The treasurer Jim Chalmers has previewed plans for a Small Business Energy Incentive that will form a centrepiece of this month’s Budget offerings.

The new tax incentive is set to help business owners slash the cost of their energy bills by supporting them in transitioning to more efficient energy systems.

Energy transformation on the agenda

3.8 million small and medium-sized businesses are set to be impacted by the measure which the treasurer says will come in the form of a tax deduction.

“This incentive is all about helping small business save energy and save on their energy bills, support that comes on top of the direct energy bill relief for small businesses that will be a centrepiece of the budget,” Chalmers said.

The bonus tax deduction will provide businesses with an annual turnover of less than $50 million an additional 20 per cent deduction on spending that supports electrification and more efficient use of energy.

According to a joint media release from the treasurer plus Chris Bowen, Minister for Climate Change and Energy, and Julie Collins Minister for Small Business, the deduction will help small businesses make investments such as electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

The fine print of the Small Business Energy Incentive

The government expects the incentive, which is predicted to cost $314 million, will benefit businesses across the trade and manufacturing and hospitality sectors. The incentive is expected to deliver small businesses with ongoing power bill savings whilst reducing Australia’s emissions by helping businesses switch to cleaner energy.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business. To qualify for the incentive, businesses will need to have eligible assets/and or upgrades installed and ready for use between 1 July 2023 and 30 June 2024.

The announcement has been welcomed by small business advocates, with the Energy Efficiency Council calling it a win-win.

“Driving down energy bills through improved energy performance means one less cost that has to be passed on to consumers – it’s a win-win,” council CEO Luke Menzel said.

Minister for Climate Change and Energy, Chris Bowen said the incentive will lay the foundations for future growth.

“The Small Business Energy Incentive unlocks that investment to help businesses save on their bills over the medium and long term,” Bowen said.

Want more? Get our newsletter delivered straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter, Instagram, and LinkedIn.

Now read this:

https://www.kochiesbusinessbuilders.com.au/podcast/richard-turner-on-reaching-billion-dollar-success/