‘Critical’ tax break extended to tradies
The car industry has welcomed an extension to a tax break credited with keeping dealers afloat during the coronavirus crisis.
Businesses can claim an instant asset write-off on work vehicles until the end of the year, accelerating the depreciation they claim on new cars to put cash in their pocket.
While the system does not subsidise the purchase of vehicles, it gives businesses the opportunity to compress several years of tax claims into one refund issued soon after the vehicle is used.
Introduced in March 2020 and originally slated to expire on June 30, the stimulus program will continue until December 31.
Car dealers said the program proved vital to keeping people employed in recent months, with Motor Traders' Association of NSW chief executive Stavros Yallouridis describing it as "critical for Australian small businesses".
The Federal Chamber of Automotive Industries said the extension was "great to see" following 26 consecutive months of negative growth in new car sales.
FCAI chief executive Tony Weber said the automotive industry "has been in decline for some time".
"We need to kick start the new vehicle market by stimulating new vehicle purchases, and the instant asset write-off is an important tool in this process," Mr Weber said.
"We would like to see small businesses follow through on their pre-COVID investment strategies, and replace their older vehicles with new, safer, and more efficient models."
Mr Weber and Australian Automotive Dealer Association chief executive James Voortman led calls for the program to be extended in recent weeks.
Mr Voortman said the extension was "very welcome news for car dealers".
"We hope that this will help our industry recover from the significant downturn we have experienced in new car sales," Mr Voortman said.
"I would like to congratulate the Government on this announcement which will encourage businesses to invest during a time in which our economy will need it."
While commercial vehicles worth up to $150,000 are eligible for the program, there is a limit on the cost of regular vehicles. The AADA said it will continue to lobby to remove an upper limit of $57,581 on conventional cars that may discourage businesses such as luxury car transfer companies from upgrading vehicles.
Originally published as 'Critical' tax break extended to tradies