With a focus towards making Australia reach net zero emissions by the target date of 2050, the government revealed several changes within the 2023-2024 Federal Budget that can both affect and benefit small businesses. The $113.1 million being redirected across the Climate Change, Energy, the Environment and Water portfolio to fund portfolio policy prioritisation over the next eight years includes various environmental incentives for SMEs.
New investment and incentive initiatives have been created to help reduce carbon emissions across the country, raise more funds for alternative energy, while helping all residents understand and enact efficient energy use.
We’re highlighting three points that could help your small business. Read on to find out about some of the budget incentives available that can benefit both your work environment and the global environment.
Energy Incentives
The aim of the Small Business Energy Incentives are to further the electrification of the country. Businesses will be provided with help in the way of monetary incentives, and support, so that they can reduce their own energy consumption and have better energy efficiency through all operations.
There are many energy-efficient systems that small and medium businesses can invest in to receive tax deductions. If your business has an annual turnover of under $50 million you may be eligible for a bonus tax deduction of 20%. This applies to electric heating systems, batteries, next-gen refrigeration, or thermal energy storage to name a few. With a limit of $100,000 this means that you can receive up to $20,000 worth of tax deductions.
There is also an ‘instant asset write-off’ of $20k available to immediately deduct against eligible assets for businesses with a turnover of under $10 million.
Reducing Emissions and More EVs
Transport in Australia is our third-largest source of emissions and with a growing preference for large vehicles in the country the gains reached through the introduction of electric vehicles is being depleted. By introducing various initiatives, the government aims to see a significant reduction in emissions over the next five years.
If your business is linked to the Electrical Vehicle (EV) market, or if you are considering purchasing an EV for yourself or the company fleet, you may be able to benefit. Funding will be available to support research on retrofitting existing buildings with electric vehicle charging infrastructure, as well as large format battery recycle, reuse and stewardship initiatives within Australia.
Since July 2022 employers no longer pay FBT on eligible electric cars and associated car expenses. However, the 2023 budget did confirm that plug-in hybrid electric cars (PHEVs) will be removed from the fringe benefit tax exemption for electric cars for any PHEVs delivered after 1 April 2025.
Renewable Hydrogen
The Hydrogen Headstart program is being designed to help create a renewable hydrogen industry domestically within Australia. $2 billion has been set aside to underwrite the largest green hydrogen projects to be built in the country, and to help accelerate the growth of the industry. It will provide funds to cover the commercial gap between the cost of hydrogen production renewables and the current market price, provide revenue support for investments in renewable hydrogen production through competitive contracts, and ensure that large scale projects that are currently in development will be able to succeed to completion.
If your business falls within this industry, for example providing industry support or supplying materials, you may be able to take advantage.
If you think that your business may be able to benefit from this initiative, or would like to learn more you can visit the Department of Climate Change, Energy Environment and Water (DCCEEW) website.
If you want to find out more about how the new environmental focus points within the budget may affect or benefit your business, you can contact our Accru experts today.
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