In a keynote speech given on 18 March 2026 at the Australian Automotive Dealer Association (AADA) State of the Industry Briefing in Sydney, Prime Minister Anthony Albanese committed to legislating this year protections for new car dealers regarding:

• unfair trading practices;
• unfair contractual terms; and
• consumer law claim reimbursement from OEMs.

Before a large audience of automotive industry delegates hosted by AADA, and also attended by HWLE, Prime Minister Albanese relevantly said:

‘We need to listen to you and engage with you to make sure that Australian laws deliver a fair value for consumers and a level playing field for dealers. Because we know that in order to protect consumers from unfair practices, we have to protect dealers as well. This starts with Unfair Trading Practices.

At the last election we made a commitment to expand unfair trading practice protections to small businesses and traders covered by the Franchising Code of Conduct. This is about addressing a power imbalance. Correcting a double standard that the AADA has campaigned strongly against. And making sure that multinational manufacturers cannot engage in conduct towards dealers that would be illegal if it was directed at consumers.

We gave that commitment – and work is underway to deliver it.

Treasury have commenced the first round of targeted consultation – and will release the public discussion paper in April. After that, we want to take the next steps in weeks, not months. And we want any legislation or changes that are required to be done this year.

When we came to Government in 2022, we outlawed Unfair Contract Terms for small businesses and consumers. And – for the first time – gave the ACCC and ASIC the power to seek penalties against companies that breached these laws.

Now, we are building on that. Expanding these small business protections to include all franchise holders registered under the Franchising Code. The Government has heard directly from many of you about how difficult it can be for a local dealer to negotiate with a global manufacturer. As a result, too many dealer agreements include:

• unilateral variation clauses,
• excessive audit powers,
• termination rights that sit solely with Original Equipment Manufacturers.

Formal consultation on these reforms is complete.

As we move ahead, we will continue to engage with the AADA and directly with business owners, to get these changes right.

We will take this same co-operative approach, with Supplier Indemnification and Consumer Guarantees.

A dealer should not suffer a financial loss for doing the right thing by their customer. Manufacturers delaying approval, denying reimbursements, or trying to claw-back authorised payments.

Because if any manufacturers’ default position is to reject a franchise holder seeking reimbursement, then that creates a structural issue for the viability of a small business.

Addressing this imbalance is vital to strengthening Consumer Guarantees. And we will introduce this legislation to Parliament, this year. Australian consumers want a system that requires dealers to meet their obligations. We know that depends on manufacturers meeting their obligations to you.

The reforms you have campaigned for and the commitments we are delivering – are clear, practical and commonsense.’

The protections announced by the Prime Minister are much needed in the new car franchising industry. The recent Mercedes case found that dealers were treated unfairly in the change to from a franchise to agency model, but it was not unlawful due to the high bar that that has to be met under the unconscionable conduct prohibition in the Australian Consumer Law (ACL). Including a protection against unfair conduct in the Franchising Code will go a long way in protecting dealers from some of the more questionable behaviours engaged in by some OEMs which are otherwise deemed to be lawful under current laws.

The existing unfair contractual term (UCT) regime in the ACL does not automatically cover all new car dealers. Changing the law to ensure new car dealers benefit from the UCT protections will help to make Dealer Agreements fairer and more commercially balanced.

Many dealers also face difficulties in efficiently resolving ACL consumer guarantee claims with customers due to the difficulty in enforcing the indemnity rights against OEMs in the ACL that are supposed to protect dealers – given they are not the manufacturer of the vehicle. Dealers also often find it difficult to get some OEMs to actively assist them in resolving consumer guarantee claims. Clearer and more certain indemnity rights would greatly assist in the faster resolution of consumer guarantee claims and better protect dealers from the financial loss they may suffer from such claims when they are not the manufacturer of the vehicle.

This article was written by Evan Stents, Lead Partner – Automotive Industry Group.