Tax breaks for ute buyers and RV businesses

The federal government’s big-spending budget has delivered good news for business owners with the extension of the instant asset write-off scheme that has been instrumental among other things in stimulating strong growth in vehicle sales, particularly utes rated to tow big caravans.

Now known as the ‘temporary full expensing’ measure, the write-off was introduced early in 2020 as the COVID-19 pandemic took hold in Australia (and was revised later in the year) to allow businesses with a turnover of up to $5 billion to write off the full value of an eligible asset such as a work vehicle.

The extension will apply to eligible assets, whether new or second-hand, that are acquired between October 6, 2020, and June 30, 2023 – a year longer than before.

The government will also reduce the tax rate for small and medium businesses, from 30 per cent to 25 per cent from July 1, 2021, and has kept the so-called ‘low and middle income tax offset’ for individuals in place for another year.

"Whilst the government’s budget was light on in specific tourism or manufacturing related funding, we are pleased to see announcements regarding insurance support in northern Australia, an extension to the Building Better Region Fund and employment support for tourism operators for which we have strongly lobbied on over the past 12 months," the Caravan Industry Association of Australia said in a statement. 

Road funding

The government is also continuing to invest heavily in Australian roads across all states and territories.

The Australian Automobile Association (AAA) welcomed the latest measures, which bring road infrastructure spending to $7.77 billion this current financial year – up from the $7.38b commitment made last October – and add a further $8.2b in the year ahead.  

“Now that this standard of delivery has been set, motorists will expect the government to deliver in full on its road funding commitments in the year ahead,” said AAA managing director Michael Bradley.

There was no specific funding for electric vehicles in the budget, despite the headline pre-budget announcement of $1.2bn being invested into “low emissions technology innovation and commercialisation”.