Archives: Dealer Bulletins

In late 2023, significant changes to Australia’s unfair contract terms (UCT) regime will take effect.

From 10 November 2023 the use, application of or reliance on unfair terms in a wide range of standard form contracts will become illegal, with contraventions attracting new higher maximum penalties, as opposed to previously where it could only be declared void.

These changes are not retrospective and will only apply to new agreements or renewals commencing on or beyond 10 November 2023. However, where a term of a contract is varied or added on or after 10 November 2023, the changes relevant to deciding whether a contract is a standard form contract apply to the whole contract.

Standard form contracts are typically used in industries where there is a high volume of ‘agreements’ occurring and contracts are generally offered on a ‘take it or leave it’ basis. This may include contracts with suppliers, service providers and consumers. Dealers should consider their own compliance with these changes prior to the commencement date.

Standard contract terms may be regarded as unfair if one party to the contract has a significant advantage over the other and it would cause financial or other harm to the other party if enforced.

The reforms also expand the UCT regime to apply to a wider class of small businesses. The significantly expanded definition of ‘small business’, will apply to businesses that employ 100 people or less (increased from 20) or any business with an annual turnover of less than $10 million.

The AADA has continued to advocate on behalf of members on the issue of UCT and welcomes the recent changes which will help strengthen protections for small businesses from unfair terms in standard-form contracts. However, AADA will continue to advocate for all franchise agreements to qualify for UCT protections, irrespective of the number of employees or annual turnover.

There are a number of resources explaining the changes available, and members are urged to familiarise themselves with these changes prior to their introduction.

Dealers and Dealer Councils should seek legal advice prior to finalising new agreements and be advised that these UCT changes continue to apply to consumer sales contracts and to ensure that these contracts are updated to ensure compliance, particularly, as higher penalties apply.

More information on the upcoming changes can also be found on the ACCC website.

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Yesterday the Minister for Small Business, Housing, and Homelessness, the Hon Julie Collins announced that the review of Australia’s Franchising Code of Conduct will be led by Dr Michael Schaper.

Dr Schaper has extensive experience with the franchising and broader small business sector with his previous appointments including, Deputy Chair of the Australian Competition and Consumer Commission, Small Business Commissioner for the Australian Capital Territory, and CEO/board member of several peak industry and professional associations.

This Franchising Review is a critical opportunity to examine the regulatory settings in place to support Australia’s franchising sector, including by evaluating the effectiveness of previous reforms such as the New Car Dealerships provisions enacted in 2021.

The Minister has also released the Terms of Reference for the review, and a discussion paper and subsequent consultation process will ensue in the coming weeks.

As the discussion paper is released, the AADA will engage with members and dealer councils to gather feedback to inform the AADA’s response.

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Following on from previous Dealer Bulletins regarding the Temporary Skilled Migration Income Threshold (TSMIT) increase, the AADA received a number of queries regarding the calculation of the TSMIT and if it includes overtime hours.

The AADA sought advice from the Australian Chamber of Commerce and Industry, who have been in contact with the Department of Home Affairs, and advised that overtime hours may count for guaranteed monetary earnings where it is guaranteed overtime that is also able to be accessed by an equivalent Australian worker.

Please see the linked fact sheet below which contains further information on:

• The raising of the TSMIT to $70,000 from 1 July 2023;
• Why the TSMIT has been lifted;
•  Labour Agreements;
• Annual Market Salary Rate;
• Salary assessments for those in Australia on a pathway to permanent residence;
• Labour Market Testing; and
• Skilling Australians Fund.

FACT SHEET

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In April 2023 the Queensland Government announced additional financial assistance as part of their Zero Emission Vehicle Rebate Scheme which initially commenced in July 2022.

AADA advised Dealers of the new eligibility requirements and the increased rebate available via a Dealer Bulletin in April. The enhanced rebate scheme came into effect from 1 July 2023 and the key changes are as follows:

• An increase to the eligible dutiable value threshold from $58,000 to $68,000 (including GST).
• An increase to the rebate from $3,000 to $6,000 for eligible households with a total taxable household income of $180,000 per year for eligible EVs purchased from 1 April 2023.
• Applicants who have already applied and received a $3,000 rebate and who are under the total taxable household income threshold, are eligible for reassessment and additional payment of $3,000 rebate (totalling $6000 per eligible application).

Further details of the Enhanced Rebate Scheme, and the application form for customers are available online at the Queensland Rural and Industry Development Authority website.

Dealers should remind customers purchasing a new EV to record proof of purchase to access the rebate.

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Earlier this week the AADA made a submission in response to the Queensland Government’s Review of the Electrical Safety Act.

In 2020, Minister for Industrial Relations Grace Grace initiated a Review of Queensland’s Electrical Safety Act 2002, led by Mr Dick Williams, with the Review Report delivered in late 2021.

