Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

I rise to speak on the Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021 and I move the second reading amendment that has been circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that the Government's unnecessary delays in delivering a level playing field for independent mechanics have hurt small businesses and consumers".

It was Mother's Day 2018, at JAX Tyres in Essendon, when the former Leader of the Opposition and I announced Labor's 'Your car, your choice' policy. We announced that, following the Australian Competition and Consumer Commission's 2017 report—its New car retailing industry market studyLabor would put in place a mandatory code requiring manufacturers to share with independent mechanics the information they need to fix modern cars. We did so because it became clear in 2018 that the voluntary code wasn't working. The voluntary code had been put in place in 2014 and required manufacturers to share with independent mechanics the data they needed to fix modern cars. But mechanics simply weren't getting the data they needed.

Visiting a vast number of independent mechanics, I would often ask them which manufacturer was best. I would get different answers. They would say, 'Well, sometimes this one's okay and sometimes that one's okay.' But, as Stuart Charity from the Australian Automotive Aftermarket Association put it, their industry was sometimes having to use workarounds that might take them four or five hours to find the information for an issue that they should have got in 10 to 15 minutes. Mr Charity said that sometimes cars are towed back to the dealership just to have a five-digit or six-digit pin code put in. He also said that it just doesn't make sense and it's not a level playing field.

So, in 2018, Labor flipped the script. Where Australian politics normally sees the government in the front seat and the opposition in the back seat, we flipped those roles, took the wheel and took leadership on making it clear that Australia needed a mandatory code. We did so because it was in the interests of independent mechanics—23,000 of them, compared to just 3,500 dealers. Most Australians get their cars fixed at independent mechanics. But independent mechanics are increasingly finding that they don't have the tools to fix a modern car. If you've spent time in a mechanic's workshop recently, you'll know that much less of the work is done by swinging a large bit of metal against another large bit of a metal and a whole lot more of the work is done through scan tools: plugging in or connecting—sometimes by bluetooth, or wirelessly—to upload or download information. Often what your car needs isn't a bang with a hammer; it's an upgraded software patch. But if the independent mechanics don't have those new software patches, then they can't fix modern cars. And that's increasingly what we're seeing as cars are becoming computers on wheels.

This is an issue across Australia, but it's an issue particularly in regional and remote Australia. When I visited Island Auto Repairs in Bongaree on Bribie Island, I learned about the many residents of Bribie Island who are older and don't feel comfortable driving their cars off the island. They're comfortable on the island—the traffic's a little slower and people go a little easier—but they don't go over the bridge to the mainland. The trouble is that there are no authorised dealers on Bribie Island. If you've got a car whose manufacturer won't share data with Island Auto Repairs, you face an invidious choice: either you don't get your car fixed or you take a dangerous drive that you don't want to do. So, for Island Auto Repairs, it's critical that they get the data they need to fix modern cars.

It's a huge issue in regional Australia. Many regional areas don't have authorised dealers and, therefore, people are forced to drive tens or hundreds of kilometres to get to an authorised dealer. It's also an issue of affordability. Many Australians like to get their car fixed at a mycar, a JAX, an Ultra Tune, a Bridgestone or a Pedders—or, indeed, at a non-chain independent mechanic, such as Island Auto Repairs in Bongaree. Those independent mechanics tend to be cheaper—one study said that they were, on average, 25 per cent cheaper—and they have the right to be able to compete for business along with authorised dealers. But they can't do it if they don't get the data they need.

Having made this announcement back in 2018, we didn't immediately see the coalition jumping on board. You'd expect that an announcement of this kind would receive bipartisan support. After all, Labor's policy flowed from the Australian Competition and Consumer Commission's independent report. It was backed by not only the Automotive Aftermarket Association but also the Australian Manufacturing Workers Union, the Australian Council of Trade Unions, CHOICE, the Insurance Council of Australia, the Consumer Action Law Centre, the Capricorn Society, the Business Council of Co-operatives and Mutuals, and IAG. We also saw the Australian Automobile Association backing the policy, including members such as the NRMA, the RACQ and the RACV. All of these organisations recognise the benefits of a level playing field in car repair. They recognise that, as cars become more computerised, it is essential for independent mechanics to have that downloadable data.

