Forklift News - Will incentive boost forklift sales?

The federal government’s 10% temporary investment allowance is aimed at encouraging capital investment by Australian businesses.

The federal government’s announcement last month of a 10% temporary investment allowance – in the form of an additional tax deduction – to encourage capital investment by Australian businesses has not yet had an impact on forklift sales.

It may still be a case of ‘early days’ to judge the effectiveness of this measure, the intention of which is to provide an important short-term stimulus to the Australian economy in the face of the global financial crisis.

Forklift dealers are hopeful it will have a positive effect over time, while some believe there’s not enough awareness of the allowance.

"We have not yet had any positive response to this measure as it is very early days and we don’t believe most companies have digested the benefits to them," says Damien Garvey, national sales manager of NTP Forklifts Australia.

He tells Forkliftaction.com News that the company is looking at the best ways to market the incentive to customers, "as it really only benefits the retail sector which, of course, leaves out the many large accounts which mainly rent their equipment".

Calmat director Wayne Franklin reckons it’s the best-kept secret in Australia. "From conversations I have had, I don’t think too many people are aware of it!"

Linde’s general manager - sales & marketing, Rod Chapman, tells Forkliftaction.com News that due to Christmas and New Year and January historically being a slow period, no increases in sales of equipment have been seen as yet.

"I remember when it was last available, customers seemed to wait until the last minute and there was a mad rush in June to take advantage of the saving. Hopefully, we will not see that repeated."

Stefan Marschner of the EMC Group believes the measure has not succeeded, but says it is too early to tell. "Perhaps by February, we will have a better understanding."

The allowance will be in the form of an additional tax deduction equal to 10% of the cost of an eligible asset. The allowance will be applicable to most new tangible depreciating assets - which includes most items of plant and equipment - over AUD10, 000 which are acquired or ordered by the end of the current financial year.

This means a business can receive an additional 10% tax deduction - available immediately - for investments brought forward and in place by 30 June 2010. In practical terms, this is an added incentive for businesses to proceed with their investment plans in this difficult environment.

The measure is estimated to cost AUD1.6 billion over the forward estimates period.

The investment allowance will be available for businesses which start to hold or start to construct the asset after 13 December 2008 and before the end of June 2009. Assets must be ready for use by the end of June 2010.

Forklift dealers are hopeful the investment allowance will have a positive effect on sales over time.

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