Manufacturers call for extension on investment allowance

Equipment manufacturers call for extension of deadline for the 30 percent investment allowance

By Michael House

Equipment manufacturers have called on the Rudd Government to extend the cut-off date of the 30 percent investment allowance, saying a lack of credit availability is hindering many companies from taking full advantage of the scheme.

The call comes as many transport operators scramble to improve their fleets prior to the June 30 deadline to claim the incentive as a tax benefit.

Michael Brockhoff, Managing Director of trailer manufacturer MaxiTrans, says while his company has received plenty of interest from potential customers the major intention of the initiative may be lost if the deadline is not put back.

"The 30 percent investment allowance has created an upsurge of interest in buying new equipment, but many trucking companies are having trouble getting credit to turn their interest into sales," says Brockhoff.

"We have urged the Government to extend the cut-off date for the 30 percent investment allowance.

"As a result of the credit shortage, it just hasn’t had enough chance to kick in."

Brockhoff’s concerns are shared by Roland Hollingsworth, the Managing Director of Paccar Financial, a division of Kenworth truck manufacturer Paccar Australia.

"We have applauded the Government’s investment allowance stimulus, but are mindful that it can only advantage companies that can access funding to purchase new equipment," Hollingsworth says.

"We are particularly concerned about the very high cost of wholesale funding for non banks, which drives up customer lending rates, adding further pressure to businesses already experiencing an overall downturn in freight volumes".

ATN has put in a request to the offices of Federal Treasurer Wayne Swan and Finance Minister Lindsay Tanner to determine if the possibility of an extension and is currently waiting for a response.

ATA Chairman Trevor Martyn says his organisation's next aim would be to lobby senators, especially those in the Coalition, to pass the investment allowance through parliament.

"The industry won’t get any of the benefits of the 30 percent investment allowance if it doesn’t get through parliament," Martyn says.

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