The government have moved at an incredibly slow pace. They have been stuck in a slow gear and for years they had the handbrake on—let's be honest—so this bill is greatly welcomed. It would not be happening were it not for Labor's advocacy, but it's happening much too late. Independent mechanics have gone to the wall waiting for this policy and are unable to fix cars that are brought into their workshop for want of software upgrades or a PIN. By the time this scheme takes effect on 1 July 2022 it will have been five years since the Australian Competition and Consumer Commission handed down their report and it will have been more than four years since Labor announced our Your Car, Your Choice policy.

I would like to acknowledge the many people who have worked to make the case for these reforms, including Angelo from JAX Tyres in Essendon—one of our first visits to mechanics—Kelly from Island Auto Repairs on Bribie Island, and many of my parliamentary colleagues, including Anne Stanley, Milton Dick, Murray Watt, Lisa Chesters, Shayne Neumann, Matt Keogh, Susan Templeman, Catherine King, Ged Kearney, Joanne Ryan, Josh Wilson and Peter Khalil, among many others. I note that the speaking list presently contains many more Labor members than coalition members, reflecting Labor's strong advocacy on this issue. I see the names Thistlethwaite, Payne, Wilson, Dick, Templeman and Murphy on that list, as well as Jones and Keogh, but only three speakers on the coalition side. It reflects the fact that Labor is very serious about a level playing field for independent mechanics.

I also want to acknowledge the important work done by the Australian Automotive Aftermarket Association—the vital advocacy of Lesley Yates and Stuart Charity in making a strong case to Labor and to the government for these reforms. I also acknowledge Geoff Gwilym and John Khoury from the Victorian Automobile Chamber of Commerce; the Capricorn Society and Melina Morrison; the Business Council of Co-operatives and Mutuals, of which the Capricorn Society is a member; and Elyse Keyser from the AAAA for supporting a range of MPs' visits. Apparently, the Australian Automotive Aftermarket Association facilitated some 75 visits by members of parliament to independent mechanics. That huge amount of work was facilitated to a large extent by Elyse Keyser. There was the work of the Australian Automobile Association, specifically Craig Newland and Jason Smith, and the Australian Automobile Dealer Association and their CEO, James Voortman. People originally thought that the Australian Automobile Dealer Association would oppose this change, but they didn't. It is a credit to that great organisation for deciding there was enough work to go around for everyone—there was a role for independent mechanics and a role for authorised dealers.

Authorised dealers have had their challenges in dealing with the multinational manufacturers. Labor took to the last election a policy for an industry-specific franchise code to deal with the power imbalance between multinational manufacturers and dealers and the fact that dealers will often put a huge amount of investment into a dealership only to suddenly find their agreement with the manufacturer rescinded. These dealers play a vital role. Holden dealers in particular were not treated well by General Motors in recent times.

I acknowledge the Motor Trades Association of Australia and their CEO, Richard Dudley. I also acknowledge all of those independent mechanics whose workshops we visited. I should also mention a few more of my colleagues—Julie Owens, Deb O'Neill, Milton Dick, Michelle Rowland, Lisa Chesters and Pat Conroy. The fact that I am constantly adding to my list of Labor MPs who have backed this reform does reflect how strongly this side of the House feel about this bill today.

The bill will require that manufacturers offer to supply information used for conducting diagnostic services or repair activities in relation to certain vehicles to all Australian repairers and registered training organisations. The registered training organisations piece is important too. Apprentices working for independent mechanics will get better training as a result of access to this data, and registered training organisations need to be able to train young mechanics in using the scan tools and to do the software upgrades that are so essential to maintaining a modern car. Manufacturers will be required to charge no more than the fair market value for the information—independent dealers don't want it for free, but neither should they be overcharged—and the information covered by the scheme will need to be supplied immediately once the repairer has paid the agreed price.

One issue that has been discussed between the Australian Automotive Aftermarket Association and Treasury is around how independent mechanics will be able to update the digital service records of cars they work on. I understand that some resolution has been reached on this issue, the issue of so-called electronic logbooks. Minister Sukkar has undertaken to direct the so-called scheme manager to initiate a process of consultations between Treasury and stakeholders to find a satisfactory solution for this issue, and that will sit alongside the legislated framework in this bill.

