Tractor sales soften as generous asset write-off scheme ends

The month of June 2023 saw tractor sales dip by around 60 units YOY to 2500 for the month, bringing the year-to-date (YTD) figure to be 16 per cent behind the same period last year, the Tractor and Machinery Association of Australia (TMA) reported.

The Temporary Full Expensing measure introduced by the Federal Government during the COVID-19 pandemic also officially ended in June 2023, and has been replaced by the small business instant asset write-off scheme as of July 1, 2023.

“This program has assisted the industry to not only continue to operate during this difficult period but prosper,” said TMA executive director, Gary Northover.

“The TMA has been concerned that the termination of this program would cause problems for the industry and lobbied the Government for relief for customers that ordered equipment but could not receive their orders by June 30 due to prevalent supply chain issues. However, we were unsuccessful.

“It remains to be seen now what the full impact of the end of this program has for the industry particularly given the ever-increasing predictions of an El Niño weather pattern likely to dominate Australia for the next nine to 12 months.”

Around the country, sales were mostly down with Victoria off five per cent on the same month last year to sit 24 per cent behind YTD. Queensland was up 1.9 per cent YOY and is 11 per cent behind YTD.

New South Wales was in line YOY but 17 per cent off YTD.  Sales in Western Australia dropped 17 per cent to be 13 per cent behind YTD, while South Australia recorded a nine per cent increase to be six per cent behind YTD.

Tasmania was off four per cent for the month and 24 per cent off YTD while sales in the NT were 36 per cent down to sit 10 per cent behind YTD.

In terms of machine categories, the small under 40hp category was down by eight per cent for the month and is now 16 per cent behind YTD. TMA deems this category most likely to be affected by interest rates.

The 40 to 100hp range had a small increase, up two per cent but remains 17 per cent behind YTD. The 100 to 200hp category was down by three per cent to be 20 per cent behind YTD while the 200hp and over range slipped slightly, down two per cent to be five per cent behind last year.

Sales of combine harvesters continue to buck the trend with over 200 units delivered in the month of June.

“This puts us well ahead of the same time last year, up 78 per cent in fact and expectations are for an outstanding year ahead,” Northover said.

Baler sales dipped by 11 per cent in June but remain 10 per cent ahead on a year-to-date basis.

Finally, out-front mowers had another strong month, with its sales up 24 per cent on the same time last year.