By Ryan Johnson
New data from Commonwealth Bank of Australia (CBA) has showed investment by Australian businesses in machinery and equipment upgrades has significantly grown, with the bank funding record volumes in new asset financing.
CBA’s lending across a variety of assets grew significantly over the 2022-23 financial year, with transport among the top performers.
CBA general manager of asset finance Chris Moldrich (pictured above) said businesses were benefiting from orders placed in advance and were bringing forward purchases to take advantage of government incentives.
“The increased supply of vehicles to Australia has enabled businesses to take the opportunity to upgrade assets that they held on to for longer than expected during Covid,” Moldrich said in a CBA press release.
“It’s also clear businesses were motivated to upgrade their eligible vehicles and equipment to take advantage of the Federal Government’s Instant Asset Write-Off Scheme before June 30.”
Commonwealth Bank has seen strong growth in Electric Vehicles (EVs) financing, up 235% the last 12 months.
The jump is supported by CommBank’s recently launched Green Vehicle and Equipment Finance which offers discounts of up to 1% off the standard rate for new and used electric or hydrogen powered cars, trucks, vans or buses, and discounts of up to 0.5% on other qualifying assets including electric and hydrogen powered machinery, solar, wind and hydro-powered equipment and charging and storage equipment valued up to $250,000.
According to the VFACTS National Report, the EV trend is booming, with combined sales of electric cars, SUVs, and light commercial vehicles tripling year-on-year to make up 7.4% of all vehicles sold in the country.
That figure was less than 2% last financial year.
“Electric vehicles were the fastest growing vehicle type last financial year and Australian businesses are set to play an outsized role in EV adoption across the country,” Moldrich said.
“While more public sector investment in charging infrastructure is needed, particularly in regional locations, EV usage is growing strongly as the market matures and becomes more affordable. That’s helped by government concessions and an expanding choice of vehicles beyond luxury models.”
While CBA’s EV numbers are going from strength to strength, it is not the only asset class posting a significant rise.
According to CBA’s financial year results, computer equipment (up 43%), cars (up 30%), heavy trucks (up 27%), trailers (up 26%), forklifts (up 17%) and total utility vans (up 15%) have all recorded significant growth.
Moldrich said business were also turning more attention to protecting their businesses from cyber threats with a 43% increase in businesses investing in replacing and upgrading computer equipment.
“In today’s current environment where cyber security is a top concern for businesses across the country, high levels of investment into technology reflect how businesses are choosing to respond to this growing threat.”