Carbon PricingTax Breaks

The impact on your business

Tim BodeyPrincipal

WHK Ballarat

Overview of today’s session

• “Clean Energy Future” package

• Reporting requirements

(NGER)

• Income Tax breaks

(individuals and businesses)

• Families and Pension benefits

• Small/Medium businesses (SMEs) impacts

• What can we do now and into the future?

“Clean Energy Future” package

• Applies from 1 July 2012

• Starts out as a tax ($23p/T and indexed) for top 500 emitters

• Moves to Emissions Trading Scheme (1 July 2015)

National Greenhouse and Energy Reporting Act 2007

• Three year reporting program to determine to top 500 (or so) emitters

• Third and fourth tier thresholds apply to 30 June 2011 financial year

– Facility: 25,000kT greenhouse gas or 100Tj energy

– Corporate Group: 50,000kT greenhouse gas or 200Tj energy

• Some SMEs will have reporting requirements for the first time (register 31 August and report 31 October)

• Civil penalties for failing to register and possible personally liable for CEOs

Reviewing for NGER

• Now is the time

• Good data gathering procedures

• Record keeping processes

• Some Outcomes:

– Cost savings identified

– Streamlining of operations

– Better position to identify other opportunities

• www.climatechange.gov.au/reporting or 1800 018 831

The Tax Breaks (Individuals)

• Offsetting the “pain” of rising costs

• Changes to individual income tax rates, thresholds and rebates

Income Tax Rate (1/7/12) Tax Rate 1/7/15

Up to $18,200 0% %0 (↑ to $19,400)

$18,201 - $37,000 19% 19%

$37,201 - $80,000 32.5% 33%

$80,001 - $180,000 37% 37%

$180,000+ 45% 45%

• Low Income Earner Rebate reduces from $1,500 to $445

Impact on the family home

• Estimates suggest that approximately three million household will be adversely affected by the Carbon Tax

www.cleanenergyfuture.gov.au/helping-households/household-assistance-estimator/

• Puts the impact in $ and where some assistance from government is available

Pensions, allowances and family payments

Who? Singles Couples

Pensioners* Up to $338pa Up to $510pa

*Income threshold $50,000 $80,000

Families Part A - $110 per child Part B - $69 per child

Jobseekers 1.7% increase Single $218pf

Couple $390pf

Students 1.7% increase Single $177pf

• Small business (less than $2M turnover) - Asset write off from $5K to $6.5K

• Eligible industries - Energy efficient capital equipment grants (up to $25K); tender process

• Cost of acquiring “permits” tax deductible

• Issue of permits not subject to GST, but trading of carbon under ETS from 1 July 2015 will be

• Monitoring registration requirements

(possible increased administration)

Tax breaks and other considerations for SMEs

Impacts on a small – medium sized business

• Increased cost of energy, water and waste disposal

• Increased cost of food and beverage

• Increased cost of cleaning products, packaging

• Increased customer awareness

• Change of product mix to meet consumer demand changes

• Inability to pass on the price increases (maker/taker)

• Increased freight and cartage costs

(deferral of Carbon Tax on fuel until 1 July 2014)

• Costs to covert to energy efficient products

(mostly $3 spend for $1 recovery)

Business Energy Assessments

• Initial overview of your current usage

• Identify energy savings in your business

• Government initiative

• Concludes 31 December 2011

• Cost: $275 inc GST depending on size of business (turnover and staff numbers)

• Some businesses have identified up to 30% in savings in power costs

What can you do now?

• Review internal costings and energy usage

• Appoint a “green team” – staff really get involved

• Seek out government funding opportunities:

– AusIndustry

– Regional Development Victoria

– www.grantslink.gov.au

– Clean Technology Programs ($800M/$2Bn):

• (www.innovation.gov.au/Industry/CleanEnergyFuture/Pages/CleanTechnologyProgram.aspx)

Other Government Grants of interest

• Enterprise Connect (www.enterpriseconnect.gov.au)

Business review / Advisor services

• Grow your business (www.business.vic.gov.au)

Strategic Review / Business Development Plan / Mentoring

• R&D Tax Incentive (new rules apply 1 July 2011)

www.whk.com.au

21 Armstrong Street NorthBallarat 3350

timothy.bodey@whk.com.au

Thank you