On July 10th, the Government announced its new carbon tax package, which has implications for many businesses. The idea of the plan is to cut 159 million tonnes of the country’s carbon emissions by 2020, and relies on the carbon pricing mechanism, which will be implemented in two stages.
The first, from 2012 to 2015, prices will be fixed on carbon emissions, and start at $23 per tonne. This price will rise by 2.5% each year in real terms (over and above the rate of inflation).
After this time, an emissions trading scheme will be employed. Though there will be a price floor and a price ceiling from 2015 through to 2018, essentially the price will be set by free market forces. The price ceiling will be set at $20 above the expected international price, and rise by 5% in real terms each year.
Any business that has direct greenhouse gas emissions of 25,000 or more (excluding transport fuels and some synthetic greenhouse gases), will pay under the scheme, and will need to hold a permit for every tonne they emit. These permits will become tradable once the scheme comes into operation.
The scheme will not apply to light vehicle transport businesses, nor will it apply to off road fuel used by the agriculture, fishing and forestry industries. Most importantly for many of Australia’s entrepreneurs, small businesses will not have to monitor their electricity or carbon emissions use as they will have no direct obligations under the scheme.
However, the Government does want small business to play its part in reducing Australia’s emissions, and to this end have announced a number of other initiatives to help them do so. One of these is the setting up of $40 million Energy Efficiency Information grants program to provide small businesses with practical measures to reduce energy costs. On top of this it will be providing an additional $5 million in funding over four years to improve the delivery of clean technology advice and other non-grant support programs to small and medium businesses.
At Finlease, one of our business finance experts would love to talk to you about the ways in which we can help you save money and we can work with you to find the renting, leasing and other finance options that work for you and your business.
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