MINISTER CHAMPIONS THE CAUSE FOR INDEPENDENT MECHANICS
A ‘never give up’ attitude by the AAAA backed by the determination and support of Federal Minister Michael Sukkar has resulted in a new information-sharing law
Following nearly a decade of campaigning by the AAAA, the Motor Vehicle Service and Repair Information Sharing Scheme Bill was passed by the Senate late last month. The new law will make it illegal for car companies to withhold information from qualified independent mechanics, keeping the cost of replacement parts, vehicle maintenance and repair affordable.
Federal Assistant Treasuer Michael Sukkar was one of the champions of the campaign that lead to the Bill. In this exclusive interview with Australian Automotive Aftermarket Magazine Minister Sukkar explains why he remains so passionate about this issue.
AAAM: How were you first made aware of this issue and when did you first become aware that consumer choice was limited by a lack of repair information sharing?
MS: Independent repairers and industry representatives, like the AAAA and particularly Chief Executive Officer Stuart Charity, have been vocal about this issue for some time.
In 2017, the ACCC found a lack of access to service and repair information was causing delays and higher costs for consumers. Around one in 10 motor vehicles taken to repair workshops were affected by a lack of access to service and repair information.
These findings backed up what I was hearing from independent repairers and it became clear that attempts at voluntary arrangements were not working, which is why the Morrison Government committed to progressing a mandatory information-sharing scheme.
The Government has now delivered on that commitment by passing legislation through the Parliament to establish the scheme.
AAAM: What inspired you to take action? Ministers have a lot on their plate and we wondered why you personally supported this one as a priority issue?
MS: Automotive repair is an important industry which keeps Australia’s 19.8 million vehicles on the road. There are nearly 35,000 automotive service and repair businesses in Australia, employing over 106,000 Australians.
The average household spends more than $1,500 a year on servicing and repairing their car. By levelling the playing field for independent repairers and creating a more competitive market, these reforms will bring down the cost of owning a car.
I want consumers to be able to access servicing and repairs in a fair, competitive market. This ground-breaking legislation will give consumers more choice about where their vehicle is repaired.
This is also consistent with the Government’s approach to back small and medium-sized businesses.
AAAM: What is your own experience of auto repair and service? We have heard that your family supports a local independent repairer and you have done so for a long time?
MS: I have gone to the same local mechanic for 20 years. No matter which car I own, I like taking my car to him and I want to make sure that he’s able to get the information he needs to service and repair my car.
Since I bought my first car, I have seen cars become more like computers on wheels and these days most of the information needed to repair new cars is only available to the dealer. That’s why, in essence, we’re now requiring car manufacturers to make available to all independent repairers the service and repair information shared with their dealership networks.
AAAM: How will this new law make a difference to independent repairers? Will they get more business or is it a matter of being more effective with the customer base they have now?
MS: Most importantly, the scheme will benefit independent repairers by mandating the provision of accessible and affordable diagnostic, repair and servicing information so they can do their job safely and effectively.
Currently repairers can lose work when they are not able to access the information they need, despite being trained to do the job. Independent repairers want to avoid unnecessary delays or sending customers to the dealership to complete a repair.
As the scheme rolls out, consumers will realise they have more options when they need to service and repair their car. This will promote competition, allow independent repairers to grow their businesses and establish a fairer playing field for all repairers.
AAAM: What happens if car companies find and exploit loopholes? What if all the ways they can get around the new laws aren’t known today and they find new ways to frustrate the Scheme?
MS: The Government will keep a close eye on industry’s response to the scheme and will work with industry, including manufacturers, to encourage compliance. The ACCC will regulate the scheme and there are strong penalties for violations– up to $10 million.
A joint industry-led organisation will also report to me on the operation of the scheme and to the ACCC on systemic issues. This organisation will be based on successful arrangements for the United States’ National Automotive Service Task Force.
The Government stands ready to review and adjust the scheme in the future to respond to industry developments or actions to frustrate the scheme. Mechanisms to address these issues are built into the scheme through rule-making powers.
AAAM: Will independent repairers be able to access the information at a fair price? Do you think the “on Fair and Reasonable terms” will work? Is it going to be a matter of wait and see?
MS: A key objective of the scheme is to encourage the provision of accessible and affordable information to repairers on fair and reasonable commercial terms. The ACCC will keep a close eye on prices to ensure the scheme meets this objective.
Under the scheme, car manufacturers can charge no more than fair market value. This is a recognised concept in both Australian law and in an international context. The factors to be considered in setting fair market value include the price charged to other repairers, reasonable recovery of costs, and the prices for information in overseas markets.
There are also provisions to ensure repairers can access information on a daily, monthly, or annual basis to help ensure repairers can match financial outlays with expected use.
AAAM: This is going to have a huge impact in reducing the cost of car ownership – do you think the media has fully worked out just how important this legislation will be to the Australian Economy?
MS: These changes are a huge win for car owners. Consumers will be able to go to the repairer of their choice, without having to worry about whether they have the information to do the job. This will level the playing field for independent repairers and create a more competitive market. These reforms will bring down the cost of owning a car.
There will also be benefits for regional communities, which do not have access to affiliated dealerships. Car owners in regional Australia will be able to go to their local repairer instead of traveling huge distances, possibly on the back of a tow truck, to their nearest dealership.
Ultimately, independent repairers understand the importance of this change and know that the benefits will flow through to their customers.
We have worked closely with the automotive industry, particularly the AAAA, on designing the scheme and they have done a fantastic job of raising awareness with their members. In fact, we have already received more than 350 emails from independent repairers, many I believe are AAAA members, thanking the Morrison Government for implementing the scheme.
AAAM: You spoke about the importance of the industry body that will assist in operationalising the law – it seems that industry engagement is an important characteristic of the new law – do you think that these parties are going to be able to cooperate to make it work?
MS: The Government has been working closely with industry representatives, including the AAAA, to deliver market-based solutions to make the scheme easy to use. Industry representatives have advised me they intend for a joint industry-led organisation to run an online portal to facilitate easy access to service and repair information.
I expect that the online portal will be used as a gateway by independent repairers to access information and to verify they meet the criteria to access safety and security. The portal will allow repairers to access information from numerous manufacturers who choose to use this platform.
The Government will provide a $250,000 grant to the industry-led organisation once it is operational to facilitate online access to service and repair information.
AAAM: What’s the process from here? What happens next?
MS: The scheme will come into effect on 1 July 2022. In the meantime, the Government is working closely with industry to prepare for the commencement of the scheme and establish the joint industry-led organisation, which will provide technical advice and run the online portal.