car dealership at the centre of UteGate, but not in the way that's been alleged.
As the Treasurer insisted to Parliament yesterday that his lobbying efforts on behalf of the ute dealer were not out of the ordinary and had come to naught, the Bureau of Statistics reported that ute sales exploded during the month of May, with the number of orders for new utes, buses and trucks up an extraordinary 11.3 per cent - the biggest monthly jump in almost a decade.
In his May 12 budget Mr Swan bumped up the tax deduction for small businesses buying updated equipment from 30 per cent to 50 per cent and gave them until just December this year to finish their shopping.
The tight deadline and the generous deduction appears to have made the measure as effective in supporting car dealers as bonus payments and First Home Owners Boost were in supporting retailers and home builders...
NSW recorded the biggest boot in ute, bus and truck sales in the nation, with orders up 28 per cent in the month, accompanied by a 17 per cent boost in orders of four-wheel drives and a 13 per cent boost in sales of passenger cars.
"There's been a rush of mum-and-dad businesses to buy new cars before the December 31 deadline," says TD Securities economist Annette Beacher.
"Yet again government fiscal policy is behind another upbeat monthly result, and we expect more good car sales in June and July."
Vehicle sales of all types were up 5.4 per cent nationwide in May - the biggest monthly jump in almost half a decade, although still down more than 12 per cent over the year.
"The problem isn't affordability but consumer conservatism," said CommSec economist Savanth Sebastian. "Car prices have been generally flat while wages have been climbing."
"Our estimates suggest that car affordability is at its best levels since the mid-1970s. It now takes a worker on the average wage just 31 weeks of earnings to buy a Ford Falcon sedan. Just 5 years ago it would have taken an extra 6 weeks."
In separately-released news petrol prices have climbed to their highest in eight months. The Australian Institute of Petroleum says the average Sydney price climbed a further 1.8 cents last week to 124.7 cents per litre.
"The really bad news is that the Singapore oil price jumped by almost 37 per cent last month and this is yet to be reflected fully in pump prices," said Mr Sebastian. "CommSec expects pump prices to jump by a further 5 cents a litre in the next fortnight."
Published in today's Age