Julian Simmonds (Ryan, Liberal National Party) Share this | Link to this | Hansard source

It's a pleasure to round out the day today on an issue that I am particularly passionate about. We've heard in the media previously, over a number of months and sometimes years, of some particular horror stories when it comes to franchising. The government has moved quickly of course to assist franchisees, where there is an imbalance, an out-of-level playing field, when it comes to these kinds of franchising arrangements. But I want to talk specifically about an industry that employs close to 600,000 Australians, with revenue in excess of $182 billion. So the industry is significant for our economy and they make a significant contribution. Often these businesses are family businesses—they're mum and dad operators—and often they have been in this particular business, amongst the family, for years.

The businesses I'm talking about are local car dealerships. I understand that perhaps car salesmen are not the most popular people—in fact, sometimes they're about as popular as politicians! But, like us, they can certainly be misunderstood sometimes. As I said, these local dealerships are normally franchisees. They're normally mums and dads, and they've been operating in these arrangements for many, many years.

In my own electorate of Ryan, we have 16 different dealerships providing almost 300 local jobs or $25 million in wages. They contribute $10 million in tax from the Ryan electorate alone and a total economic contribution of over $61 million a year. These dealerships are often iconic. Local residents know them by name. Generations of families have bought cars from them. They sponsor the local team. They sponsor the local school fete. They give back to their community.

Global car companies rely on these local dealers to distribute their product and for the ongoing services and maintenance and recalls and so on. For the privilege of representing that manufacturer, the local dealer must invest significant capital in facilities, stock, equipment and training, and this relationship, in order to work, must be mutually beneficial.

I've had many conversations with local car dealers in my electorate and, unfortunately, I've become aware that, while some dealerships are operating with these global manufacturers in a very positive way, in some instances this relationship is not one where there is a fair and level playing field. In some instances, manufacturers—often, powerful multinationals with overseas head offices—are putting these local mum and dad operators to the squeeze. Local dealers are having to put up with unrealistic and non-transparent sales targets. They're asking dealers to invest significantly in facilities—so much so that it becomes near impossible to recover those costs, particularly if the dealer agreement they have is too short to recoup the significant capital investment that they are being asked for. Dealers face being terminated without reason and without minimal notice. There's even pressure being placed on dealers not to honour Australian Consumer Law rights—something which of course they push back on.

The Morrison government, I'm pleased to say, through the Minister for Industry, Science and Technology, the Hon. Karen Andrews MP, alongside the Minister for Employment, Skills, Small and Family Business, Senator the Hon. Michaelia Cash, quite a few months ago announced that we would be seeking to reform the new car retailing sector. On this side of the chamber, we believe that if you have a go you get a go, and we want to make sure that these businesses do get a fair go. We believe that these business owners—and of course all business owners—know best when it comes to running their businesses. That's why we're listening to these business owners and working with them, and, after consulting with the industry, we'll be looking at ways to ensure that these arrangements are more transparent, fair and cooperative.

We've heard of franchisees who have got themselves in trouble. They've been locked into agreements with franchisors who are seeking large marketing budgets and costs, where they don't have the flexibility that they need in order to run their business appropriately and are locked into sales targets they can meet in the good times but simply can't meet in the tougher times.

The Morrison government has heard concerns and looked at other examples elsewhere in the retail sector. It has heard the specific concerns of those in the new-car dealership sector. We're committed to creating a level playing field. The reforms that the Morrison government is looking at will provide more transparent and cooperative end-of-term and capital expenditure arrangements between the two parties. We hope that these changes will strike an appropriate balance between the concerns raised by new-car dealers and the flexibility that car manufacturers require to manage their dealer networks. In particular, I want to see a focus on addressing any potential power imbalance that leads to dealers carrying costs or targets that may be unreasonable, or any potential power imbalance that leads to dealers having to invest significantly in state-of-the-art facilities to showcase new vehicles without the guarantee of a reasonable time frame to recoup that investment.

Whilst there is concern, I want to make it clear that the majority are doing the right thing. But these reforms will ensure that there are consequences for those who are not. They'll put us into a similar situation as other countries overseas. Even the US, the home of the automobile, has legislation in place to make sure that these agreements between local car dealers and the large multinationals who run these operations are fair and balanced.

So let's get on with this. Let's get on with this important reform that is required to protect some of our most community-conscious local businesses and some of our most iconic local businesses—family businesses that are often the heart and soul of their communities. These are the kinds of businesses that I am always happy to take up the fight for. I am pleased that the Morrison government is looking at these reforms so that it can provide them with support. I again thank the ministers who are involved and look forward to working with the industry and those ministers to see it progress forward.

With a little bit of indulgence from you, Deputy Speaker Gillespie: noting that I have a little bit of time left, I want to take the opportunity in this chamber to wish my lovely wife a very happy 30th birthday on 13 March. The 30th birthday is a milestone for anyone, and it's a significant milestone for our family. A very happy 30th birthday, sweetie; I am pleased that I am able to recognise it for you in this place.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The time for the grievance debate has expired. The debate is interrupted in accordance with standing order 192B. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.

Federation Chamber adjourned at 18:13