News

“Perfect storm” boosts machinery sales

By Jamie Salter

Recent rain and the Federal Government's instant tax asset write-off has created a "perfect storm" that has seen local machinery sales skyrocket as confidence about the upcoming season grows.

Shepparton's Bertoli Farm Machinery sales manager Paul Watt said sales had been extremely busy throughout June.

“The machinery we've sold has been very broad — from mowing equipment, RTVs, tractors (general and orchard), and generators,” Mr Watt said.

“I think there's been a creation of a perfect storm, with low interest rates, instant asset write-off, and positive cattle prices.

“If you put all those factors together, despite COVID-19, it's been a good opportunity.”

In June, the Federal Government extended the $150,000 instant asset write-off scheme until the end of the year.

The extension comes after the threshold for instant asset write-off increased from $30,000 to $150,000 in March, and applies to businesses with an annual turnover of less than $500 million.

Mr Watt said demand had put pressure on supply but manufacturers were doing what they could to fill orders.

“There has been issues in terms of supply; if you asked ag dealers around January or February, they would have said stock levels were too high, but now they would say it's too low.”

Kialla's Goulburn Valley Ag dealer principal Christian Barnett said he had seen a rise in inquiries for machinery as increased rainfall boosted farmer confidence.

“It’s been good for local dealerships, there’s been pressure over the last couple of years as farmers have struggled,” Mr Barnett said.

“A lot of dealers will find it difficult to supply machinery, so customers are getting in early.”

Moglonemby's Ross McBurney runs a sheep and cropping farm and recently purchased a new hay baler from Goulburn Valley Ag to use for silage, hay and contracting.

“With the instant asset tax write-off, it's a good time to buy and we've come out of two dry years in a row — the recent rain has created a lot of confidence in farming,” Mr McBurney said.

“This season brings its own challenges as well — it's a bit too wet.

“All the crops we sowed early are looking fantastic, but from May onward the crops are struggling because they're not mature enough to handle the rain.”

More than 2000 tractors were sold in June according to Tractor and Machinery Association of Australia figures — the highest number of sales since 1981.

Victorian sales are up 46 per cent for the month and 30 per cent ahead of last year, largely due to the threshold of instant asset write-off rising from $30,000 to $150,000.

The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets, provided each costs less than $150,000.