Archives: Dealer Bulletins

On Sunday 2 August, Victorian Premier Daniel Andrews announced, that Melbourne will move to more stringent Stage 4 restrictions while the rest of will go to Stage 3 restrictions, due to increased COVID-19 cases.

We are awaiting further information about the business impacts of Stage 4 restrictions and will release another Dealer Bulletin later today. The increased restrictions will potentially have impacts on businesses in other states and territories, as Victorian automotive organisations and logistics businesses are disrupted.

The AADA have previously called on the Victorian Premier to allow franchised Dealers to remain open so that they may continue to provide the sales and mobility services that remain so important to people during this tumultuous period. We have also asked for the logistics networks to remain open so that the supply chain can remain operational.

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Dealers were earlier advised in a AADA Bulletin of changes to the JobKeeper scheme which has now been extended to 28 March 2021 for eligible businesses.

From 28 September, the new JobKeeper arrangements will come into effect. These changes introduce stricter eligibility criteria, which largely as a result of a strong month in June, potentially exclude many Dealers from participating in the revised scheme.

Details of the changes can be found in the attached fact sheet but in summary are as follows:

• From 28 September 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the June and September quarters 2020. They will need to demonstrate that they have met the relevant decline in turnover test in both of those quarters to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.
• From 4 January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December quarters 2020 to remain eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.

We want to hear from members about the effect the new arrangements will have on Dealers. We will use the information gathered through this survey to inform the Government about the impact on Dealer businesses and their employees.

 

Please complete this survey by Thursday 6 August. Any personal or Dealer specific information will remain confidential.

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The NSW Government is currently reviewing the Motor Dealers and Repairers Act 2013 (the Act) and is seeking feedback from the industry. The AADA in cooperation with the Motor Traders’ Association of NSW is conducting a survey of member businesses which will assist us in preparing a submission to the NSW Government.

One of the principle objects of the Act is to protect Dealers against unfair contract dealings with Manufacturers and the provisions to do this.

The protections against unfair contract dealings contained in Part 6 of the Act are the focus of this survey which aims to provide insight on:

• what understanding members have of protections against unfair contract dealings with Manufacturers and the provisions to do this;

• alternative steps to protect the industry against unfair contract dealings by motor vehicle Manufacturers in the future.

Before taking the survey, please take the time to review the link to the Motor Dealers Act Part 6 and the link to the Statutory Review Discussion Paper (pages 13-16).

All responses are due by Friday, 7 August 2020. Any personal information provided in the survey will remain strictly confidential.

Today, the FCAI announced a voluntary CO2 emissions standard which will seek a targeted reduction to the CO2 emissions of Australia’s new car fleet from 2020 to 2030.

More than 40 Manufacturers are participating in this scheme and the standard will calculate industry and brand specific CO2 targets on a sales-weighted average mass per unit basis against sales recorded in VFACTS.

There will be separate national targets for:

• Passenger Cars and Light SUVs (average annual reduction of 4% per annum).
• Heavy SUVs and Light Commercial Vehicles (average annual reduction of 3% per annum).

Different brands will progress at different rates, depending on their model cycles.

More information on how the standard works can be found on FCAI’s website.

The AADA will be meeting with the FCAI in the coming weeks to get more detail on this industry standard and what the implications are for Dealers.

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Today, the Prime Minister and Treasurer announced an extension to the JobKeeper program until 28 March 2021. All businesses which have qualified will continue to receive the wage subsidy until 27 September 2020, but after this date there will be a number of changes made to the payment rates and the eligibility requirements.

The AADA is concerned that the revised eligibility criteria is too stringent and could exclude our industry, which is facing an incredibly challenging third quarter and fourth quarter with supply shortages and lower demand.

The following are the key features of today’s announcement:

Extension of JobKeeper

• The JobKeeper Payment, which was originally due to run until 27 September 2020, will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.

 

Payment Rates

• The payment rate of $1,500 per fortnight for eligible employees and business participants will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021.
• From 28 September 2020, lower payment rates will apply for employees and business participants that worked fewer than 20 hours per week. The payment rate for these employees will be $750 per fortnight from 28 September 2020 and $650 per fortnight from 4 January 2021.

