With disruptive change becoming the norm with the digital economy and industry generally, a thread that seamlessly weaves through my several responsibilities, including advocacy, is ‘change’. Across the years we’ve been active participants responding to diverse government and parliamentary entities on policy options, reviews and reforms. Primarily, the underlying theme of each has been ‘change’.
Our submissions, at all times, reflect the ‘best interest’ of the membership and the automotive value chain arising from challenges associated with economic, technological and industry transformations. Being part of the conversation, whether it is on policy or reform measures, means the Association’s views are on the table influencing the decision-making processes.
At present, I am preparing two submissions with a focus on ‘change’ or ‘reform’. The first is the Queensland Parliamentary Committee on Transport and Public Work’s inquiry into transport technology. Overall, the emphasis is on identifying trends and changes in fuel type usage and the increasing electrification of vehicles in coming years. Our research indicates the projected trends in fuel demand for the next decade is for the fuel retailing industry to undergo massive structural changes. This will occur in sync with the technological advancement in the automotive sector led by the conversion from internal combustion engines to hybrid and plug-in electric vehicles. Nationally, the volume of fuel sold by the industry is expected to increase at a lowly annualised 0.7 per cent through 2017-18. It is estimated by 2025 there will be 230,000 electric vehicles on the nation’s roads and this is expected to exceed one million by 2030.
The second submission too, is about ‘change’. It relates to the ‘black economy’, with emphasis on consultation on designing a modern Australian Business Number (ABN) system to improve the integrity of the ABN system and the quality of ABN data.
There is a sound reason for redesigning the ABN. The Australian Bureau of Statistics in 2012 estimated that the’ black economy’ equated to 1.5 per cent of Gross Domestic Produce (GDP). The 2017 Black Economy Taskforce (the Taskforce) considered that number outdated and the ‘black economy’ was as large as 3 per cent of GDP or about $50 billion based on identified trends.
The black economy imposes a significant cost to the nation, and in particular to honest businesses and consumers. Our response will be to support the ABN system that is fit for purpose as required by business, consumers and government. Importantly, we will stress the design of the ABN must not impose significant new compliance or regulatory obligations, fee for service or cost recovery on business to capture miscreants.
Recently, I met with Australian Financial Security Authority officers who make a practice of visiting stakeholders on a regular basis for a general discussion on the Personal Properties and Securities Register (PPSR). This time, they advised on new initiatives relating to motor vehicles on the Register and fee changes. In the near future, the PPSR will include a new feature that highlights all outstanding recalls for Takata Airbags. This will enable buyers to check if the vehicle has an outstanding airbag replacement under the recall. The second is that PPSR fees have changed and resulted in reductions in most areas affecting our members, including basic searches and registering an interest.
Divisional News
Generally, the MTA Queensland’s industry divisions in their quarterly Board reports indicated a positive economic outlook for either their sector or region.
Encouragingly, The Far North and Central Queensland region representatives were upbeat as result of strong resource commodity prices and infrastructure developments either underway or pending.
The Rental Vehicle industry division, which has had to work its way through several disruptions, is starting to see underlying strength in the rental markets flowing from the infrastructure and mining sector’s project investments.
Additionally, technology, management of aggregator website pricing, and suppling vehicles to ride sharing groups were helping to improve the ‘bottom line’.
There is rising confidence in the industrial machinery sector of the Farm and Industrial Machinery division due to the large numbers of government tendered works across most areas of the state. These range from major highway upgrades, coal seam gas developments and solar power and wind farm developments. The Automotive Parts and Recyclers division has experienced a ‘tough time’, but the view expressed is that ‘predominantly the industry appears to be progressing well.’ There was a caveat, that ‘profitability is down’.
Whilst overall confidence was prominent, we have industry divisions with members experiencing bleak economic circumstances. The farm machinery sector of the Farm and Industrial Machinery division reported that the drought had ravaged both machinery sales and crop plantings. For example, the Darling Downs has had little if any winter crop planted and this is the first year in 50 years where this has occurred.
The prolonged dry has dampened spirits and optimism and is holding back investment in new equipment.
Our Motorcycle industry division too, is experiencing a downturn with an ongoing decline in the new product market for the last six months of the financial year with the entire market down 6 per cent.
Each division has industry issues to be worked through.
For our Service Station and Convenience Store Association, drive-offs (the non-payment of fuel) has long been an unresolved matter. Advancements in technology could result in automatic scans of vehicle number plates, cross matched to databases, that will indicate if the vehicle has been involved in previous drive off or non-payment activity.
An on-going issue that has engaged our Motorcycle Industry Division is the increasing deaths and serious injuries from all-terrain-vehicle (ATV) motorcycles. All parties – ATV dealers, distributors and the Australian Competition and Consumer Commission are considering ways to reduce these through education, minimum performance standards and crush protection devices. There is unanimity on the first two, but a divergence of opinion relating to the latter which will be the subject of ongoing discussions.
Referring again to the Takata Airbag Recall, our Automotive Parts Remarketing Division reports that it is a major issue for the industry. The continued expansion of the makes and models affected by the recall by the manufacturers has seen most members in the division impacted, with vehicles in stock requiring airbag replacement prior to resale to the public. Whilst an ongoing problem for some time yet, progress is being made in reducing the number for defect airbags. In mid-August, nearly half – 45 per cent – of the defect airbags had been replaced, with the government advising that there are now 146,000 fewer malfunctioning airbags in vehicles than this time a year ago. In total now, around 247,000 vehicles have been completed. The government anticipated for the recall to be completed by the end of next year.
Finally
Almost 60 per cent of Queensland is drought declared. Across that area, MTA Queensland has members who rely on the resilience of the industries, the communities and the people who sustain their businesses. We look to the heavens for more blessed rain that will break the drought cycle and restore business confidence and uplift spirits.
Until next month, take care and stay safe.