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BUDGET: Vehicle allowance gets cautious welcome

News of $5,000 depreciation allowance for small businesses buying new vehicles receives cautious welcome from manufacturers

By Gary Worrall | May 11, 2011

News of a $5,000 depreciation allowance for small businesses buying new vehicles has received a cautious welcome from manufacturers.

The measure, announced as part of the 2011-2012 Federal Budget, will apply to businesses with a turnover of
less than $2 million, with no upper price limit placed on the vehicle.

A spokesman for Minister for Small Business Nick Sherry says the allowance will apply to all motor vehicles, potentially including all passenger cars, utes, vans and trucks. However, specific definitions will be introduced as part of the draft legislation.

Isuzu Australia Marketing Manager Jeff Birdseye says the measure may be “too little, too late”, applying only to the first $5000 of the vehicle cost.

With the allowance taking effect from July 1, 2012, Birdseye says it should not impact on sales in the short term, pointing out that truck purchases are vocational decisions, rather than discretionary.

“If someone is planning a truck purchase today, I don’t think they will wait that long,” he says.

Also taking a watching brief is Peugeot Automobiles Australia, with National Marketing Manager Richard Grant saying the company is “currently looking at the fine print” and will then be assessing the “possible impact” on vehicle sales.

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