The executive director of the Motor Trades Association of Australia (MTAA Ltd), Michael Delaney, has admitted the body cannot continue in its current form following the resignation of the NSW Motor Traders Association in December, and has proposed it be rescued by the $6 billion MTAA Super, the buyer of MTAA Ltd’s secretarial services for which Delaney also acts as principal executive officer and fund secretary.

The resignation of the NSW MTA has cost MTAA Ltd $600,000 in annual subscription fees. The earlier withdrawal of the Victoria/Tasmania and Queensland motor trader associations in 2007 and 2008 respectively is understood to have left the body an additional $800,000 poorer each year, to the point where Delaney himself, in a letter to MTAA Ltd’s directors dated January 11 and obtained by I&T News, said the Association “can hardly be said to be any longer fully representative and possibly…financially viable”.

Delaney reminded directors that the Association’s current overheads were $2.2 million annually, of which $1.2 million was covered by the “margin on the services contract” with MTAA Super. However following the withdrawal of NSW MTA, remaining member groups now only provide an additional $345,000 in subscriptions, meaning “we cannot continue at the level of service, output and product as before, [and] we cannot fail to redesign and reconstruct the Association or it will dissolve”.

He pointed out the Association “must be continued in some form as it is the owner of the Trustee of [MTAA Super]. The only alternative is that the Trustee would become an independent trustee with no connection to the motor trades or automotive industry.”

Rather than cut the required $550,000 from annual costs, which would involve himself and several other staff being made redundant, Delaney suggested MTAA Ltd offer a new service agreement to MTAA Super, which could involve “the takeover of all the Association’s personnel and operations on some basis of mutual agreement”, and “presumably” the cessation of many services not related to super.

Observers with knowledge of the proposal predicted that retaining all the present MTAA Ltd staff, on all their exisitng employment conditions and entitlements, would result in a big fee increase for MTAA Super’s members. However Delaney seemed to anticipate this criticism in his letter to MTAA Ltd directors.

Acknowledging that MTAA Ltd should recognise the “benefit” it would receive if MTAA Super “speedily” insourced its secretariat, Delaney suggested something the Association could give fund members in return.

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