From my discussions with the minister, I understand he is going to make some formal statement to the House to that effect, which will give a great deal of confidence to the industry. If you can fix the car but you can't update the electronic logbook, then customers will, of necessity, feel as though the work might not have been completely done. It would be as though the dealer had the keys to the glove box and told the independent mechanics, 'Sorry, only we can unlock the glove box and write in the back of the manual that the service has been done properly.' No-one would think that was a reasonable solution, and I hope we are able to deal with the parallel digital issue so that independent mechanics, having downloaded the right software patches, having done the service, are able to update the logbook or the digital service record, as it's known.

This is a very good bill. It is also a bill which has come very, very late. We should have been having this debate years ago. We made our announcement on Mother's Day in 2018. The member for Maribyrnong said he had a Mother's Day present for the coalition. They could steal our policy, take it straight into the parliament and get it done. If they had done that, then more money would be in the pockets of Australian customers. The 17 million Australian car owners would be better off. The 23 million independent mechanics would be better off. The 150,000 to 200,000 people who work in that industry would be better off. It is a shame that it has taken so many years to come to this point, but Labor support—nay, we champion—this reform. We will be pleased to see it implemented as soon as possible.

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

Is the amendment seconded?

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

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

The original question was that this bill be now read a second time. To this the honourable member for Fenner has moved, as an amendment, that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the words proposed to be omitted stand part of the question.

David Coleman (Banks, Liberal Party, Assistant Minister to the Prime Minister for Mental Health and Suicide Prevention) Share this | Link to this | Hansard source

I am very pleased to speak in support of this bill, the Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021, as brought forward to the House by Minister Sukkar, which addresses a very important issue in terms of the access to information for independent repairers in the automotive sector.

Of course, in the automotive sector in Australia, there are a wide range of business models. There are dealers who are affiliated with particular manufacturers, and there are also a large number of independent repairers. It is very important that those independent repairers, who are so critical to the communities that we all represent, have access to the information that they need, because the playing field needs to be level. It's really important that a car dealer in a local community is not disadvantaged by a lack of information about specifications or approaches to specific repairs. That's what this bill will address. This bill will ensure that those independent repairers have access to the information that they need.

So while there's a very important benefit for repairers, there's a really important benefit for consumers as well. This is about a more efficient marketplace. When you make information more available, you allow more people to compete. When more people can compete in the market, you get more competition, and more competition means better pricing and better services for consumers. We don't want to have a situation where independent repairers are, effectively, priced out of the market by a lack of information or put in the position where, because they don't have that information, they are required to follow a more inefficient process than other dealers.

This is about a level playing field. It's about ensuring that independent dealers have access to the information that they need so that they can provide a quality service to Australians right around the country. It's a pro-competition reform, it's a pro-consumer reform, and it's a very positive thing for the car industry in this country. I commend the bill to the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

The Morrison government has, for too long, put a handbrake on delivering a level playing field for independent mechanics. Not only has that held back small businesses in our nation; it's also meant that consumers have been left worse off. This bill, the Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021, is intended to promote competition between Australian motor vehicle repairers and to help establish a fairer playing field for independent operators competing with large dealerships. But why has it taken the Morrison government so many years, and why has it moved so slowly, to implement this scheme, particularly after the voluntary data-sharing obligations the government put in place in 2014 proved to be a failure? For a number of years now, Labor has been campaigning for this reform, visiting independent motor mechanics in local areas throughout the country and hearing their stories about the difficulty that they have in accessing data from the large car dealerships and accessing the codes that are vital to repairing vehicles, most of which, in these modern times, have complicated computer systems.

This is about supporting small businesses. Many of these independent mechanics have three or four mechanics operating with them. They're part of Australian culture, in many respects. I think every Australian motorist understands and knows that they deserve the right to have their car serviced by their local mechanic. Let's face it, we're not experts on cars—very few of us are—and how they operate. You want someone that you can trust. The member for Mackellar might know how to fix a V8 Holden Commodore, but, I tell you what, most Australians don't. They want to know that they can trust the person that they're getting to repair their vehicle. That was the beauty of the local suburban mechanic. A relationship was built up over many years. In many respects it was handed down through families. Once you got a drivers licence you tended to go to the mechanic that your parents went to because there was a trust relationship that had been established over many years, and it was handed down through generations. What was going on in the industry was risking that because people were, in some respects, being forced to go to the dealerships that they bought the cars from. They were certainly encouraged by the dealerships on the basis that, 'Only we can do the repair for you because we're the holders of the patent, we're the ones that developed the technology and we have the codes to repair that vehicle,' when that wasn't true. It is actually illegal to force someone into the position of taking up their repairs on an ongoing basis with the dealer.

