Deborah O'Neill (NSW, Australian Labor Party) | Hansard source

I rise to speak about an issue of great concern to the hardworking car dealers of Mercedes-Benz and the car dealer network in Australia more broadly. The imposition of the agency model by car dealers Honda and, now, Mercedes-Benz onto Australian dealers is a disaster for these local businesses who provide local jobs, apprenticeships and community sponsorship, and, of course, pay their taxes.

I'm in this place to stand up for fairness—fairness in workplaces, fairness in our society and fairness in business. The growing power and arrogance of large multinationals in Australia have found fertile soil in the government's stuttering actions to introduce fairness into our franchising sector. I particularly want to raise the issues regarding the agency model that have arisen since those initial hearings on the car dealership industry in Australia.

Seven key assertions were made by the senior executives of Mercedes-Benz in statements to the Senate Education and Employment References Committee on 24 November 2020. Mercedes-Benz asserted that the dealers were happy with the proposed changes to the agency model, that they had consulted widely with the dealers regarding the changes, that the agency model would be a win for dealers, that the reason Mercedes-Benz was shifting to the agency model was driven by consumer benefits, that dealer profits would not be impacted, that Mercedes-Benz was committed to the dealers for the long term and that Mercedes-Benz would not profit from the shift to an agency model.

I assert under the weight of current evidence that Mercedes-Benz appear to have misled the Senate committee. The detailed statement of claim from the Mercedes-Benz dealers in their current court action instead pours water on those seven claims. The dealers were not happy with the proposed changes and in multiple meetings they voted overwhelmingly not to proceed with the agency model. Mercedes-Benz did not consult widely with dealers. In fact, when dealers tried to negotiate some of the terms of the model, Mercedes-Benz issued a dispute notice under the franchising code. The agency model is not a win for dealers. If instituted, the agency model will cut the profitability of some dealerships by over 50 per cent, and the experience, now that the model has been introduced, has sadly lived up to the dire predictions. The agency model is not about consumer benefits. It merely is about ensuring greater profits in Stuttgart instead of main streets in suburban and regional Australia.

Dealer profits will be impacted. Deloitte analysis said that the profitability under the new model would decline by more than 50 per cent. Mercedes-Benz were not committed to dealers long term; dealers were issued non-renewal notices as a means of terminating their agreements. Mercedes-Benz will profit from the shift to the agency model. This will take profits out of dealerships and straight into the pockets of Mercedes-Benz. This is an extremely serious matter and begs the question: if Mercedes-Benz are willing to perpetuate untruth to the members of the Australian Senate, who else are they willing to lie to? These untruths must be called out in the public interest—in the interests of Australian businesses and Australian dealer networks. The Australian Senate must not be treated with contempt by large multinationals who are only concerned with extracting profit and shipping it offshore.

I will be watching developments and, given the seriousness of my concerns, I intend to take this matter to the Senate Education and Employment References Committee to request that that it be raised with the President of the Senate as a matter of privilege.