16 August 2017

New ‘Effects Test’ to help Crash Repair Sector

The Motor Trade Association of South Australia has today welcomed the introduction of an ‘effects test’ into Australia’s competition laws.  

MTA CEO Paul Unerkov said the changes prohibit a corporation from engaging in conduct with the purpose, effect or likely effect of substantially lessening competition in a market in which it directly or indirectly participates. 

“The MTA has consistently advocated for the introduction of an ‘effects test’, particularly during the Senate Inquiry into the Future of the Australia’s Automotive Industry, as an the most effective way to curb the imbalance of power insurance companies have in the crash repair sector,” Mr Unerkov said.

“The concentration of power by the two major insurers has led to a massive decline in the viability and number of independent crash repairers across South Australia and the country.”

“The changes will also likely have additional benefits for other sectors of the automotive sector, particularly those in franchise situations.”

“With over 96 per cent of automotive business in Australia small, family owned enterprises, this reform will give them a stronger voice in determining their future sustainability.”

“The MTA calls on the ACCC to use its new powers under Section 46 of the Australian Competition and Consumer Act 2010 to take the necessary action against insurers to ensure competition and sustainability in the crash repair sector.   

“The MTA congratulates the Federal Government on successfully navigating this much needed legislation and helping protect the interests of automotive small businesses.”