One of the top legislative, political and regulatory changes that will affect your business in 2012 and beyond

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Carbon tax

A study released by the Climate Institute showed that just 28% of Aussie voters supported a carbon tax…until it was explained to them properly. Then the figure doubled.

The carbon tax is one of the major legislative, political and regulatory changes introduced in Australia from 1 July 2012 that will no doubt impact your business.

Do you properly understand the carbon tax? Are you for or against it?

In this study, 47% shifted their preference to favour the carbon tax because it was explained that the tax revenue raised would be spent on household assistance, business support and renewable energy. So has your business benefited yet from the government’s carbon tax revenue distribution?

Australia produces about 500 million tons of carbon pollution each year.  And, according to the Department of Climate Change and Energy Efficiency, that figure is rising. Even though Australia counts for less than 2% of global carbon dioxide emissions, Australia emits nearly twice that of most OECD nations. In other words, we are one of the world’s top polluters due to our high usage of coal in electricity generation, the energy-intensive aluminium smelting sector and the high dependence on motor vehicles and trucks for transport, according to the Australian Bureau of Statistics.

How is the carbon tax set to impact your business? Will it impact directly or indirectly?

  • Airfare to increase: Qantas, for example, has to pay a 15% penalty to the European Union on flights into and out of Europe because Australia did not have a carbon tax until now. Who will wear these costs? The consumer, via increased airfares.
  • Electricity costs to skyrocket: Electricity prices have risen by 21% since 1 July 2012. Check your bills. Energy is costing more, and costs can vary depending on which state of Australia you are located in.
  • Gas, transport, packaged goods and manufactured goods costs set to increase: All these industries affect costs for businesses.

What has the government put in place to support your business?

  • They’ve increased the personal income tax-free threshold to $18,200.
  • Businesses turning over gross sales of less than $2 million can write off 100% of depreciating assets costing less than $6,500.
  • Businesses turning over gross sales of less than $2 million can write off $5,000 of a car costing $6,500 or more.
  • Businesses turning over gross sales of less than $2 million can utilise an accelerated depreciation rate of a flat 15% on depreciable assets in the first year, then 30% each year after.

Take advantage of opportunities for your business.

  • Review your costs, and determine what is impacting your business. Evaluate how you can reduce costs, or explore the possibility of absorbing increasing costs or passing them on to clients.
  • Assess whether or not you can adopt energy-saving activities for your business. For example: Should you change the style of your product packaging to reduce direct costs initially and transport costs in the longer term?
  • Evaluate the lifetime cost of your business plant and equipment if you switch to gas versus electricity.
  • Reduce power consumption by turning off lights, computers, printers and fax machines at the power point when you are not using them, and consider updating that old fridge in the staff room.
  • Be more mindful of star ratings for office appliances, and actively invest in energy efficient business assets. Consider updating the air conditioning units if they are older than 10 years.
  • Research a conversion to solar power.
  • Reduce printing costs by adopting e-marketing.

The government website www.cleanenergyfuture.gov.au offers help for businesses. Check it out, and see if there is something for yours. Focusing on energy efficiency and reducing your business input costs is always good business.

 

Tracey Sharah | Founder and Director, Metro Accounting

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