A bonus investment allowance in the forthcoming budget would incentivise capital investment on heavy vehicle factory equipment and for operators purchasing trucks and trailers.
Heavy Vehicle Industry Australia (HVIA) has asked Treasurer the Hon Josh Frydenberg MP for a 20% bonus investment allowance in the first year of the depreciation schedule.
HVIA Chief Executive Todd Hacking says that the incentives should be applied in the 2020-21 budget and would be applicable to all capital purchases depreciable under current tax law.
“This would be for our members purchasing equipment to put in their factories or for operators purchasing new trucks or trailers,” said Mr Hacking.
“An investment allowance of this nature not only stimulates our industry but the community benefits from the safety and environmental benefits that come with the purchase of newer, more modern, more productive and safer heavy vehicles.
“It continues to be of grave concern to HVIA that Australia’s heavy vehicle fleet is amongst the oldest of developed nations at 14.9 years,” Mr Hacking added. “Part of the reason for this is there is not an incentive to purchase new equipment or to upgrade the fleet.”
HVIA President John Drake met with the Treasurer last week to present the case for the bonus investment allowance to stimulate the heavy vehicle industry and change investment decisions.
“This has the additional benefit of encouraging our manufacturing members to invest in the plant and equipment to ensure more productive, sustainable processes and improves the capacity to include new technology and innovation into the heavy vehicle fleet,” Mr Drake said.
“We feel this is the easiest, most efficient way to stimulate the economy in a way that will change purchasing decisions but with a huge safety, productivity and environmental gain in addition.”
The submission also addresses the disparity in the Capped Effective Life for depreciation of trailers over 4.5 Tonnes (10 years) when compared to all other commercial vehicles (7.5 years). “HVIA is of the view this should be made uniform but our preference is for the investment allowance as it has the better chance of impacting purchasing decisions and seems a more efficient way of stimulating the economy,” Mr Drake said.
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