The Motor Trades Association of Australia (MTAA) is urging the Australian Government to introduce stronger protections against unfair trading practices affecting small businesses, warning that thousands of automotive enterprises are being subjected to conduct that undermines investment, jobs, training and competition.
In its submission to Treasury’s consultation on Unfair Trading Practices Protections for Small Businesses, MTAA has presented evidence that unfair conduct is widespread across Australia’s automotive retail, repair and service sector, affecting businesses that operate every day in local communities across the nation.
MTAA Executive Director Bruce Billson said reform was overdue and should be designed to address genuine harms while maintaining certainty for businesses.
“Australia’s automotive businesses are overwhelmingly small and family owned. They are often dealing with much larger organisations that control access to products, parts, customers, work or critical commercial relationships,” Mr Billson said.
“When there is a substantial imbalance in bargaining power, the risk of unfair conduct increases, as the less powerful business is subjected to ‘too sharp by half’ conduct from the dominant business simply ‘because they can’. The result is reduced profitability, delayed investment, fewer apprenticeships, lower business confidence and, ultimately, fewer choices for motorists.”
MTAA’s national member survey found that 87 per cent of respondents had experienced conduct they considered unfair, unreasonable or harmful during the past three years, while more than half reported direct financial losses. Many businesses reported reduced profitability, lost revenue and significant impacts on business growth decisions.
The submission highlights a range of concerns raised by automotive businesses, including:
> unilateral changes to prices, margins, rebates and trading terms
> warranty underpayments and reimbursement disputes
> late payment and the withholding of payments
> unrealistic performance targets and commercial conditions
> retaliatory behaviour when businesses seek to exercise their rights
Mr Billson said the current legal framework leaves too many businesses carrying costs and risks that should not fall on them.
“Good businesses should not be penalised simply because they lack the market power, realistic avenues for redress or financial resources to challenge unfair conduct.
“The objective of these reforms is not to interfere with legitimate commercial decision-making. It is to ensure businesses cannot manipulate or distort commercial relationships in ways that cause unreasonable harm to smaller operators.”
MTAA has also argued that all franchisees should be protected by the reforms, regardless of their size, noting that the power imbalance inherent in franchise arrangements does not disappear simply because a franchisee grows beyond a prescribed threshold.
MTAA supports an evidence-based and carefully targeted approach, including clear legislative drafting, practical guidance, appropriate enforcement mechanisms and strong safeguards against unintended consequences.
“Fair trading should not depend on who has the deepest pockets or the strongest negotiating position,” Mr Billson said.
“Australia’s small automotive businesses deserve a fair go, and these reforms are an important opportunity to strengthen confidence, competition and fairness throughout the economy.”
Read MTAA’s submission here: Advocacy & Policy | Motor Trades Association of Australia
ENDS
Media contact
Andrew Molloy
Manager, Marketing & Communications
Victorian Automotive Chamber of Commerce
P: 03 9829 1248 | M: 0457 188 375 E: amolloy@vacc.com.au
