Archives: Dealer Bulletins

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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On 21 May, the Government released its Technology Investment Roadmap discussion paper and is now seeking input from stakeholders and industry. The Technology Investment Roadmap will help inform Australia’s first Low Emissions Technology Statement and will be a critical input to Australia’s Long Term Emissions Reduction Strategy.

In the transport sector, the Roadmap identifies significant opportunities to improve road transport efficiency and reduce emissions by increasing the use of hybrids, alternative fuels and electric vehicles. The Roadmap will complement other initiatives, such as the forthcoming National Electric Vehicle Strategy.

An indicative shortlist of priority technologies for the transport sector includes:

• Battery, hybrid and plug-in hybrid electric vehicles
• More efficient internal combustion engine vehicles
• Fleet technologies e.g. driver aids and feedback, maintenance technologies, improved telematics and logistics, Internet of Things route planning, and backload optimisation
• Mode shift technologies
• Micro-mobility
• Biofuels

The first Low Emissions Technology Statement will be published by the Government in the coming months. More information is available on the department’s website. The discussion paper is available for download below:

• Download Discussion Paper [12MB PDF]

The AADA is currently reviewing the discussion paper and will be developing a submission by 21 June 2020.

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On 13 May, the Government announced that it will be introducing a new Payment Times Reporting Scheme for large businesses with a total annual income of over $100 million. The change will require large businesses to publicly report information on their payment terms and times to their small business suppliers.

The scheme will:

• increase transparency of the payment performance of large businesses so small businesses can make more informed decisions about their potential customers.
• drive cultural change to improve payment times.

The principal legislation for the Scheme, the Payment Times Reporting Bill 2020, was introduced into the Parliament mid-May. The Department of Industry, Science, Energy and Resources is now seeking input on an Exposure Draft of the subordinate legislation, which will provide detail on how sections of the legislation work in practice.

The department’s consultation paper and proposed legislation are available for download below.

• Download Consultation paper [730KB PDF]
• Download proposed legislation [426KB PDF]

The AADA is currently reviewing the proposed draft of the Rules and will be developing a submission by 12 June 2020.

If any members would like to contribute to this submission, please contact Brian Savage.

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Today, the Government announced a three-step plan to gradually remove baseline restrictions and make Australia COVID-safe. States and territories are able to move between the steps on the pathway at different times, in line with their current public health situation and local conditions.

Further details from the Government’s announcement:

• Step 1 will focus on carefully reopening the economy, and giving Australians opportunities to return to work and social activities, including gatherings of up to 10 people, up to 5 visitors in the family home and some local and regional travel.
• Step 2 builds on this with gatherings of up to 20, and more businesses reopening, including gyms, beauty services and entertainment venues like galleries and cinemas.
• Step 3 will see a transition to COVID-safe ways of living and working, with gatherings of up to 100 people permitted. Arrangements under step 3 will be the ‘new normal’ while the virus remains a threat. International travel and mass gatherings over 100 people will remain restricted.

You can download a detailed plan of the steps here.

The Federal Government has also announced its decision to defer by up to six months the introduction of recommendations made by the Financial Services Royal Commission. The AADA welcomes this decision in light of the current economic conditions and very tight credit market resulting from the Hayne Report and exacerbated by the COVID-19 pandemic.

For franchised new car Dealers this also means the postponement of the changes to the Point-of-Sale exemption that they currently operate under. Originally this change was scheduled to be introduced by 30 June 2020 however this will now be pushed back to no later than December 2020. As before we will be urging the Government to also include a lengthy transition period for the amendments to occur, as any hastily introduced measures will only add to consumer uncertainty around the credit market and will not provide Dealers and financiers with sufficient time to introduce the changes.

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Today, VFACTs new vehicle sales figures for the month of April have been released, showing the lowest monthly new car sales results in 26 years. A total of 38,926 cars were sold, representing a fall of 48.5 per cent over the same period last year and the biggest monthly contraction since new car sales figures were first recorded in 1991.

The AADA continues to urge Government that stimulus measures should be extended to Dealers currently excluded by turnover and employee thresholds. The Secretariat has been working closely with the AMDC to develop a number of measures to assist the automotive industry in its recovery.

