Small business to receive assistance and increase in asset write-off threshold under carbon tax, but industry claims it’s not enough
By Jayne Munday and Brad Gardner | July 11, 2011
Small businesses will receive government assistance and an increase in the asset write-off threshold when the carbon tax begins, but industry claims the measures are not enough.
Prime Minister Julia Gillard has promised an increase in the write-off threshold from $5,000 to $6,500 from July 1 next year for businesses with an annual turnover of less than $2 million.
In unveiling the carbon tax package yesterday, Gillard pledged $240 million from July 1, 2014 to help small businesses save energy and get advice to help grow their business sustainability.
The carbon price will begin at $23 per tonne, increasing to $24.15 on July 1, 2013 and $25.40 the following year. The scheme will shift to a market-based emissions trading model in 2015.
The Chamber of Commerce and Industry Queensland has accused the government of giving insufficient support to small to medium businesses under the tax.
“While some large players in trade-exposed industries may be able to access some form of compensation, there is little to no assistance for small-medium businesses – the backbone of our economy,” CCIQ President David Goodwin says.
He says the tax will hit small businesses hardest due to higher electricity prices, which are tipped to rise by around $3.30 per week under the scheme.
While the government admits there may be some indirect costs on business, it says these charges will be “modest”.
The government has announced compensation for the steel manufacturing and the coal sectors as well as new programs to bankroll investment in clean and renewable energy.
Gillard says a $10 billion Clean Energy Finance Corporation will be established to help business get clean energy proposals and technologies off the ground.
The Australian Renewable Energy Agency will be responsible for investing $3.2 billion in government grants for research and development into renewable energy technologies.
Another $200 million in grants will be handed out to businesses investing in low emission technology, energy efficiency and renewable energy.
Treasurer Wayne Swan says a three-year fixed price period will give businesses time to adapt to the new system before market forces dictate the cost of carbon from July 1, 2015.
“We know a carbon price is the most cost-efficient way to cut carbon pollution. Putting a price on pollution will encourage companies to innovate and invest in new technologies to use energy more efficiently,” Swan says.
Meanwhile, the government will appoint former Reserve Bank Government and former Treasury Secretary Bernie Fraser to chair the new Climate Change Authority.
The nine-member group will be responsible for advising the government on carbon pricing, including making recommendations on future emissions caps.
The authority’s first review, to be completed by February 2014, will advise government on what the caps should be set at for the first five years of the emissions trading scheme.
Under the scheme, carbon permits will be issued up to a cap set by the government. Businesses will then be able to trade permits.
Gillard says the Climate Change Authority will also look at other climate change initiatives and track the progress of Australia’s pollution reduction targets.
The government has committed to reducing emissions by 5 percent based on 2000 levels by 2020.
Related story:
Trucking to pay extra 7cpl under carbon tax