Carbon Pricing Tax Breaks The impact on your business Tim Bodey Principal 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 or www.climatechange.gov.au/reporting

The Tax Breaks (Individuals) Offsetting the “pain” of rising costs Changes to individual income tax rates, thresholds and rebates IncomeTax Rate (1/7/12)Tax Rate 1/7/15 Up to $18,2000%0 (↑ to $19,400) $18,201 - $37,00019% $37,201 - $80, %33% $80,001 - $180,00037% $180,000+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 assistance-estimator/ Puts the impact in $ and where some assistance from government is available

Pensions, allowances and family payments Who?SinglesCouples Pensioners*Up to $338paUp to $510pa *Income threshold$50,000$80,000 FamiliesPart A - $110 per childPart B - $69 per child Jobseekers1.7% increaseSingle $218pf Couple $390pf Students1.7% increaseSingle $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 – –Clean Technology Programs ($800M/$2Bn): ( CleanTechnologyProgram.aspx)

Other Government Grants of interest Enterprise Connect ( Business review / Advisor services Grow your business ( Strategic Review / Business Development Plan / Mentoring R&D Tax Incentive (new rules apply 1 July 2011)

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