The federal government has announced a special increase in tax deductions for small businesses that invest in electrification and energy efficiency.
Businesses with turnover up to $50 million will be entitled to a bonus 20% tax deduction on batteries and other electrical devices when they invest up to $100,000 to swap out fossil fuel energy and technology.
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The maximum bonus tax deduction being $20,000 per business. It is estimated the measure will cost $314 million over the forward estimates.
The news has been welcomed by Rewiring Australia co-founder and chief scientist, Dr Saul Griffith, who said the increased deductions would help accelerate electrification among Australia’s 3.8 million small and medium businesses.
“The federal government promised a ‘meaningful and substantial’ package of electrification measures in the federal budget and this announcement is the first part,” Dr Griffith said.
“Swapping out fossil-fuelled devices and energy sources for renewable-backed electrification is the fastest, most cost effective way to decarbonise our domestic economy. It embeds thousands of dollars worth of annual savings into the annual operations of small businesses, savings that accrue over the long term.
“Many small businesses who are reliant on fossil fuel energy have suffered serious bill shock this year as commodities such as gas have spiked. But when you assist small businesses to swap out polluting energy sources and machines for renewable-powered electric versions you permanently lower the cost base of a business.
“Once a business has switched to solar-backed electrification, they never look back.
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“Switching to rooftop solar and electric devices gives businesses certainty. They know their operating costs won’t suddenly surge due to something beyond their control. When people take the risk of starting a business and employing people, the last thing they need is a spike in the gas or coal price due to a foreign conflict.
“Electrification can usher in a new era of abundance and stability for Australian small business. Over time we can keep more of the money we are currently losing to fossil fuel imports in Australia, supporting Australian jobs.”