Following the introduction on 12 March of a suite of proposals to reform the automotive franchising sector, the government is now requesting feedback from small businesses on further reforms to the industry in response to the release of a new discussion paper.
The new consultation requests stakeholder views on the merits of instituting an automotive franchising code of conduct and options to achieve mandatory binding arbitration.
The paper also seeks evidence to support expanding protections for new vehicle dealerships to other parts of the automotive sector.
Exposure draft legislation to protect automotive dealerships from unfair contract terms in their agreements with manufacturers is also expected to be released soon for consultation.
The discussion paper was released by Stuart Robert, Minister for Employment, Workforce, Skills, Small and Family Business, who said the reforms attempt to protect Australia’s family-owned automotive businesses and their employees from the growing power imbalance with multinational car companies.
The government made amendments to the Australian franchising code of conduct on 1 July, following a parliamentary inquiry report on the effectiveness of the code.
Mr Robert noted that the franchising reforms were significant for small businesses, including auto retailers.
To adequately protect automotive franchises, further feedback was now needed, he said. This includes the possible introduction of a standalone automotive franchising code of conduct.
“Now, the Morrison government is seeking feedback from family-owned automotive businesses and their employees to understand the extent of other potential issues in the sector and the possible need for further reform to contribute to providing a level playing field for automotive dealers and manufacturers,” Mr Robert said.
“The Morrison government is delivering reforms to help ensure a fair go for dealers that employ more than 60,000 Australians, including 4,000 apprentices, and contribute more than $12 billion to the economy.”
Responses to the paper will be accepted through 13 September.