Industry leaders have praised the Federal Government’s decision to extend the expanded instant asset write-off until the end of the year.

The program was due to end on 30 June 2020, but with the country entering the recovery phase of the COVID-19 pandemic, the expanded instant asset write-off measure is seen as a key component in reinvigorating the economy.

Businesses with an annual turnover of less than $500 million will now be allowed to immediately write-off the cost of assets of $150,000 or less until the end of December.

The extension has been welcomed by the Australian Automotive Dealers Association (AADA), who have been lobbying for additional measures to support the new car sales market following 26 consecutive months of weakening sales.

“This is very welcome news for car dealers,” said AADA chief executive officer James Voortman.

“We hope that this will help our industry recover from the significant downturn we have experienced in new car sales.

With the end of the financial year fast approaching, Voortman urged businesses to take advantage of the instant asset write-off, saying there was deals to be had.

“I would urge eligible businesses looking to invest in a vehicle to do so before the end of the financial year as there are some very good deals to be had.”

The Federal Chamber of Automotive Industries (FCAI) were also pleased with the news of the extension, with chief executive Tony Weber believing the program was vital in kick-starting the struggling new vehicle market.

“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 the process,” said Weber.

“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.

With the instant asset write-off extended until the end of 2020, AADA has turned their attention to pushing for the removal of the $57,581 limit which applies to vehicles under the instant asset write-off.

“While this is very welcome news, we will continue to call on the government to remove the car limit of $57,581 which applies to the instant asset write-off. There is no justification for a car limit. There are no limits on other goods, and we’ll be asking the government to review this,” said Voortman.

Source: Autotalk | New car dealers welcome write-off extension

10 June 2020