No extension for investment allowance

The Federal Government will not extend the 30 percent investment allowance despite pleas from manufacturers

By Michael House

The Federal Government will not extend the timeframe for its 30 percent investment allowance despite pleas from manufacturers.

Sections of the trucking industry called for the deadline to be revised, saying trucking operators needed more time to gain finance to purchase new equipment.

But a spokesman for Treasurer Wayne Swan says the Government will not budge on the June 30 phase-out date.

"The government has made it absolutely clear what the timeframe for this measure is," the spokesman says.

He says the incentive is helping stimulate the economy, and "many businesses are taking advantage of it and that’s a good thing".

"This incentive is in place to stimulate investment by business in capital expenditure at a time when we’re facing a severe global recession," the spokesman says.

However, manufacturers and financial experts have warned the industry’s inability to obtain finance may hinder the effectiveness of the scheme.

"We have applauded the Government’s investment allowance stimulus, but are mindful that it can only advantage companies that can access funding to purchase new equipment," Paccar Financial Managing Director Roland Hollingsworth says.

MaxiTrans Managing Director Michael Brockhoff has been one of the loudest voices behind the call to extend the incentive.

"Many trucking companies are having trouble getting credit to turn their interest into sales," he says.

"As a result of the credit shortage, it [the incentive] just hasn’t had enough chance to kick in."

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