As the new Federal Treasurer is anticipated to unveil a revised Federal Budget in October, various states are presently releasing their annual budgets. For truck owners and operators, these state budgets often offer substantial insights into potential work prospects on the horizon. These opportunities may prompt the need for vehicle upgrades and the acquisition of new truck finance.
Most recently, several state budgets especially NSW, have been big spend-ups in the area of infrastructure. During the ‘pandemic years’, states used infrastructure spending as a key lever to stimulate the economy. Great news for those operating in the construction sector.
But the stimulus support provided to both individuals and businesses from state coffers over the past few years have left the jurisdictions with significant debt levels. This comes at a time when interest rates are rising. Yes, governments too have to pay interest on their borrowings and facing higher rates, that means a hit to their budgets.
So what could be in it for your business? The recently released NSW and Queensland state budgets may indicate business opportunities for truck operators and the need for truck finance on new vehicles. We provide a brief overview of what may be on offer, being mindful that budgets need to be passed by the respective parliaments before being implemented.
NSW Budget 2022/23
NSW Treasurer Matt Kean recently brought down the state’s budget for fiscal year 22/23 with some analysts seeing it as a pre-election sweetener budget. The NSW State Election is due in March 2023. Many of the initiatives and spending announced by Treasurer Matt Kean address social and community issues. Minister Kean frames the budget in the intro comments as investing in the people.
Increased spending on childcare, increased funding for programs focussed on women, including workforce participation; rural and remote health services; Some of these may not be actually work opps for businesses, but may represent cost savings at a personal level. For owner operators where the income from the business is closely aligned with personal wages/income, these could be represent a gain. Toll relief is included which will come as relief for many operators.
While a number of large infrastructure projects have been postponed, significant funding has been allocated to smaller building projects which may represent upcoming work for some operators in the construction sector. This includes on schools, upgrading police stations, renewable energy projects and other such projects.
Major infrastructure spending is also included in the budget including for the Sydney Metro West, the Metro Line to the new Western Sydney Airport and the extension of the Metro Northwest through to the south west.
Other projects can be reviewed at the budget website.
Support for farming sector could represent a reason to upgrade trucks for those in the ag sector. This comes in the form of access to funds of up to $135,000 for those that opt for sustainable practices. This is via a green accreditation scheme and is seen as an opportunity for producers to realise premium pricing the overseas market.
The NSW State Budget has many inclusions and may be worth considering in relation to the opportunities for your business.
Queensland State Budget
Qld Treasurer Cameron Dick released the state budget in the past week with opening comments covering building capacity across the health system; creation of additional energy storage and renewables; supporting business in both traditional and emerging sectors; and recognising the pressures of cost of living currently being experienced.
Budget highlights for business include:-
- Manufacturing sector support with continuation of Made in Queensland.
- Funding for Waste Package for both councils and for industry to make investments in infrastructure and for programs to reduce waste and meet the targets for resource recovery.
- Fast-tracking new economy minerals production and processing through the Resources Industry Development Plan.
Plus much more detail which can be worthwhile considering in view of opportunities for new work and possibly new vehicles for your business. Or for what relief in regards to business costs and expenses are available. One such reduction is the announcement in regard to payroll tax.
A payroll tax deduction, from 1 January 2023, will be available with the threshold raised from the current $6.5m to $10.4m. This represents a significant savings for many smaller to medium sized businesses.
Truck Finance Implications
State budgets do not impact the finance market as such. They do not directly have a bearing on interest rates as those decisions are made by the RBA. The selection of truck loan products is also not impacted with our portfolio remaining unchanged.
The tax benefits that can be realised through such measures as IAWO with Chattel Mortgage For Truck and & Trailer financing are not impacted by state budget. But businesses may realise savings on business expenses through reductions in some state-based taxes and charges such as payroll tax and tolls.
If the new infrastructure and manufacturing industry supports represent growth opportunities for your business, it could be time to invest in new vehicles. Although interest rates are rising due to RBA decisions, we are still achieving better rates across our loan divisions.
On the other hand, if possibly you geared up with new machinery in preparation for tendering for major projects which have now been postponed, there could be a need for support finance. If the delay of major infrastructure poses issues for your business, speak with us for truck refinancing and other finance support.
Contact Jade Truck Loans on 1300 000 003 to discuss affordable truck finance.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.