Louise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) Share this | Hansard source

I seek to speak to the government's response to the report that's been tabled on the Education and Employment References Committee inquiry into the regulation of the relationship between car manufacturers and car dealers in Australia. It has been some time since our committee undertook that inquiry, but it was a really important one. The government has taken some steps to address some of the issues that we raised. I have to say that Australia doesn't quite feel like itself now that Holden cars and other Australian manufactured cars are disappearing from our roads.

It's been some years now since the car manufacturing industry stopped production in Australia. I still lament the day that happened, and I truly wish that the current government had done more at the time to ensure that Australia continued with a viable car manufacturing industry. However, here we are today with a new landscape, which existed before in terms of vehicle imports and retailers selling those cars. But now that Australian manufacturers have pretty much disappeared, it really brings to light the power dynamics between car dealers and retailers compared to the bargaining power that the manufacturers have over them.

I want to reflect briefly on some of the government responses to our recommendations. We had asked that the ACCC expedite investigations into examining GM Holden and providing public updates on that investigation and similar investigations into the relationship between manufacturers and car dealers into the future. The government has simply noted this, and I think that's acceptable in the context of the ACCC as an independent statutory organisation.

In that context, I want to call on the ACCC to remind them of what has already happened in this space and that consumers can be vulnerable to the fact that they are driving Holden cars, many of which are still under warranty, on Australian roads and that the warranty obligations have now been subcontracted or remain with different dealers. I'm concerned that, because they've no longer got a vested interest in their ongoing business in Australia, it's incredibly important that Australian consumers got what they paid for when they bought a Holden car in recent years.

We also recommended that the ACCC ensure that Holden meets its obligations to Holden vehicle owners in relation to warranties, recalls, technical support and access to parts. I'm very concerned to ensure that that is the case. I know that state and territory regulators in this space—because the ACCC gets many of its powers from the states—are indeed considering to ensure that we're able to strengthen that compliance and enforcement in that area.

The government announced automotive reforms in March of 2021 in relation to manufacturers' agents and new vehicle sales. They took effect back in July. This is in line with what the committee recommended in relation to increased fines, mandatory principles and protection of dealers who were operating as manufacturers' agents. We further made a recommendation in terms of mandatory best practice principles for the reimbursement of all reasonable expenses incurred in relation to warranty and recall work, including expenses associated with the diagnosis administration of claims and claim audits. Again, this points to a significant power imbalance between dealers, car retailers, manufacturers and customers.

In order to meet the consumer law, retailers have to ensure that they're providing a reasonable consumer guarantee. But the manufacturers of those goods who are supposed to meet what is in that guarantee are, in many cases, passing the cost and expense of meeting the failure of their products back onto the dealers who they licensed to sell those vehicles. It needs to be very clear that the consumer guarantee and a failure of a product that's sold are the manufacturer's responsibility. The car manufacturers that license suppliers here need to do a better job. I'm pleased that, in this context, consumer affairs ministers have agreed to look at options to prohibit manufacturers from failing to indemnify suppliers and to prohibit retribution by manufacturers against suppliers who seek indemnification for the work they have had to do.

I was disgusted to learn throughout the course of this inquiry about the extent to which car manufacturers are pushing their liabilities onto dealers. In that context, it's significant that they have been pushing that liability onto dealers because of the power imbalance. This really highlights a need for mandatory, binding arbitration to resolve disputes, which is what the committee recommended. We were very pleased to find that the government has supported this in principle, and I look forward to working with vehicle dealers in the future to ensure that the government makes good progress on this commitment. It is simply unreasonable that the importer has all the power and that small-business, or even large-business, owners can be left completely stranded, having, in good faith, made investments in their dealership yards et cetera to meet their obligations, only to find that the rug has been pulled out from underneath them by a large manufacturer. We saw this happen time and time again in the evidence that was given to us in the course of the inquiry.

I note, lastly, the response of the government to our recommendation in relation to the Small Business and Family Enterprise Ombudsman, and I look forward to following that up with them.

In closing, I want to say, given the short amount of time that is left, that it was not easy for car dealers to come forward to talk to us about the disadvantages they saw, because they felt that, even in giving evidence, they could be punished by these large manufacturers in future contract negotiations. Although we tried very hard to soothe them with the protections of the parliament for giving evidence, they felt very vulnerable in terms of being able to do that. I really want to pay tribute to the brave small businesses that spoke up and worked together to raise their concerns before our committee, and I would encourage this kind of engagement from them in the future.

I want to say thanks to Senator McGrath, as deputy chair of the committee, who is, unfortunately, leaving the committee now and will be replaced by Senator Canavan. I seek leave to continue my remarks later.

Leave granted; debate adjourned.