Vehicle buyers could be forced into high interest rate lending solutions, or will simply buy off-shore, if a recommendation from the Royal Commission into the finance sector is adopted, say peak bodies the Victorian Automobile Chamber of Commerce (VACC) and the Australian Retailers Association
Transparent consultation from Treasury and ASIC before any measures are put in place, as well as a guarantee that existing Point of Sale Exemptions will be maintained, is the right move for Government and consumers.
In the Final Report, it is Recommendation 1.7 – Removal of point-of-sale exemption that has brought the two associations together, in a bid to ensure the interests of consumers, as well as their sectors, are protected.
“If this recommendation is rolled-out, any costs incurred will flow on to consumers – that’s the reality. Consumers will turn to high-interest lending or potentially they will start purchasing off-shore – that’s the last thing we need in the current economic climate,” said VACC CEO, Geoff Gwilym.
Recommendation 1.7 would essentially see retail vehicle dealers acting as brokers for loan applications and, therefore, would be required to hold an Australian Credit Licence and comply with the National Consumer Credit Protection Act.
“No regime should demand individual licensing requirements for individual businesses. It is neither practical nor reasonable for Australians trying to run a business, particularly for vehicle dealerships in regional areas,” maintains Gwilym.
VACC and ARA seek a positive commitment from Government that it will not abolish the Point of Sale Exemption, introduced as an interim measure in 2009/10, as part of the National Consumer Credit Protection reforms.
ARA Executive Director, Russell Zimmerman is incredulous. “Why short-change the service currently offered at retail level? At the end of the day it is the finance company which is the licence holder of the entity responsible for any breaches against regulations.
“The implementation of this recommendation would result in a red-tape disaster for both retailers and government.”
VACC and ARA are voices of reason and expertise – representing an automotive industry that contributes $37 billion per annum to Australia’s GDP, and the country’s $310 billion retail industry sector respectively.
Having welcomed the establishment of the commission, following revelations of misconduct within several Australian financial institutions, both bodies are now united in the call for a thorough and practical approach to findings.