The Motor Trades Association of Australia said the delays could push delivery into the next financial year. This would void the ability for consumers to qualify for the instant asset write-off (IAWO) for the current financial year.

The MTAA, supported by other industry bodies including the Victorian Automotive Chamber of Commerce, has written to the federal treasurer Dr Jim Chalmers asking for an extension to the IAWO to ensure consumers do not miss out if vehicles – including motorcycles, trucks and agricultural machinery – have delayed deliveries.

The MTAA wants adjustments for the IAWO by granting an exemption for eligible users with confirmed orders in place with agricultural machinery, truck, motorcycle or new car dealers.

These consumers qualify for the IAWO but their ordered vehicles will not land in Australia until after June 30, 2023. 

In the letter to the treasurer, the MTAA’s CEO Richard Dudley said the association “respectfully” suggests such adjustments would also apply for any eligible vehicle or machinery ordered before June 30, 2022 with the same uncertainty on delivery.

The MTAA said that the IAWO was “a welcome and enduring initiative first introduced by the Rudd Labor government.” It said it was now more crucial than ever in providing stimulus for Australian businesses to recover. 

The MTAA – which represents Australia’s 70,000 retail, service, repair, recycling, and associated motor trades businesses – said it urgently required intervention and consideration. If not, it said, it would impact on the effective use of IAWO and stalling recovery across several industries.

“The MTAA is aware that many significant purchases of vehicles, trucks and agricultural machinery are currently stalled because of uncertainty caused by an IAWO requirement that eligible assets must be in use or installed and ready for use before June 30, 2023,” the MTAA said in a statement.

“MTAA is receiving increasing evidence that vehicles, trucks, and particularly agricultural machinery ordered over recent months or under consideration are unlikely to land in Australia until after June 30, 2023, rendering the asset ineligible. It is this potential that is causing uncertainty over the IAWO.”

The association said the current issue mirrored an identical situation in 2020/21 when immediate COVID-19 shutdowns created supply chain blocks and disruption, most of which are still being experienced today. 

“Raw materials, parts, and components (including semiconductors) for motor vehicles, trucks, and agricultural machinery production are included,” it said.

“In addition, there is evidence that agricultural machinery manufacturers are fulfilling orders to more prominent, influential, and profitable markets, including Asia and North America, with Australian orders delayed. 

“Combined with evidence that freight/cargo companies appear to be diverting available assets to other international routes due to container shortages and capacity issues is adding to uncertainty regarding delivery timeframes.

“Australian dealers would be more prepared to accept some of these uncertainties if the one posed by the eligibility date of the IAWO was removed.”

By Neil Dowling