These measures include:

1. Extending the Instant Asset Write-Off:
   Extend the instant asset write-off by a further six months and remove the car limit of $57,581.

2. Fleet Renewal Scheme:
   Provide a stimulus for the automotive industry and assist in making Australia’s passenger vehicle fleet safer, while also reducing emissions.

3. Freeing Up Car Finance:
   Address the tightening of credit brought on by the royal commission and compounded by the COVID-19 crisis.

4. Automotive Taxation Reform:
   Abolish or reform various taxes applied on cars at the federal and state levels, including Import tariffs, the Luxury Car Tax, state stamp duties and registration fees.

5. Reform Automotive Industry Franchising:
   Reform the laws surrounding Dealer Franchise Agreements to rectify the imbalance in power that exists between OEMs and Dealers.

The AADA will be engaging with the Government to address all of the issues mentioned above and assist our members during these challenging times.

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Following the passage of the Government’s JobKeeper Payments Program through Parliament last week, the rules that regulate its implementation have now been published and can be found here.

In addition, the ATO has announced that enrolments for the program will open on Monday 20 April 2020. The instructions about how to apply can be found here.

The AADA is still awaiting more detailed information on elements of the package, including eligibility. Members are advised to work closely with their accounting firms and tax practitioners for further advice and guidance on participating in the program.

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The unprecedented COVID-19 crisis has seen all levels of government in Australia develop a range of support measures for both businesses and individuals. These measures are evolving as the scope of the crisis and its effects become visible, therefore programs are being defined and enacted on an ongoing basis. At this stage, most programs have a timeframe of six months, but this will be reviewed according to the circumstances at the time.

The attached AADA COVID-19 Members Pack provides details on the various programs as they stand at 8 April 2020. The AADA has also created a page on our website that contains all relevant stimulus measures as introduced by the Australian Government. The AADA will be sending updates as new measures are introduced or further details become available.

For further information and more detailed advice, AADA have partnered with BDO’s specialist Automotive team to assist Dealers in understanding the federally provided assistance packages and how they apply.

BDO will provide general advice in the first instance, however, please be aware that more thorough Dealer specific advice will incur a cost as agreed between the Dealer and BDO.

Please contact BDO Automotive Partners Mark Ward (mark.ward@bdo.com.au) or Randall Bryson (randall.bryson@bdo.com.au).

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Members would be aware of the 30 March announcement by the Commonwealth Government introducing the JobKeeper Payments scheme.

Last night the legislation for the scheme passed through both Houses of Parliament and the Government has now released a fact sheet providing information additional to that which has already been provided.

More detailed information will be available shortly when the Treasurer releases the set of Rules underpinning the scheme. We will notify members as soon as this becomes available.

Based on current information, some of the important points for members to be aware of are:

• The thresholds for eligibility have been set at 30 per cent reduction in turnover for businesses with annual turnover of less than $1 billion or 50 per cent for businesses with turnover of more than one billion.

• Dealers who have or expect to receive a decline in turnover equal to or exceeding these thresholds should register at gov.au to access the scheme. If you haven’t already registered, we would recommend you do so as soon as possible.

• The Tax Commissioner has some discretionary powers for cases where a business in good faith believed it would be eligible under the thresholds but did not actually experience the expected decline.

• Eligible employees are full-time, part-time or long-term casuals, currently employed, stood down or re-hired by the Dealership as of 1 March 2020.

• The first payments under the scheme will be received by employers, from the ATO, in the first week of May 2020.

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The National Cabinet today agreed that states and territories would implement the attached mandatory Code of Conduct to impose a set of good faith leasing principles for application to commercial tenancies between owners/operators/other landlords and tenants.

Eligibility is for tenants with an annual turnover of up to $50 million and businesses eligible for the JobKeeper program. Importantly, for our sector the $50 million annual turnover threshold will be applied in respect of franchises at the franchisee level and in respect of retail corporate groups at the group level (rather than at the individual retail outlet level).

It is envisaged that there would be a proportionality to rent reduction based on the tenants decline in turnover to ensure that the burden is shared between landlords and tenants. The Code still allows tenants and landlords to agree to tailored, bespoke and appropriate temporary arrangements that take account of their particular circumstances.

We are still awaiting further detail on the application of the Tenancies Code, which we will share with members as soon as it is available.

For more information, please click here.

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