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Business Power – Carbon tax and small business power prices

From 1 July 2012, small businesses have faced a power price increase due to the introduction of the carbon tax. Before looking at the impact of the carbon tax and small business power prices, it makes sense to understand what the carbon tax is and why it has been put into action.

The world is currently facing the threat of climate change. Scientists advise that global warming, as a result of increasing carbon pollution, is leading to dramatic environmental changes such as rising sea levels and drought, with economic consequences on infrastructure, agriculture and tourism.

In spite of the harmful impact on the environment, releasing carbon pollution was free, until now. On 1 July 2012, the Australian Government introduced a price on carbon as the most environmentally effective and economically efficient step to reduce pollution.

The carbon tax puts a price on the carbon pollution emitted by Australia’s largest polluters. About 500 companies will pay $23 for each tonne of carbon they emit as carbon dioxide to encourage cleaner, more efficient ways of operating.

The plan encourages businesses across all industries to find ways to reduce carbon pollution and invest in cleaner and green technology to improve energy efficiency. If businesses can reduce their carbon emissions, the carbon tax and the business power prices they pay will be less.

The government has promised small businesses will have no direct obligations to pay a carbon price, monitor their carbon pollution or electricity use, or undertake any compliance under the scheme.

Yet small businesses face indirect impacts as larger companies pass on the extra costs to small businesses and consumers through goods and services such as fuel, freight, electricity and waste removal.

For example, small business power prices have risen dramatically since 1 July, when electricity providers increased electricity rates and supply charges.

Therefore businesses need to find smarter ways to improve energy efficiencies and reduce their business power costs to minimise the impact of the carbon tax as we move to a low carbon economy.

The Federal Government has put a number of measures in place to assist small to medium businesses improve their energy efficiencies and reduce business power prices including:

  • An increase in the instant asset write-off to $6,500 to help small businesses upgrade to environmentally friendly equipment.
  • $5 million funding over four years to improve and advise small businesses on clean technology.
  • A $40 million Energy Efficiency Information Grants program via industry associations to help small businesses learn to improve energy efficiency with practical measures to reduce business power prices.
  • A Small Business Support Line (1800 777 275) to help improve sustainability and management.

The carbon tax gives small businesses an opportunity to assess and reduce their carbon footprint to play a vital role in reducing climate change and lead Australia to a clean energy future before it’s too late.

Energy Quotes can assist businesses by providing tailored energy solutions and cost effective options for reducing energy bills with free quotes from a number of suppliers. For more information call 1300 697 868 or visit www.energyquotes.com.au

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