 

Stricter Eligibility Requirements

• From 28 September 2020, businesses will be required to reassess their eligibility with reference to their actual GST turnover (not their projected) in both the June and September quarters 2020. They will need to demonstrate that they have met the relevant decline in turnover test in both of those quarters to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.
• From 4 January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December quarters 2020 to remain eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

• 50 per cent for those with an aggregated turnover of more than $1 billion;
• 30 per cent for those with an aggregated turnover of $1 billion or less;

For more information, Treasury has prepared the following factsheet:

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The AADA is consulting with members on these changes in order to develop an understanding of the effect they will have on the industry. We will continue to call for the Government to consider the circumstances of the automotive industry and the fact that it has been experiencing recession like conditions for 27 months.

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Members were earlier advised that we were seeking a practical interpretation of the Regulations for the Vehicle Dealership Agreements introduced on 1 June 2020. The following has been prepared for us by HWL Ebsworth as a guidance to assist Dealers to better understand the regulations and what effect they will have.

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The AADA Secretariat remains in discussions with Minister Andrews and her office about strengthening the Regulations to include sections on Tenure and end of term compensation, which we hope will be added in the coming months.

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The Australian Government have announced the extension of the Instant Asset Write-Off scheme for a further six months, to 31 December 2020.

This is a welcome move by the Australian Government and is one the AADA has been urging Government to deliver for some months.

All other details of the scheme remain the same as does the car limit of $57,581. The ATO have recently advised that the car cost limit for depreciation increases to $59,136 for the 2020-2021 financial year. This is a very modest increase on an arbitrary threshold which AADA will continue to argue holds back the full potential of the scheme and discriminates against one class of asset.

In summary, the Instant Asset Write-Off Scheme:

• Will now continue through to 31 December 2020
• Is for individual or multiple assets, provided the value of each is under $150,000
• Applies to new and second hand assets
• Available to businesses with an annual turnover of less than $500 million.

Dealers are urged to take advantage of the scheme while it lasts and promote it among eligible business customers who will obtain considerable financial benefit.

For more information about the instant asset write-off, including eligibility criteria and the different thresholds, visit ATO’s website.

TheATO has also provided a PDF answering the most common questions about how the instant asset write-off expansion applies to vehicles.

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The AADA is conducting a survey of member businesses to determine how many are utilising the modified award and if there is a requirement to apply to the Fair Work Commission to extend the Schedule.

Early last month AADA advised Dealers that following negotiations with the unions, along with our fellow industry associations VACC and ACCI, we came to an agreement over a modified industry award.

The purpose of the new arrangements is to assist member businesses not eligible for JobKeeper, to utilise a range of award flexibilities during the pandemic. The changes, made through the provision of Schedule 1 – Award Flexibility during the COVID – 19 Pandemic, were added to the Vehicle Repair, Services and Retail Award 2020 (VRSR) and were approved by the Fair Work Commission (FWC) who recognised that sectors of the Automotive industry have been severely impacted by the pandemic.

The FWC inserted the new Schedule into the Award on a temporary basis, operative only between 11 May 2020 to 30 June 2020.  However, this time frame can be extended if it can be demonstrated that businesses in the repair, services and retail sector continue to be adversely affected by the pandemic and are utilising the flexibilities set out in the Schedule.

The Schedule only applies to:

• businesses who are not eligible for JobKeeper, and
• non-eligible employees (i.e. employees employed after 1 March 2020) employed by a business qualified to receive the JobKeeper payment, and
• businesses covered by the VRSR Award.

A summary of the new flexible arrangements and further details can be found on the following links to the FWC website:

• employees’ classifications and duties
• full-time and part-time employees’ hours of work 
• annual leave
• annual leave and close downs.

Please use the below button to take part in our a very short survey.  All responses are due by Monday, 15 June 2020.

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The Australian Taxation Office (ATO) has provided information about how the instant asset write-off expansion applies to vehicles. You can now download a PDF (143KB) answering some common questions, including:

• Does the instant asset write-off threshold apply equally to all vehicles?
• Can I claim the full cost if I use my vehicle for business and private use?
• When working out the carrying capacity of my vehicle, does it include passengers and fuel weight?
• I’ve purchased a vehicle. What do I claim when I’ve traded-in a vehicle as part of the transaction?
• Can I claim under the increased instant asset write-off if I’ve ordered and paid for my vehicle by 30 June 2020, but not yet received it?
• Is GST included in the cost of the vehicle?

From 12 March 2020 until 30 June 2020, the instant asset write-off threshold for each asset has been increased to $150,000 and eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million.

From 1 July 2020, the instant asset write-off threshold will revert to $1,000 and only available for small businesses with a turnover of less than $10 million.

For more information about the instant asset write-off, including eligibility criteria and the different thresholds, visit ato.gov.au/instantassetwriteoff.

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