Australian truck company Isuzu Australia says it welcomes clarity on the Euro VI transition timing while seeking a clear way forward on instant tax write-offs for its customers
Isuzu Australia has called for bodies to clear confusion around instant tax write-offs on heavy vehicles for customers.
Record demand for heavy vehicles coupled with delays in supply are raising serious concerns within the industry as too how these assets will be treated from the tax perspective after June 30, 2023.
As it stands now, trucks bought and delivered on or before June 30, 2023, qualify for an instant tax write-off.
What’s not clear is whether the Federal government is willing to extend the second deadline to ensure that trucks bought and paid for now, but not able to be delivered by June 30, 2023, remain eligible for the tax break.
Isuzu Australia Limited (IAL) chief operating office Andrew Harbison says the lack of certainty around how the rules will be applied is making life difficult within the industry.
Harbison noted that the recent Federal Budget was the perfect opportunity for the new Albanese government to announce an extension to the program, but nothing had been said.
He says Isuzu welcomes the government’s announcement on the Euro VI Stage C requirements to be applied for newly approved heavy vehicle models supplied from November 2024 and existing heavy vehicle models still being supplied to the Australian market on or after November 2025 as offering certainty to the industry.
“The new Australian heavy vehicles emission standard provides certainty both for heavy vehicle Original Equipment Manufacturers (OEMs) in their future product development and release programs for the local market,” Harbison says.
However he noted the pressures continued and heightened demand for vehicles was having right now and the flow on effect for customers.
He says if completed trucks, including trucks with custom body builds, were not delivered by June 30, 2023, those customers would miss out on the instant write-off tax break.
“It’s an unforgiving position for all parties, given current global supply-chain challenges, which have coincided with unprecedented demand for trucks globally and domestically.
“In Australia, these supply chain challenges have meant that the volume growth for heavy commercial vehicles has not been evenly spread across the market.
“At the close of 2021, the total truck market volume was up 8 per cent on the prior year, yet for Isuzu, market volume at year end was up a massive 24 per cent and the leading heavy-duty OEM experienced 34 per cent growth volume growth.
Harbison says in 2022 while the total market volume was up on 5 per cent, Isuzu was juggling an extra 31 per cent in volume throughput.
The increased demand and supply chain challenges in the industry have meant the average waiting time for a new car in Australia in October was 152 days, compared to just 30 days in January 2019. Car buyers in the Northern Territory are waiting up to 297 days.
“In the truck market, depending on the model, body build and location, the time between order and delivery can extend out to 12 months,” Harbison says.
“OEMs are under immense pressure to deliver finished trucks to Australian businesses.
“It’s also important to note that the current cut-off represents a serious issue to businesses far beyond truck OEMs. There are a multitude of affiliated businesses, from body builders to component suppliers that are also heavily affected by the current deadline.”
Another factor Harbison says is adding to the challenges for the industry is a lack of the highly skilled staff required for the engineering and fabrication elements of building new trucks.