The Election Effect: Business, Industry and Truck Loans

There are many concerns and considerations for business owners and operators to consider on a daily, weekly and monthly basis. Most recently, businesses have also needed to absorb and consider the changing scenario around the RBA’s decisions on interest rates and how that may affect truck loans, the policy announcements in the Federal Budget which was delivered last month and the ongoing labour shortages and other effects of the pandemic.

With the imminent Federal Election on the horizon, a significant event for the nation, various considerations emerge for both politicians and voters alike. While political contenders traverse the country to campaign and voters evaluate their platforms to make informed decisions, business owners may find themselves pondering the potential impact of a Federal Election – encompassing both the campaign period and its outcome – on their respective enterprises.

In the midst of this climate, certain business operators might lean towards delaying major decisions, such as truck acquisitions, until the election results are unveiled. However, it's crucial not to overlook the strategic timing of these choices. Positioned on the 21st of May, the Federal Election is followed by an early June meeting of the RBA, where a decision on the cash rate is anticipated – an event that many anticipate to entail a rate increase. As the end of the financial year approaches on the 30th of June, the interplay between the decision on interest rates and the prospective tax benefits stemming from a truck purchase within this fiscal year could exert substantial influence on the decision-making process.

While our aim isn't to undertake an exhaustive exploration or an intricate analysis, we offer a range of fundamental points addressing the plausible effects of an election on business at large, within the trucking industry, and in relation to truck loans. These insights are intended to furnish guidance for individuals contemplating truck purchases within this dynamic context.

Potential Policy Shifts

The outcome of an election can potentially usher in a shift in policy direction, contingent upon whether the incumbent government is re-elected or if a change in leadership occurs. This dichotomy signifies that certain existing policies might persist while others undergo transformation or are replaced by novel initiatives and measures.

The pre-election period is typically characterized by political parties issuing announcements, promises, and commitments. These declarations, framed in broad and general terms, typically necessitate traversal through a legislative process before they materialize. The temporal dimension of spending commitments might span an extended interval, potentially spanning a decade, thereby influencing the immediate impact on industries and businesses.

In this context, the Government unveiled its 2022/23 Federal Budget towards the end of March. The manner in which the election outcome interfaces with the policies outlined in the Budget bears scrutiny. Should the current Government be re-elected, one could anticipate a continuation of these initiatives. Furthermore, it appears that the Government is augmenting these measures with election-specific commitments.

Conversely, in the event of a change in government, certain modifications may transpire. The Opposition Leader affirmed during the Budget period that any cost-of-living measures integrated into the Budget would not be obstructed by the opposition. This pronouncement could imply support for the Low and Middle Income Tax Offset (LMITO). Additionally, it was articulated that if elected, the Opposition would unveil a mid-Budget update later in the year.

The immediate impact of certain policies, such as the temporary reduction in fuel excise – a significant boon for motorists – came into effect promptly. It's pertinent to acknowledge that any policies embedded in legislation may necessitate new legislative measures to be either unwound or altered in response to subsequent changes.

Industry Lobbying

Throughout election campaigns and beyond, industry groups and associations play a pivotal role in advocating for policies that align with the interests of their members. A central facet of this role involves "lobbying" political parties and politicians to adopt measures that stand to benefit their constituents. In line with this, the trucking industry has issued a statement, underscoring the imperative for the forthcoming Federal government to recalibrate the nation's stance on road safety and productivity.

David Smith, Chair of the ATA, launched the association’s election policy charter which puts forward a number of issues including:-

  • Major freight road funding and operation.
  • Rest area program
  • Continuation of the full expensing tax measure to encourage the take-up of newer trucks and safer vehicles
  • Elimination of red tape
  • Improvement in productivity
  • A different approach to vehicle Rego charges and road user fuel charge

Interest Rates and Truck Loans

A major concern may be if the election will have an effect on interest rates and trucks loans. In regard to the truck loan products, there would be no change. The same selection of Lease, Hire Purchase, Chattel Mortgage for truck & trailer finance and Rent to Buy would be available.

The overarching tax benefits, as a collective, are anticipated to remain largely unchanged. However, specific temporary measures, like the ongoing Instant Asset Write-Off (IAWO), may undergo alteration upon the conclusion of their designated timeframes. Presently, the temporary full expensing/IAWO initiative remains accessible to qualifying businesses until the 30th of June 2023.

As previously highlighted, the Australian Trucking Association (ATA) has put forth a call for the permanence of this measure for truck buyers, fostering an environment conducive to businesses upgrading aging fleets to more secure and efficient vehicles.

The pivotal nexus between elections and interest rates materializes through the interplay between fiscal policy and monetary policy. Fiscal policy, overseen by the incumbent government, pertains to budget-related measures and policies. Conversely, the Reserve Bank of Australia (RBA) wields authority over monetary policy, encompassing the establishment of the official cash rate, which reverberates through lending interest rates.

This linkage pivots on economic conditions that drive the RBA's decisions to heighten or lower interest rates, centered around unemployment and inflation. Government policies, specifically those geared towards job creation, hold the potential to influence unemployment rates, a metric that has demonstrated a steady decline in recent months, attaining historically low levels. Moreover, government policies can exert an influence on business investment confidence, a factor that could subsequently impinge upon changes in interest rates.

Furthermore, market reactions to particular government policies can also exert an impact on interest rates established by individual lenders.


This is a very simple overview of some issues around elections and finance. Individual businesses will draw the own conclusions as to whether they should proceed with truck purchase decisions at this time or hold off until after the election. The individual positions of different parties in relation to some topics and policies will have varying impacts on different industries. This may influence buying decisions.

But regardless of the election outcome, cheaper truck interest rate loans are available and tax benefits can be realised in this financial year for purchases made prior to 30 June.

Contact Jade Truck Loans on 1300 000 003 for truck finance.