Policy update - Federal Budget special
Energy briefing update - June 2021
On Tuesday 11 May, the Federal Treasurer Hon Josh Frydenberg MP handed down the FY21/22 Federal Budget. Of note to businesses, the budget includes a range of spending to support activities to improve energy productivity and lower emissions, namely:
New spending on emissions reduction; and
Extension of tax incentives that can be used for investing in energy efficient equipment.
Check out the policy update for New South Wales, South Australia, Tasmania and Victoria.
Click here to return to the second edition of the energy briefing update.
New spending on emissions reduction
The Australian Government is investing an extra $1.6 billion over ten years in emissions reductions, including:
$279.9 million over ten years to establish a below baseline crediting mechanism (BBCM). This enables Australia’s largest greenhouse gas emitters liable under the Australian Government’s Safeguard Mechanism to generate ‘credits’ for reducing emissions below a set baseline to help realise abatement opportunities in large industrial facilities. The Government is expected to release a discussion paper on this measure in the near future which will start to reveal what this means for emission intensive businesses.
$1.2 billion over ten years to create a technology co-investment facility to support the implementation of the Technology Investment Roadmap and Low Emissions Technology Statements. Key pre-Identified focus areas are regional hydrogen hubs, carbon capture and storage, and new agricultural feed technologies to cut livestock methane emissions. The $6 million Methane Emissions Reduction in Livestock (MERiL) grants program is open until 6 July 2021 and more information on how to apply is available here. For more information about grants for business, see New grants and other opportunities.
$10.4 million over four years to expand the range of certifications offered by the Climate Active program and ensure it remains a best practice standard and certification scheme for Australian businesses looking to voluntarily reduce emissions.
extension of full expensing provisions
The Australian Government is extending temporary full expensing. This tax incentive can help improve the business case for businesses to invest in energy productivity enhancing equipment. The extension of temporary full expensing to 30 June 2023 means:
Business with a turnover of up to $5 billion will be able to:
immediately deduct the full cost of a new, eligible asset installed or ready for use between 6 October 2020 and 30 June 2023, with no limit on asset value; and
Immediately deduct the full cost of improvements made to existing depreciable assets by 30 June 2023
Businesses with a turnover up to $50 million will be able to immediately deduct the cost of all second-hand assets installed or ready for use by 30 June 2023.
For up-to-date information regarding thresholds and other information on tax incentives visit ato.gov.au.
Other jurisdictions
Check out the policy update for New South Wales, South Australia, Tasmania and Victoria here.
So, what’s next?
It is worth businesses staying on top of government policies and programs that impact them to ensure that they are actively managing the risks - and capturing the opportunities - of Australia's energy transition.
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For more opportunities that can support your business, check out the latest update on New grants and other opportunities.
Click here to return to the second edition of the energy briefing update.
About Navigating a dynamic energy landscape
There is an enormous amount of information on energy in the public domain, yet it can be hard for business leaders to extract what matters for their businesses.
Navigating a dynamic energy landscape: a briefing for Australian businesses is an executive-level briefing designed to cut through the noise and help businesses confidently navigate Australia’s dynamic energy landscape.
The sector spotlights and other resources that accompany the briefing exist to support this aim.
This initiative is delivered by the Energy Efficiency Council with the support of industry and the NSW Department of Industry, Planning and Environment.
To learn more visit energybriefing.org.au.