MTA NSW Group calls for six-point automotive reform plan in 2026–27 Federal Budget

The MTA NSW Group has warned that Australia’s automotive sector risks falling further behind unless six targeted reforms are adopted in the 2026–27 Federal Budget.

In its formal Pre-Budget Submission, the organisation outlines workforce, regulatory and investment measures that are critical to addressing a national skills shortage of more than 38,000 technicians while supporting the transition to lower-emission vehicles.

The six strategic priority areas are:

1. Workforce Development and Skills Investment
2. Fair Trading Frameworks for Automotive Businesses
3. New Vehicle Efficiency Standard Implementation
4. Zero-Emission Transition Support for Small Business
5. Taxation Reform for Automotive Retail
6. Circular Economy and Vehicle End-of-Life Management

MTA NSW Group CEO, Mr Stavros Yallouridis, said the industry is being asked to manage structural change without the workforce capacity required to sustain it.

“The automotive sector accounts for around 18 per cent of Australia’s CO₂ emissions. Without significant reductions in this sector, the Federal Government will not achieve its legislated net zero targets,” Mr Yallouridis said.

“But we’re also facing a national skills shortage exceeding 38,000 positions. If businesses cannot recruit and retain qualified technicians, service capacity tightens, waiting times increase, and costs rise across the supply chain.”

Representing more than 3,200 businesses and 35,000 workers in NSW, and more than 250 businesses in the ACT, the Group said these pressures are being felt nationally, particularly by small and regional operators managing rising compliance, training and equipment costs.

Representing automotive businesses across NSW and the ACT - jurisdictions that together account for more than a third of the nation’s GDP - the MTA NSW Group advocates for Australia’s largest automotive workforce, the highest number of automotive businesses and the largest vehicle fleet. The Group said the issues raised in its submission reflect pressures being felt across the industry nationwide, particularly by small and regional operators.

The submission calls for restoration of the Priority Hiring Incentive to $15,000 with retention-linked milestones, following its reduction to $2,500 from January 2026. It also proposes federally funded school pathway programs, structured mentoring, a 50 per cent reduction in the Skilling Australians Fund Levy for committed employers, enhanced support for mature-age apprentices, expanded low-emission vehicle training infrastructure, and targeted initiatives to increase women’s participation in automotive trades, where representation remains between three and nine per cent.

“These measures go directly to supply - getting more qualified people into workshops and keeping them there,” Mr Yallouridis said.

The Group has welcomed the Government’s extension of Unfair Contract Terms and Unfair Trading Practices protections to franchised businesses, as well as the move toward point-of-sale compliance under the New Vehicle Efficiency Standard (NVES). It is calling for comprehensive implementation, adequate enforcement resourcing and biennial NVES reviews aligned with Commonwealth budget cycles.

“The NVES is a significant reform. It must remain workable and responsive to global market conditions,” Mr Yallouridis said. “Regular review and clear systems reduce unintended pressure on dealers and ensure compliance reflects real-world trading conditions.”

To support the zero-emission transition, the submission proposes a $50,000 instant asset write-off for EV workshop equipment, grants of up to $25,000 for facility upgrades, and a $3,000 tool allowance for EV-qualified technicians. It also calls for extending support to motorcycles, caravans and agricultural equipment, and continuing the general instant asset write-off beyond June 2025.

“Workshops are investing now in new equipment and training. These are significant capital decisions,” Mr Yallouridis said. “Stable and practical support measures allow businesses to invest with confidence and maintain safety and compliance standards.”

The submission further recommends abolishing the Luxury Car Tax. It also proposes 50 per cent accelerated depreciation for zero and low-emission vehicles and development of a nationally consistent road user charging framework, including a 7,500-kilometre exemption for licensed motor car traders using zero and low-emission vehicles as demonstration stock.

In addition, the Group is calling for a comprehensive end-of-life vehicle product stewardship scheme, an EV battery stewardship framework and mandatory national tyre stewardship arrangements. Approximately 850,000 vehicles reach end-of-life annually in Australia, generating an estimated 1.36 million tonnes of waste, with recovery rates sitting at around 70 per cent.

“As the national fleet transitions, end-of-life management becomes more complex and more important,” Mr Yallouridis said. “Consistent national settings will support environmental outcomes while providing certainty for businesses operating across the vehicle lifecycle.”

The MTA NSW Group said its six priority areas form a coordinated reform agenda aimed at strengthening workforce capability, supporting small businesses and ensuring the automotive sector can meet both economic and environmental objectives nationwide.