Manufacturers and those in the carbon sector may be more affected by the carbon tax. These businesses may need to seek specialist environmental planning advice to accurately capture, quantify and record all carbon tax-related costs.
Paul O’Brien, director of Kelly Scientific Resources Australia, told SmartCompany that businesses need to develop strategies to prepare for the start of the carbon tax, taking into consideration cost pass-through, contract review clauses, financing arrangements and energy saving measures.
“There is a lack of preparedness, to a point where 40% of SMEs still do not have a good grasp of how the carbon tax will affect their business,” he says.
“There are considerations that need to be taken regardless of the size of the business.”
Kelly says that assessing sustainability practices and implementing new policies should be at the forefront of a business plan to mitigate the risk of non-compliance, especially considering the possibility of heavy penalties resulting from non-compliance.
“It is important to find and identify the right support they need to tackle this. We are finding there is a role that is far more prominent now; that is the environmental planner.”
Kelly says in the private sector he is mainly seeing demand for environmental planning services from the manufacturing and mining industries, but he cautions these are not the only areas that may benefit from specialist advice.
“One company that caters to the SME market has already added a carbon tax module to their accounting survey,” he says.
Sharp says there is a lot of government funding available to lessen the impact of the tax and SMEs should investigate whether they are eligible for such funding.
This funding includes an $800 million to manufacturers for clean technology upgrades; $200 million for food processing, metal processing and foundry businesses; a $200 million innovation program to match research and development spend on a dollar for dollar basis; and a $40 million fund for an Energy Efficiency Information Grants program to educate SMEs on how to be energy efficient.
“There are even tax breaks for small business, and an asset write-off scheme,” says Sharp.
The small business instant asset write-off threshold has been increased from $5,000 to $6,500 for depreciable assets, which means businesses can get an immediate income tax deduction for the cost of eligible assets.
Now is the time to consider whether you are eligible for any of this funding.
Rather than being “the end of the world” for business, Sharp says the carbon tax presents an opportunity.
“A lot of the large companies and government buyers are looking now to green up their supply chain, there is opportunity for smart companies to differentiate themselves and gain new customers,” he says.
Sharp says you should “practice what you preach” and demonstrate your businesses’ environmental credentials by understanding your energy use and reducing the level of waste your business generates.
Any consumption should come from renewable sources; Sharp says you can buy Australian green power through accredited schemes.
Finally, you can offset the emissions that can’t be reduced, like business travel, or with carbon offsets for power.
“The trick for a business is to tell people what you have done: advertise in green publications, go to sustainability events, tell your contacts on social networks,” says Sharp.
“It is a very powerful story. You can demonstrate to your customers in qualitative and quantitative how you are being sustainable.”
Good examples of businesses that have looked for the opportunities in the carbon tax are in the travel and tourism sector, according to Sharp.
“There is huge growth in eco-tourism and even large hotel chains can buy carbon offsets as part of their sustainability and provide carbon neutral conference facilities,” he says.
“Hilton Hotels Australasia has done this and they have won more new business than they have spent on their offset program.”
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
