A NATIONAL survey by the Motor Trades Association of Australia (MTAA) has found that 87 per cent of respondents experienced conduct they considered unfair, unreasonable, or harmful during the past three years.

The survey found more than half had suffered direct financial losses, while many businesses reported reduced profitability, lost revenue, and significant impacts on investment and business growth.

In its submission to Treasury’s consultation on Unfair Trading Practices Protections for Small Businesses, the MTAA presented evidence it says shows unfair conduct is widespread across Australia’s automotive retail, repair, and service sectors, affecting businesses operating in communities nationwide.The submission identifies a range of concerns raised by automotive businesses, including:

• Unilateral changes to prices, margins, rebates, and trading terms
• Warranty underpayments and reimbursement disputes
• Late payment and the withholding of payments
• Unrealistic performance targets and commercial conditions
• Retaliatory behaviour when businesses seek to exercise their rights

The MTAA is urging the Australian Government to introduce stronger protections against unfair trading practices affecting small businesses, warning that thousands of automotive enterprises are being subjected to conduct that undermines investment, employment, training, and competition.

MTAA executive director Bruce Billson said reform was overdue and should be designed to address genuine harm while maintaining certainty for businesses.

“Australia’s automotive businesses are overwhelmingly small and family owned. They are often dealing with much larger organisations that control access to products, parts, customers, work, or critical commercial relationships,” he said.

“When there is a substantial imbalance in bargaining power, the risk of unfair conduct increases, as the less powerful business is subjected to ‘too sharp by half’ conduct from the dominant business simply because they can.

“The result is reduced profitability, delayed investment, fewer apprenticeships, lower business confidence, and, ultimately, fewer choices for motorists.”

MTAA executive director Bruce Billson

Mr Billson said the current legal framework leaves too many businesses carrying costs and risks that should not fall on them.

“Good businesses should not be penalised simply because they lack the market power, realistic avenues for redress or the financial resources to challenge unfair conduct,” he continued.

“The objective of these reforms is not to interfere with legitimate commercial decision-making. It is to ensure businesses cannot manipulate or distort commercial relationships in ways that cause unreasonable harm to smaller operators.”

The MTAA also argued that all franchisees should be protected by the reforms, regardless of their size, noting that the power imbalance inherent in franchise arrangements does not disappear simply because a franchisee grows beyond a prescribed threshold.

The association supports an evidence-based and carefully targeted approach featuring clear legislative drafting, practical guidance, appropriate enforcement mechanisms, and strong safeguards against unintended consequences.

“Fair trading should not depend on who has the deepest pockets or the strongest negotiating position,” added Mr Billson.

“Australia’s small automotive businesses deserve a fair go, and these reforms are an important opportunity to strengthen confidence, competition and fairness throughout the economy.”