One of the key recommendations put forward in the Report was that certain work on electric vehicles (EVs) should be regulated under the Act, and this work should be restricted to be performed by licensed electricians.

The AADA and other industry groups are wholeheartedly opposed to this recommendation and are strongly urging the Queensland Government to abandon this proposal.

The AADA’s submission highlighted the potential unintended consequences of introducing regulations to limit repair and service work on EVs to licensed electrical workers, such as
making it more costly and time prohibitive to have EVs serviced and repaired, hinder adoption of EVs by the Queensland community and present safety risks for consumers.

The submission also highlighted that throughout much technological change and the introduction of several different drivetrains over the years, Dealers have continued to safely provide services on vehicles to the community through continuous training of automotive technicians.

The AADA submitted that it would be an unnecessary and burdensome overregulation of an industry that has been safely and effectively managing the repair and service of EVs for years.

The AADA also wrote to the Minister, stating the industry’s opposition to the recommendations, providing a copy of the submission and offering to engage further with the Government on the Review recommendations.

You can view the AADA’s submission here.

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Over the last few months, the AADA has continued to advocate to Government on the issue of the instant asset write off/temporary full expensing (TFE) scheme which will not continue beyond 30 June 2023.

The AADA and other industry bodies have pushed strongly for considerations for vehicles that were ordered under the current instant asset write off scheme/TFE, but due to the shortages and associated delivery delays, will not be delivered before the scheme is due to expire. The AADA wrote to Treasurer Jim Chalmers and met with his office as well as with Treasury officials on a number of occasions. We also pushed the case with members of the Opposition and the cross bench.

Unfortunately, the Government have given no indication that they will be extending the delivery deadline for the scheme and instead the instant asset write off threshold will drop to $20,000 and only available for businesses turning over less than $10 million.

This is a disappointing outcome, for many of those businesses which purchased vehicles in good faith thinking they would be delivered in time for the end of the financial year, but will now miss out due to no fault of their own.

It should be noted that we have been working with the previous and the current government on this for several years since supply chain disruptions commenced in 2020. The industry was successful in having the scheme extended beyond the original period of the 2020-22 financial years, however there is no appetite within Government to continue to extend this measure any further.

The AADA will continue to make representations and highlight the issue on behalf of AADA members.

 

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Solar Victoria have advised the AADA that the Zero Emissions Vehicle (ZEV) Subsidy Program will not continue beyond 30 June 2023. Applications for ZEV subsidies will close at 6pm on 30 June 2023.

In its note to AADA, Solar Victoria have advised the following:

Growth in demand of ZEVs over the past 12 months was a factor in this decision. In the first year the subsidy was available, Victorian ZEV sales rose by 310 per cent. The subsidy has had a substantial impact on the market in which sales have increased from 1.8% in 2021 to approximately 6.6%. This program was designed to promote the rapid uptake of electric vehicles, and through your support more than 8,000 Victorians have made the switch to a ZEV since the program launched in May 2021.

The State Government will continue to promote the subsidy until 30 June including content to encourage customers to take up the subsidy before applications close. This information can be found here: https://www.solar.vic.gov.au/go-ev.

For customer orders that are not yet assigned a subsidy, you will need to complete the customer pre-eligibility check (Completed About Customer) by 6pm on Friday 30th June and will have a further 14 days after the pre-eligibility check to upload the contract of sale and complete the order to secure the ZEV subsidy for your customer.

Please note the contract of sale must be signed and dated by the customer by no later than 30th June 2023.

 

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Please be advised that yesterday 6 June 2023, significant amendments to the Fair Work Act 2009 commenced.

These include:

• Flexible work – new obligations relating to requests for flexible working arrangements and dispute resolution procedures through the Fair Work Commission (FWC);
• Unpaid parental leave – new obligations relating to requests for extensions of unpaid parental leave and dispute resolution procedures through the FWC;
• Single interest authorisations – major expansions to the single interest stream of enterprise agreements;
• Supported bargaining – expansions of the low-paid bargaining stream, renamed the “supported bargaining” stream;
• Cooperative workplaces – expansions of the multi-employer bargaining stream, renamed the “cooperative workplaces” stream;
• Better off overall test – changes to the application of the better off overall test;
• Bargaining disputes – new powers for the FWC to resolve disputes which arise during enterprise bargaining;
• Enterprise agreement approvals – changes to the FWC’s satisfaction of genuine agreement, including the introduction of the Statement of Principles; and
• Industrial action – changes to the conduct of protected action ballots and notice requirements.

For further information on the non-bargaining changes, please refer to the AADA and Australian Chamber of Commerce and Industry (ACCI) Employer Guide.

This guide is intended to help employers navigate these changes and offer practical advice for complying with new obligations. It does not cover every single aspect of the legislative changes, but rather the substantive provisions. Further advice should always be sought for the resolution of specific issues.

You can also view the changes at the Fair Work Commission website.

