Tractor Sales Down 60%: TAMA Calls On Government To Help Save Its Sector
The Tractor and Farm Machinery Association (TAMA) is calling on the Government to take urgent measures to help its sector in the face of plummeting sales.
TAMA President John Tulloch has written to the Minister of Agriculture Damien O’Connor requesting action to encourage farmers and contractors to invest in farm productivity this year.
Specifically, TAMA wants the Government to review its low value asset write-off limit to bring it up to at least same level as Australia. The New Zealand Government has temporarily increased the threshold to $5,000 because of COVID-19 however the new Australian limit is $150,000.
“$5,000 is far too low to assist the primary sector, where a new tractor can cost upwards of $100,000,” Mr Tulloch said.
The Minister recently stated that the Government was looking to the primary industry to help the economy recover from the pandemic fallout.
“However, our sector, despite literally keeping the primary industry moving, is facing job losses and business losses. We could see a repeat of the GFC crash that took us years to recover from.”
COVID-19 is negatively affecting contractors’ and farmers’ income, many of whom are also dealing with drought impacts. This is turn is affecting their ability to invest in farm machinery and equipment. April tractor sales were down more than 60% from April 2019 and without intervention this could be the sector’s “new normal”.
“We will see flow-on effects such as the loss of competition within our sector plus barriers to farmers maintaining and obtaining tractors and machinery.”
The New Zealand tractor and farm machinery sector is worth about $1.3 billion annually and provides 2500 jobs. In 2018 and 2019 sales were finally back to the 2005 and 2006 annual tractor sales of more than 4000. The GFC crisis saw sales plummet by 45%. It took the sector eight years to recover.
“If our sector declines by 45% again it means the potential for the loss of 1200 jobs, within the primary industry that already needs 50,000 more workers. We are already facing a severe financial pinch through the postponement of the June face-to-face Fieldays where we receive a bulk of our orders.
“We need urgent action from the Government now to enable our primary industry to keep investing in its future. Otherwise the country will feel more pain later.”