A conditional extension to the Instant Asset Write Off scheme will provide a once in a generation opportunity to improve road safety outcomes and productivity all whilst stimulating the economy and saving jobs.

Heavy Vehicle Industry Australia (HVIA) and the Australian Trucking Association (ATA) have put the case to the Australian Government in a joint letter, requesting an extension to the Instant Asset Write Off scheme incentives announced during the Government’s first wave of stimulus measures in response to the COVID-19 pandemic.

HVIA Chief Executive Todd Hacking said both organisations had strong policy positions in relation to improving heavy vehicle safety.

“We believe that any increased asset threshold for heavy vehicles should only be available to purchases that have accompanying safety and productivity benefits,”

Mr Hacking said.

The temporary changes to the Instant Asset Write Off announced in early March extended the available instant asset write off from $30,000 to $150,000 but is due to expire on 30 June 2020.

The letter proposes a revised scheme with an extension until 31 December 2020 and an increased threshold.

The letter explains that transport operators are continuing to express nervousness to spending on capital equipment.

“More than 90 per cent of purchases in our industry is financed, so ensuring transport operators can get access to capital is an important aspect of equipment purchases,” ATA Chief Executive Mr Ben Maguire said.

“This will only be possible once the economy is in recovery mode and operators are trading as normal.

“Most of the fleet is held by small enterprises – and they were not able to use the stimulus before the pandemic hit.”

Mr Hacking said the scheme and the accompanying 50 per cent bonus depreciation schedule had less than 10 days from their announcement to the dramatic escalation of the pandemic.

“In order to kickstart the economy and increase business confidence the Instant Asset Write Off extension needs to be extended until at least 31 December 2020,” Mr Hacking said.

“Our survey results show that operators and manufacturers did not have time to utilise the stimulus.”

Mr Maguire says that also increase the limit for truck purchases would have the dual benefit of positively altering the age of the fleet.

“The ATA has suggested a threshold of $450,000 as this would ensure 100 per cent deductibility for most – if not all heavy-duty trucks in Australia,”

Mr Maguire said.

Mr Hacking said HVIA supported the higher threshold subject to conditional eligibility.

“We believe that our proposed eligibility criteria for the extended incentives, conditional on safety features, provides the opportunity for the biggest increase in safety and productivity in Australian heavy vehicle history,” he said.

“HVIA and the ATA have consulted with National Transport Insurance (NTI) who are supporters and partners of both organisations,” Mr Maguire said.

“We have identified the features which would lead to the highest increase in safety outcomes according to their research.

“We fundamentally believe this would be a massive win – not only for the economy – but for the broader community as well.”

Source: Heavy Vehicle Industry Australia