Heavy vehicle industry praises incentives to activate business spending

The Australian Governments Coronavirus stimulus package announced today has pulled the right levers to encourage spending according to Heavy Vehicle Industry Australia (HVIA).

HVIA Chief Executive Todd Hacking said the tax incentives for equipment purchases will incentivise spending by the industry’s customers, enable investment by manufacturing businesses and protect jobs.

“The current disruptions place the world economy on something of a precipice,” Mr Hacking said.

“The Australian Government’s stimulus package is a realistic and well-timed response, giving our economy the shot in the arm it needs and that will protect business and jobs.

“It is essential that every one of us plays our part in the keeping the economy pumping and that’s why these tax incentives are about purchasing equipment now.

“The extension of the incentives to include all businesses with a turnover up to $500 million means the cycle of spending incentives will work up and down the supply chain.

“The Government has also shown its understanding of industry by putting into place a series of measures to protect apprentices and other new starters.

“Business will emerge out of this downturn and it is crucial that our skilled workforce are protected,” Mr Hacking said. “The Government have announced sensible measures to work with business to keep staff at work.”

Australia is a world leader in many aspects of heavy vehicle transport. We have a thriving and robust local industry that comprises hundreds of innovative trailer, specialised vehicle, component, equipment and technology manufacturers and suppliers in addition to the product assembly of global heavy vehicle brands such as Volvo, Mack, Kenworth, DAF and Iveco.

Australia’s Heavy Vehicle Industry directly employs over 36,000 people and manufactures, services and repairs some of the world’s most efficient, safe, innovative and technologically advanced vehicles.

“We understand that people are nervous about the unknowns and it is not unusual for business to respond cautiously to the sort of news that has been across our airwaves recently,” Mr Hacking added.

“However, the sun will keep rising and for our industry that means the freight task will need to be taken care of.

“Our members and their customers are the key to keeping the wheels of the nation’s economy moving through a fully functional supply chain.”

  • Increasing the instant asset write-off – From today, the Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
  • Backing business investment – The Government is introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
    • Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
    • These two measures will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees.
  • Cash flow assistance for businesses – This assistance will support businesses to manage cash flow challenges resulting from the economic impacts of the Coronavirus and help businesses retain their employees.
    • These two measures are designed to support employing small and medium enterprises and to improve business confidence.
  • Boosting cash flow for employers – The Boosting Cash Flow for Employers measure will provide up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses.
    • The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff.
    • The payment will be tax free.
  • Supporting apprentices and trainees – Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
    • Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
    • This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

Source: https://treasury.gov.au/sites/default/files/2020-03/Overview-Economic_Response_to_the_Coronavirus.pdf

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