 

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Outlook
Real gross state product (GSP) is forecast to grow by 2.75 per cent in 2022-23 but is expected to slow to 1.5 per cent in 2023-24 as high inflation and interest rates weigh on the economy. The rate of unemployment is below 4 per cent and underemployment is at multi-decade lows.

Revenue from motor vehicle taxes is expected to be $3.4 billion in 2023-24, reflecting indexation of registration fees and growth in new car prices and is forecast to increase by 5.2 per cent per year over the forward estimates. Revenue from motor vehicle duty is expected to be supported by growth in new car prices.

New vehicle prices have been rising sharply since January 2022, primarily due to increased production costs and demand side pressure. The average sales price of new vehicles in 2022 is estimated to be 29.8 per cent above prices in 2019. A shortage of semiconductors constrained new vehicle production, increasing demand for used vehicles and contributing to a 46.1 per cent increase in used vehicle prices from 2019 to 2022. Used vehicle prices moderated in the latter half of 2022, coinciding with the easing of the new vehicle shortage in Australia.

Budget measures

Apprenticeships

• The Government is providing $10 million to offer free vehicle registration for eligible apprentices and tradespeople by expanding the motor vehicle registration discount from 50 per cent to 100 per cent, for apprentices that drive for work.
• $4 million to develop and deliver an apprentice mental health training program for apprentices.
• $1.5 million to support the establishment of an Apprenticeships Taskforce with employee, union, and industry representatives.

COVID Debt Levy

• A new COVID Debt Levy to offset the cost of measures introduced by the Government in response to the pandemic over the past three years.
• It will have two components:
  • The payroll component will, from 1 July 2023, temporarily levy an additional payroll tax on large businesses with national payrolls above $10 million a year. A rate of 0.5 per cent will apply for businesses with national payrolls above $10 million, and businesses with national payrolls above $100 million will pay an additional 0.5 per cent (1% in total).
  • The landholdings component will decrease the tax-free threshold for general land tax rates, while fixed charges and land tax rates will also be adjusted. From 1 January 2024, the tax-free threshold for general land tax rates will temporarily decrease from $300 000 to $50 000. The family home will remain exempt from land tax. Those who pay land tax will attract a temporary additional fixed charge starting at $500 for landholdings between $50 000 and $100 000. There will be a $975 fixed charge for landholdings above $100 000 and the tax rates will temporarily increase by 0.1 per cent for both general and trust taxpayers with holdings above $300 000 and $250 000 respectively.
• The Levy will end on 30 June 2033.

Stamp duty

• Reform land transfer duty for commercial and industrial properties to transition away from stamp duty for commercial and industrial properties. This will occur after the next sale, with an annual property tax applying after a transition period of 10 years. This reform will not affect current owners of commercial and industrial properties, as the property will only be subject to the new arrangements once it transacts.
• The first purchaser of a commercial or industrial property after 1 July 2024 will be able to choose to either pay the property’s final stamp duty liability as an upfront lump sum, or transition to an annual payment immediately by opting to pay fixed instalments over 10 years equal to stamp duty and interest with a government-facilitated transition loan.

Small Business

• From 1 July 2024, the payroll tax free threshold will be lifted from $700 000 to $900 000. The payroll tax-free threshold will be lifted again, to $1 million, from 1 July 2025, and going forward, the payroll tax free threshold will be phased out for larger business.

Abolish business insurance duty

• Abolish business insurance duties (which apply to public and product liability, professional indemnity, employers’ liability, fire and industrial special risks, and marine and aviation insurance). Abolition will be achieved by 2033, with the rate of duty, currently 10 per cent, being reduced by 1 percentage point each year from 1 July 2024.

WorkSafe

• WorkSafe’s average premium rate will be increasing from an average of 1.272 per cent of remuneration in 2022-23 to an average of 1.8 per cent from 2023-24.

 

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Following on from the Dealer Bulletin released on 28 April 2023 regarding the recent review of Australia’s migration system and key initiatives announced as part of that review. The Department of Home Affairs has updated its website to provide further information on these initiatives.

Raising the Temporary Skilled Migration Income Threshold (TSMIT)

From 1 July 2023, the TSMIT will increase from $53,900 to $70,000. New nomination applications after this date will need to meet the new TSMIT of $70,000 or the annual market salary rate, whichever is higher.

This change will not affect existing visa holders and approved nominations lodged before 1 July 2023.

Expanded Pathways to Permanent Residence

By the end of 2023, the Temporary Residence Transition (TRT) stream of the Employer Nomination Scheme (subclass 186) visa will be available. This stream is for all Temporary Skill Shortage (TSS) visa holders whose employers wish to sponsor them.

The AADA understands that wait times for Temporary Skilled Migration Visas have significantly improved over the last months, however, in some cases, they are being held up by skills assessments. The AADA will seek to highlight this issue with the Department and keep members updated.

You can find more information on the recent changes at the Department of Home Affairs website.

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