Fed: Inquiry launched into smash repair industry

AAP General News (Australia)
08-31-2004
Fed: Inquiry launched into smash repair industry

CANBERRA, Aug 31 AAP - The federal government will hold an independent inquiry into
the multi billion-dollar smash repair industry, raising the prospect of new national rules
for insurance companies.

Treasurer Peter Costello and Small Business Minister Joe Hockey said the Productivity
Commission would look at the relationship between insurers and smash repairers and report
back within five months.

The inquiry comes after concerns about the ability of consumers to choose who carries
out repairs, the awarding of "preferred smash repairer" status, and rock-bottom pay rates
compromising the quality of repairs.

"Smash repairers have told me that they are concerned about their ongoing viability
as a sector," Mr Hockey said.

"They are worried about the difficulties they face when presented with commercial arrangements
over which they feel they have no control."

Repairers say the hourly rate of $23 an hour paid by insurers has not changed in 13
years and forces some firms to use second-hand parts. They have also complained about
delays in payment.

The inquiry will look at setting out specific rules for insurers and smash repairers,
after calls for a national code of conduct.

"Where appropriate, recommendations should be made for improving the relationships
between insurance companies, smash repairers and consumers, including possible regulatory
approaches that take into consideration the need to keep red tape at a minimum," the terms
of reference say.

The inquiry will also consider the criteria for awarding preferred repairer status,
the transparency of the process and scope for setting national standards.

Insurer Allianz urged the government to consider paying out repairers which could no
longer compete, like structural assistance packages paid to sugar farmers.

Corporate affairs manager Nicholas Scofield said a national code would not help address
repairers' concerns with individual insurance companies.

"The repairer industry itself has acknowledged that there is an oversupply of repairers
and that some are struggling with the need to adopt modern business management practices
and new skills and technology," he said.

AAP kmh/sw/cjh/jlw

KEYWORD: SMASH

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