Machinery dealers racing to deliver ordered farm machines before temporary full expensing ends on June 30 are concerned angry farmers may lodge complaints with consumer authorities if they miss the deadline.
Some dealers under intense pressure to deliver in time have machines ordered from manufacturers last year which are yet to arrive and others are waiting on machines landed at Brisbane and Melbourne ports to clear customs and quarantine before they can be trucked to Western Australia.
While dealers have combine harvesters in stock this year and there is some availability on self-propelled sprayers and tillage and hay equipment, big horsepower tractors have been difficult to get hold of and delivery times have stretched to two years in some instances.
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As the clock runs down for getting machines out of ports, into WA dealership workshops, inspected, serviced, local accessories fitted before delivery to customers who want to claim full depreciation value this financial year to offset increased farm income from a second-in-a-row record harvest, some dealers are becoming increasingly concerned at the likely customer reaction if they miss the Temporary Full Expensing deadline.
There is already concern among dealers that those who, based on manufacturers' production estimates and seemingly recovering shipping schedules last year, promised customers delivery before June 30 this year, may be reported to the Australian Consumer and Competition Commission (ACCC) if they fail to deliver on time.
Apart from having to search orders records and company emails to defend delivery delays beyond June 30 to the ACCC if complaints are lodged, whether or not a penalty is imposed after an ACCC investigation may well come down to what a salesperson trying to close a $1 million deal actually promised a customer more than 12 months ago.
"There is going to be a lot of pain for some people," predicted one machinery salesman Farm Weekly spoke to last week.
The National Farmers' Federation had raised the issues of supply chain and manufacturing delays being compounded by shipping and port delays with Federal Agriculture Minister Murray Watt before the Federal budget was brought down last week, hoping for a further extension or at least a graduated phase-out of temporary full expensing.
However Federal Treasurer Jim Chalmers killed the program, which had operated for two years with the deadline extended once already, by not extending it beyond June 30 in the budget.
The Australian Taxation Office (ATO) has previously told Farm Weekly it has no discretionary powers to allow full expensing on machines held up for whatever reason and unable to be delivered onfarm by June 30.
Last week's budget temporarily lifted the price ceiling to $20,000 for a return of instant asset write-off for businesses, including farms, with accumulated annual turnover of less than $10m.
But this will not help farmers who have ordered more expensive machines that miss the June 30 temporary full expensing deadline for delivery.
When machines are delivered after June 30 they can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30pc each income year after that, according to the ATO.
Farm Machinery & Industry Association of WA executive officer John Henchy said members were disappointed the budget had killed off temporary full expensing without some discretion or gradual wind down to allow machines ordered in good faith last year but delayed by factors beyond local dealers' control to be depreciated fully this year.
"We realise this is an Australian budget but given that we are a significant importing country it would have been good if consideration had been given to the impact of the global production challenges, with equipment, on the temporary full expensing program and an extension applied," Mr Henchy said.
"With production component issues, reduced shipping and Australian port bottle necks it would have been good to see an extension considered for those customers who, in good faith, ordered new equipment on the assumption it would be here on time to take advantage of the program."
Among other budget announcements, an additional 20 per cent tax deduction for small to medium businesses that can demonstrate the spending enables more efficient energy use through greater electrification, may benefit some agriculture machinery dealerships with additional sales, Mr Henchy pointed out.
"Some of our members have access to small electric powered tractors and electric commercial mowing equipment so the small business energy incentive may have an impact," he said.
"Given the continual need for more employees, additional funding allocated for Australian apprenticeships is also a positive move."
Mr Henchy said there appeared little in the WA Budget that directly affected agriculture machinery dealers.
"There is a plan to increase port capacity which is good news if it helps prevent ships bypassing Fremantle which has a big impact on us when large machinery has to be brought back to WA on a truck," he said.
"The money being spent on upgrading the agricultural colleges and new and expanded initiatives that support students in the regions to access training is also good news."
