VACC condemns ESC decision that fails to address mounting cost pressures facing Victorian Towing Industry
29 August 2025
Melbourne - The Victorian Automotive Chamber of Commerce (VACC) has expressed serious disappointment with the Essential Services Commission's final decision on accident towing fees, which despite mounting evidence of unsustainable cost pressures facing the industry, has maintained current fee structures.
This means that Victorian motorists could face significantly longer wait times for accident clearance and reduced service quality under a decision by the Essential Services Commission (ESC) that industry leaders warn will drive operators out of business and compromise road safety across Melbourne.
The ESC's final report, released this week after a three-month delay, recommends only minor indexation increases to existing fees, a decision VACC CEO Peter Jones said falls well short of addressing the financial realities confronting accident towing operators across metropolitan Melbourne.
"We are deeply concerned that this decision overlooks the genuine cost pressures our members are experiencing and may jeopardise the long-term sustainability of accident towing services in Victoria," Mr Jones said. "The ESC appears to have dismissed compelling evidence that demonstrates the current fee structure is no longer adequate to cover basic operational costs."
The VACC's comprehensive submission, supported by detailed economic analysis from Deloitte, highlighted significant cost increases since 2021: diesel fuel prices have risen by 34%, insurance premiums have increased by 22%, labour costs in the transport industry have grown by 26% (double the average wage growth), and industrial land rents in Melbourne have surged by 64%. The organisation recommended adopting the fee structure recently implemented in Western Australia, following their comprehensive cost review.
"We provided the ESC with a practical, evidence-based solution that has already been successfully implemented in another jurisdiction," Mr Jones said. "We are disappointed that this recommendation was not given the consideration we believe it warranted, particularly given the thorough consultation process undertaken in Western Australia."
The decision also overlooks the increasing complexity posed by electric and hybrid vehicles. Towing accident-damaged EVs requires specialised equipment, training, and safety protocols that significantly increase operational costs. These vehicles must be stored with 15-metre isolation zones, which substantially reduces storage capacity and increases overhead expenses.
VACC survey data reveals that 78% of accident towing operators indicate current fees are insufficient to cover their operational costs. Many operators are subsidising their accident towing operations through other business activities, creating an unsustainable business model that raises questions about the industry's long-term viability.
"Our primary concern is ensuring Victorian motorists continue to receive timely, professional accident towing services," Mr Jones said. "If operators are unable to maintain financially viable businesses, this could result in longer response times, reduced service quality, and ultimately impact road safety and traffic management across Melbourne."
The VACC acknowledges the ESC's regulatory role but questions whether the current benchmarking approach adequately reflects Melbourne's unique operating environment and cost structure. "We believe a comprehensive cost-of-service review would provide a more accurate foundation for setting appropriate fees that balance consumer protection with industry sustainability," Mr Jones said.
The VACC remains committed to working constructively with government and regulatory bodies to ensure the accident towing industry can continue to provide essential services to Victorian motorists while operating on a financially sustainable basis.
ENDS
View the full VACC Submission here:
Media contacts
Andrew Molloy
Manager Marketing & Communications
P. 03 9829 1248 | M. 0457 188 375 | E. [email protected] | W. vacc.com.au
Karla Leach
Executive Manager, Marketing and Communications
P. 03 9829 1247 | M. 0429 334 832 | E. [email protected] | W. vacc.com.au
About VACC
Founded in 1918, the Victorian Automotive Chamber of Commerce (VACC) represents over 5000 businesses in Victoria and Tasmania who employ more than 50,000 people. Member businesses range from new and used vehicle dealers, repairers, vehicle servicing, parts and component wholesale/retail and distribution and aftermarket manufacture, tyre dealers and automotive dismantlers and recyclers.
VACC develops the future workforce, employing 560 apprentices and trainees through its group apprenticeship scheme, and maintains memberships with the Motor Trades Association of Australia and Australian Chamber of Commerce and Industry and contributes to the national policy debate through these leading industry associations.