The Victorian Automobile Chamber of Commerce (VACC) says prime minister Scott Morrison’s business hibernation package announced on March 27 doesn’t go far enough because many car dealers are frozen out of the assistance thresholds.
The rental and tax freezes will provide many small and medium enterprises with a necessary respite, but many other larger businesses don’t qualify.
“The issue for medium and larger businesses in the automotive industry is that those enterprises are the bigger employers and they are having to let go or stand down higher amounts of staff,” says VACC chief executive officer Geoff Gwilym.
Recently, one dealer group in Victoria had let go of more than 400 employees and Gwilym says this will only get worse.
“Medium and large-sized enterprises have costlier rents and bigger outgoings. Federal and State Governments need to protect these businesses as well, along with small-to-medium-sized enterprises,” he says
“Preliminary survey results show that approximately 70% of VACC-member new-car dealerships are missing out on payroll threshold and cash flow assistance. And this was a market that was already experiencing a downturn of almost 12% before the Coronavirus situation.
“Logic dictates that because car dealers sell more expensive products that their turnover will be higher. The margins in these cars is almost negative in some instances. Bigger staff levels to service the key operational departments within each dealership means more employees, and more payroll. Dealers shouldn’t be penalised as a result. Big employers are not getting a fair go.
“VACC is asking prime minister Morrison – when he meets with treasurer Josh Frydenberg over the coming days to establish the ‘fine print’ of the assistance package – to consider the enormous contribution larger businesses make to the economy and that the Federal Government offers appropriate assistance at this very difficult time,” says Gwilym.
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