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business | Feature


carbon tax

With the carbon tax coming into effect on 1 July this year, it’s time to seriously look at and prepare for the impact it will have on you and your business. Danielle King reveals what you can do.


he carbon tax will be charged at $23 per tonne of greenhouse gas (GHG) and will apply to any entity producing more than 25,000 kilotonnes of GHG (or equivalent) per annum. This carbon price will apply to approximately 500 of the biggest polluters in Australia. While it seems impossible to obtain a full list of such entities, the costs that are expected to increase are energy (from non-renewable sources), transport, construction materials, manufacturing inputs and air travel. The Treasury Modelling Overview document states an expected increase of 10 per cent for electricity and around 9 per cent for gas during the first year alone. Airfares will also increase, although price rises may not be applied evenly across the ticket range. Exemptions to the carbon tax currently include agriculture, fisheries and forestry, so there should be no direct price increase in these areas. Most road transport vehicles (4.5 tonnes or less) are exempt for the first two years but they will be impacted from 1 July 2014.

The impact

Although the Government expects the impact to be minimal, small businesses will certainly notice the cost increases. Administratively there will be no forms to fill in or carbon accounting required. It will be business as usual; however, businesses will be exposed to slightly higher costs, as outlined above. The Federal Government is offering several assistance packages to soften the blow. The two that are of particular relevance to small businesses are the asset tax write-off and energy efficiency information as follows: • For investment in more energyefficient equipment, during 2012-2013, small businesses (with an aggregated

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turnover of under $2m per year) will be able to instantly write off any eligible equipment or asset up to $6,500. This has increased from $5,000 during the 2011/12 tax year. • Funding is also being provided via grants to eligible groups to provide energy efficiency information programs specifically for small businesses. Keep an eye out in your local area for information sessions.

Small businesses will certainly notice the cost increases Note that the Australian Competition and Consumer Commission (ACCC) has a legal budget to investigate complaints where consumers feel an organisation is charging too much carbon tax. Ensure you report any organisation you think is applying unfair carbon tax price increases.

What can you do?

There is always something you can do to mitigate the risk of higher costs - here are some suggestions. • Review your business and identify areas where you are likely to be impacted (for example, electricity costs and transport). • Look at ways to reduce your exposure (by reducing what you use, minimising use of impacted goods or changing the way you do things). • Read your energy bills, understand what you use and apply energy

efficiency strategies to reduce energy usage. • Increase your recycling - this will reduce waste to landfill and any resulting costs. • Take advantage of the $6,500 tax write-off and replace energy-hungry appliances and machines with highly energy-efficient models (an old refrigerator, for example, can cost up to $1,200 per year to run, while energyefficient models cost around $80 a year). • Minimise transport costs by buying local and using options such as meetings over the internet and conference calls, rather than travelling. • In the building industry, minimise use of products that have a high carbon footprint (aluminium, steel and cement, for example) and use other options instead, such as wood. If you’d like some help, get a qualified energy auditor to review your business and give you a prioritised list of actions against quantified savings. You can then work through it at your own pace. You can get more carbon tax information from If you’re seeking advice for your small business, visit We also recommend downloading the excellent (and free) book, Sustainable Growth, by Jon Dee and Sensis, from www.about. The bottom line is yes, carbon tax will have an impact on your business. To what extent really depends on what you do and how you do it.

Danielle King, founder and director of Green Moves Australia (, is a qualified and accredited sustainability consultant and teaches sustainability subjects at Swinburne. Danielle is also an active member of the BDAV (Building Design Association of Victoria), sitting on both the Sustainability Committee and the Sustainability Advisory Board.


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