Newsletter No. 21 – February 27, 2017

Around the mid-1970s, the Central Intelligence Agency recognised their need for a better tool to help CIA analysts produce the best possible solution to problems where lack of precise data resulted in high levels of uncertainty – a typical situation in intelligence gathering.

Experience showed that lapses in reasoning could risk catastrophic outcomes. Unless all possible answers were considered, people could die.

They didn’t want another “Bay of Pigs” ….

Dick J. Heuer, Jr., a 45-year veteran of the CIA, developed the Analysis of Competing Hypotheses tool (ACH) for use by the Agency.1 It proved phenomenally successful and today is widely used in business, academia and by government agencies – although, possibly not all government agencies…

The lesson for us, and possibly for those we deal with in government, is that it is dangerous to fit the known facts to only one hypothesis – the risk of bias is too profound. In our policy work at AADA we cannot allow our internal biases to blind us to the reality that plausible explanations for what we consider to be unfair focus on our industry might exist.

This might help us answer the ‘why pick on us’ question we often get asked and help us to make sure we avoid our own “Bay of Pigs” …

Over the last few months we have engaged in a series of important meetings with the Australian Securities & Investments Commission and the Australian Competition & Consumer Commission. These working meetings continue to focus on a long list of policy issues that have major significance for our businesses.

While this engagement was underway, senior leaders at both organisations made strong public statements signaling their regulatory priorities and outlining enforcement plans for 2017. We reviewed this information and other known government plans with the AADA Board of Directors and the Australian Motor Dealer Council in February to help us chart the wisest course for policy engagement in 2017.

These Board reviews combined with advice from Capital Hill Advisory leave us in no doubt as to where our focus will be this year.

Our primary efforts must again be on the Vital Six.

In a well-publicised ruling, ACCC announced plans to reject the ASIC-endorsed 20% commission cap on add-on insurance products proposed in the cartel application by the Insurance Council of Australia.

We see this as vindication of the logic in our submission to ACCC which argued that such a cap does nothing to address the key product design concerns contained in AISC Report 492.

We continue to participate in the ASIC add-on insurance working group that includes the Insurance Council, numerous insurance companies and many consumer advocate agencies. This group will continue to work on achieving a balanced outcome for all stakeholders when the final regulation exposure draft is complete. Timing is not clear at this date.

We are also in constant contact with senior ASIC Executives on the important decision on flex commissions. ASIC has indicated that we should expect an announcement in March.

In parallel to our work with the regulatory bodies, we are active with government ministers and other politicians in Canberra as well as supporting dealer members in their grass-roots meetings with local MPs. This is something we are keen to do whenever the opportunity arises – so please pick up the phone and don ’t go it alone. We have on-shelf material that will help you deliver our consistent policy messages.

We are well advanced in our work with Capital Hill Advisory in developing a comprehensive, professional Government Relations Plan for the next two years – something the AADA lacked previously.


AADA CEO David Blackhall with
Senator Mathias Cormann,

Minister for Finance and Deputy Leader of the Government in the Senate

In closing, I want to let you know that we will soon be coming to each capital city (and later regional centres) to conduct a series of ‘Town Hall Meetings’ with members.

At these events, Chairman Terry Keating and I will take dealers through the very latest status on the Vital Six, discuss State and local issues and talk about our plans to continue to grow AADA into a mature, fit-for-purpose advocacy organisation capable of delivering the most effective outcomes for new car dealers.

We are looking forward to seeing as many of you as possible in person. We will publish dates and venue details in the next couple of weeks – so please watch out for your ‘save the date’ advice and do your best to make the meeting. We want to hear directly from as many of you as possible.

In the meantime, as ever…I wish you…

Good luck, and Good Selling!

Kind Regards,

 

David Blackhall

Chief Executive Officer

Australian Automotive Dealer Association Ltd

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