This has been something that Labor has been trying to break down for many, many years. We have been campaigning to support those local vehicle repairers to ensure that we are not only protecting jobs in that industry, protecting those small businesses and providing them with a fair playing field, but also promoting apprenticeships because most of the apprenticeships in the automotive industry will go to people at a local level through their local car repairer. That is a great thing for our nation, and we wouldn't want to see that broken down by the advances that we have seen in the technology associated with vehicles. This bill does deal with that issue. We're thankful that the government has agreed to Labor's policy on this.

Schedule 1 of the bill amends the Competition and Consumer Act to establish a scheme that mandates all service and repair information be provided to car dealership networks and manufacturers, and preferred repairers be made available for independent repairers and registered training organisations to purchase. So they are not being asked to give away their intellectual property. The mechanics will pay a fair price for it, but it's about ensuring that they're not excluding mechanics from receiving that information. Labor has been calling for independent mechanics to get access to the same technical information which car manufacturers make available to their authorised dealers and preferred repair networks. We pushed this reform because it won't only deliver savings to drivers, who will have better choices, more choices and easier access to repairs, but will also create a level playing field of independent mechanics who will be able to stay in business as a result. A genuinely competitive market for motor vehicle services and repairs relies on all repairers having fair access to the information they require to safely carry out the tasks on customers' vehicles. The benefits consumers get are both through increased choice and through price competition.

There is also an issue here, I think, of the speed of repairs. If you do severe damage to your car and you completely break down, you want to get it repaired as quickly as possible. Often, if you are in those dealerships to get in to get something repaired, there is a waiting list well in excess of a week. If you have a trust relationship that you build up with your local mechanic, you know that they can probably come and pick that car up that day and get it repaired as soon as possible. The benefits through this are not only with that price competition but also with that increased choice. As motor vehicles become increasingly technologically advanced, the information required to safely undertake those tasks increases.

Manufacturers of vehicles generally distribute the majority of the information exclusively to their dealership networks unless they choose to make it available to independent repairers. But the car manufacturers have in many respects run a protection racket on this information by encouraging, and in some cases almost forcing, motorists to have their vehicles repaired through their dealerships. That, of course, pushes up prices for car services and limits the ability of independent mechanics to grow their businesses and generate more jobs. Whether you own a Toyota Corolla or Ford Ranger, you should be able to choose where you get your car serviced. That's why we have pushed for years to have a scheme that will require car manufacturers to share technical information with independent mechanics on commercially fair and reasonable terms with safeguards that enable environmental safety and security related technical information to be shared with the independent sector.

The arrival of a legislated solution to the market imbalance created by restrictions on service and repair data access has been celebrated by the independent sector. However, this bill doesn't resolve concerns about how independent mechanics will be able to update the digital service records of the cars they work on. To address this concern, the minister has undertaken to direct the scheme manager to initiate a process of consultation between Treasury and the stakeholders to find a satisfactory solution for the issue that will sit alongside the legislated framework in this bill. Given that undertaking from the minister, Labor is satisfied with that element of the legislation as drafted. But it shouldn't have taken the Morrison government this long to take the handbrake off to deliver this level playing field for independent mechanics.

I want to thank the independent mechanics I visited in the electorate of Kingsford Smith, who, on those visits, informed me of the importance of this reform and the challenges they've had accessing data from the big dealerships, and the pressure that that put on them running their small businesses and on the people they employ, particularly those apprentices. I give credit to all the independent mechanics throughout Australia for sticking to their guns on this and for running this important campaign. I give credit to the member for Fenner as well, who led this campaign for Labor, did the consultations and did the work in putting this policy together. It is a great example of Labor putting up a policy and the coalition adopting it. We thank the government for doing so.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I apologise for not being present in the House for my allocated time. However, the fact that the member for Fenner only took 15 minutes to give a 30-minute speech is a demonstration of how special this particular piece of legislation, the Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021, is.

