joel Fitzgibbon, Labor has called for such a code to be implemented in the dairy industry. We've got 6,000 dairy farmers selling to a handful of milk processors and retailers.

We're calling for it in the area of auto dealers because of a report from the Australian Competition and Consumer Commission, which had examples such as the multinational car manufacturer who told 25 car dealers that their franchise agreements wouldn't be renewed, despite the fact that they hadn't broken their agreements and in many cases had been profitable. There are about 3,500 new vehicle outlets, mostly owned by individual operators or family groups. Indeed, car selling is one of the few industries in our economy where the top four firms account for less than one-fifth of the market. But the Australian Competition and Consumer Commission has acknowledged, as they put it:

Commercial arrangements between manufacturers and dealers can constrain and adversely influence the behaviour of dealers in responding to complaints.

So, a Shorten Labor government will implement that industry-specific auto dealership code—an announcement which has already been welcomed. I draw the attention of the chamber to the comments by the CEO of the Australian Automotive Dealer Association, David Blackall:

We believe an industry specific code regulating behaviour between new car Dealers and offshore vehicle manufacturers is necessary to protect consumers, dealerships and their employees. Currently new car Dealers are locked into one-sided agreements with vehicle manufacturers which restrict our ability to run a profitable business and protect our consumers.

It's backed by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, who said:

The power imbalance between vehicle manufacturers and car dealerships is a major issue that is consistently raised with us, in both our dispute support area and our policy work. Manufacturers continue to use their market power to constrain car retailers, which in turn disadvantages customers.

The CEO of the Franchise Council of Australia, Mary Aldred, has said:

The Franchise Council of Australia has welcomed the announcement by the Federal Opposition that if elected it would introduce a separate automotive industry code of conduct.

Putting fairness back into the system lies at the heart of the Labor mission. Australia has too many monopolists and too few start-ups, and that's why Labor is committed to this industry-specific code.

ENDS

Authorised by Noah Carroll ALP Canberra.


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