Trucking in line for Covid-19 financial relief


Economic response aims to incentivise business investment

Trucking in line for Covid-19 financial relief
Producers and operators, like Moffatt Farms, are set to benefit from today’s announcement. Pictured: Federal treasurer Josh Frydenberg and assistant freight transport minister Scott Buchholz

 

Treasury has moved to temper the economic impacts of Covid-19, announcing a stimulus package including business measures targeting asset write-off, depreciation, cashflow and apprentice/trainee wage support.

The Australian government's expenditure of $17.6 billion represents 0.9 per cent of annual gross domestic product (GDP), it says.

The business-specific measures involve:

  • 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
  • the introduction of 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
  • cash flow assistance for employers that will provide up to $25,000 (tax-free) back to small and medium-sized businesses (with a turnover of less than $50 million), with a minimum payment of $2,000 for eligible businesses
  • eligible employers are able to apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to nine months from January 1, 2020 to September 30 , 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.

A one-off payment of $750 is also available to social security, veteran and other income support recipients and eligible concession card holders.

INITIATIVES WELCOMED

The general consensus from transport and logistics peak bodies is the measures are realistic and timely.

"The COVID-19 pandemic has hit the trucking industry hard," Australian Trucking Association (ATA) Geoff Crouch says.

"Container operators are reporting drops in volume of 70 to 80 per cent.

"Interstate freight, which was already low, has plummeted in the last few weeks.

"This is a targeted, positive and proactive measure that will make a real difference to Australian communities."


How the coronavirus impact started to be felt in transport, here


In particular, Crouch and Heavy Vehicle Industry Australia (HVIA) chief executive Todd Hacking spotlight incentives for equipment purchases.

"The new 50 per cent investment allowance is a win for the ATA and every trucking business," Crouch says.

"The allowance will encourage trucking businesses to invest in new trucks and trailers and reflects the key arguments we put forward in our recent brief to the Treasurer.

"The allowance will significantly boost the sale of new trucks and trailers. Many of them will be made in Australia, by Australians.

"The purchase of these new trucks and trailers will not only deliver an economic boost at a time of extreme financial stress; they will improve road safety because new trucks and trailers have better safety equipment."

Hacking adds:  "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.

"Business will emerge out of this downturn and it is crucial that our skilled workforce are protected."

CHINA RECOVERY

According to the Victorian Transport Association (VTA), the measures should sustain demand for consumer goods, building, construction and other raw materials as China shows signs of gradual recovery.

"The transport sector had been hit hard by the impacts of the coronavirus on domestic and international supply chains, with imports and exports experiencing short-term declines due to a reduction in demand from China during the peak of the outbreak there," VTA CEO Peter Anderson says.

"I urge any transport operator experiencing hardship to contact to take advantage of support that is now available, and to contact the VTA or their state-based transport association for guidance and assistance during this challenging time."

His statement has been echoed by other state associations including the Queensland Trucking Association (QTA), Western Roads Federation (WRF) and Northern Territory Road Transport Association (NTRTA). 

CURFEW CALL

Australian Logistics Council (ALC) CEO Kirk Coningham welcomes the response but calls for further measures, including "practical actions by governments at all levels", pointing at local government curfews on heavy vehicles prohibiting deliveries at night hours.

"Economic stimulus is important – but we also urgently need an injection of common sense around some of the planning and enforcement provisions imposed on freight movement throughout the supply chain," Coningham says.

"At the very least, local, state and federal governments need to work collaboratively and quickly to suspend curfews that restrict freight movement during the continuation of Covid-19 crisis, whether that is deliveries to retail premises, to homes, or the movement of freight to and from our ports, airports and other critical freight facilities.

"We would also request a halt to any enforcement activity associated with these curfews.

"Helping industry to get grocery items and other goods to consumers more quickly will send a clear signal to consumers that stock is available.

"This will help to discourage panic-buying and support the logistics sector’s broader efforts to enhance the resilience of Australia’s supply chains."

 

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