The Motor Trades Association of Australia (MTAA) has welcomed the Federal Government's consultation on extending unfair trading practices protections to small businesses, describing the move as a significant step towards creating fairer commercial conditions across the automotive industry.
The consultation paper, released by Treasury, seeks feedback on whether proposed unfair trading practices protections should be expanded to cover small businesses and whether additional safeguards are needed in business-to-business dealings. According to MTAA, the process directly addresses concerns the automotive sector has been raising for many years.
MTAA Interim Executive Director Peter Jones said automotive businesses regularly face unfair conduct when dealing with larger organisations.
"Automotive small businesses regularly face unfair conduct in their dealings with larger businesses, whether that is insurers dictating unfair repair terms, suppliers imposing unilateral contract changes, or franchisors exercising superior bargaining power," Jones said.
He said these issues were not isolated incidents but reflected broader systemic challenges faced by thousands of family-owned automotive businesses operating throughout Australia.
The association argues that many automotive businesses are vulnerable because they depend on relationships with a small number of large commercial entities. According to MTAA, examples include insurers refusing to pay fair repair rates, manufacturers threatening dealership agreements, suppliers imposing unreasonable commercial conditions and businesses being pressured to accept contract changes that leave them worse off.
The Government's consultation follows growing concern about gaps in existing legal protections. A recently released commentary on the consultation paper noted that current laws may not adequately protect small businesses facing significant imbalances in bargaining power. The paper specifically highlights concerns raised by the automotive sector and points to examples where existing legal frameworks have struggled to address unfair conduct.
One example frequently cited is the legal dispute surrounding Mercedes-Benz Australia's transition from a dealership model to an agency model. While the court acknowledged the commercial impact on dealers, it ultimately found existing legislation did not provide adequate grounds for relief. Industry advocates have argued that stronger unfair trading protections may have resulted in a different outcome.
The consultation is expected to be particularly relevant to repairers, dealerships, parts suppliers and service providers across the automotive sector. MTAA has confirmed it will lodge a submission drawing on evidence from its national membership.
Treasury is seeking submissions from businesses, industry groups and other stakeholders until 10 July 2026.
Further information on the consultation, including submission details, is available here