The member for Kingsford Smith makes fun of my mechanical capabilities. I'm reminded of the Seinfeld episode where, he says, every time a car breaks down they open the hood to look for the big on/off switch. I very much relate to that, and I'm sure the member for Kingsford Smith does too. I also agree with the member for Kingsford Smith that the member for Fenner has been consistent and ensured that this issue was brought to the fore of the public policy debate. Much of the credit for this piece of legislation goes to him due to his tenacity on this matter.

It is, however, a matter of shame that what we have here, as the member for Kingsford Smith has pointed out, is market failure. We have asymmetric information and third line forcing occurring, where large overseas car manufacturers are simply denying independent Australian small businesses being able to provide goods and services to Australian customers. They denied them the capacity to do so by ensuring they were not able to download the data available in their cars that would enable those repairers to do that work. That is illegal.

Not only does this bill make sure that that is unlawful and that it stops now; a question this parliament should be asking itself is, 'Why is this law necessary?' The ACCC has all the powers it could possibly want to pursue overseas manufacturers who behave like this and who cause damage to Australian businesses and Australian consumers. I cannot see, looking at the competition act, how this is not a textbook definition of third line forcing. I cannot understand why it is that the ACCC will pursue newsagents, builders and all sorts of Australian companies who, in some cases, have inadvertently transgressed laws they didn't even know existed, and fine them millions of dollars for doing so, but will not lift a finger to enforce the laws they have. This parliament now finds itself in the ludicrous position of having to pass a new piece of legislation to ensure the ACCC does what it was always meant to do—that is, protect the interests of Australian consumers.

If not for the efforts of the member for Fenner, this probably would never have come to our attention. I for one know that I would have sat on this side of the House and believed that the ACCC had this under control. After all, it has in its toolbox the very laws to enforce that enable it to ensure consumers are protected in this country. This is a clear case of market failure. This is a clear case of denial of information and of asymmetric information being imposed on the Australian public—not as a design flaw, not as a simple and obvious outcome of the transaction, but because overseas producers of these cars have simply imposed asymmetric information on the Australian public and on the Australian economy. They have damaged businesses. Frankly, this law probably doesn't go far enough. Frankly, this law probably should be retrospective and ask those manufacturers overseas to compensate the independent workshops and the small businesses in country towns, in suburbs and in cities that have been unable to do work, have been unable to provide goods and services that they lawfully undertake—and are, in many cases, better qualified to undertake—because these overseas firms, these large companies, have ensured that they have dictated to Australian consumers who they can use and which companies they can go to to get the goods and services they require.

Not only do I thank the member for Fenner for his efforts on these matters and the member for Kingsford Smith for pointing out my mechanical prowess; I also thank the many independent small businesses that did so much through all of these years to bring this to the attention of members of parliament, and all of us, to ensure that we understood the pain and deprivation they had gone through. We are talking about overseas manufacturers that deliberately got involved in designing software that was designed to trick government regulators and environmental agencies in terms of what their carbon output was in diesel cars. They're the people we're talking about. They're the people that basically said to Australians: 'You will use our repairers, our service people and no-one else. We will make sure that happens by denying you access to your own data, to the data that you own in your own car.'

I go back to how I started this speech, by questioning what it is that our regulatory agencies were doing through this whole process. They're very good at coming in after the fact. They were very good after the North Americans found out that a particular motoring company, Volkswagen, had designed a piece of software to trick environmental protection agencies worldwide; when that discovery was made in North America, the ACCC was all over it. They'd actually done nothing up to that point to uncover the fraud perpetrated on this country through that trickery and that fraudulent software. They can't say that they didn't have the powers to enforce this. They can't say that they didn't know about this. This has been made apparent to literally every single person in this chamber, in this House, over many, many years. Still, those at the ACCC chose to pursue newsagents instead of pursuing the real economic damage that was being done to small businesses not only in places like the Northern Beaches of Sydney but right across this country—as well as the damage that was being done to Australian consumers, who were unable to have the choice, which they so rightly deserve, of where they got their cars repaired. Why? Because those manufacturers decided that they, not the people who bought their cars, owned the data.

This is a significant and real issue for this economy as we move forward. Who does own our data? The ACCC was very happy to attack Google, Facebook and those high-profile companies, but they didn't want to take on the car manufacturers and they didn't want to stand up for Australians and Australian businesses.

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

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.