All businesses will be able to immediately deduct 20 per cent of investment in eligible energy efficient depreciable assets over $20,000, under a new plan revealed by the federal Labor Party.
If elected, the plan could have a massive impact in the built environment sector, according to industry.
Announcing the plan, shadow climate change and energy minister Mark Butler the plan would boost investment in energy saving projects, lower bills, cut emissions and add jobs.
“At a time when energy costs are threatening jobs across the economy, the Australian Investment Guarantee will make it much easier for all Australian businesses to invest in energy saving projects and upgrades,” Mr Butler said.
“From small businesses upgrading refrigeration systems, to the largest manufacturers upgrading smelters, Australian businesses will receive permanent, targeted tax support to modernise and cut their energy bills.
“Unlike previous programs to boost energy efficiency through greater business investment, the Australian Investment Guarantee is easily accessible to all businesses and will operate through the tax system, minimising compliance costs and maximising the benefits to business, workers and the climate.”
The news was welcomed by the Property Council, Energy Efficiency Council and Australian Industry Group.
EEC chief executive Luke Menzel said the plan would help remedy Australia’s poor energy productivity.
“We know from a raft of reports over many years that Australian businesses use more energy than their competitors overseas, and Aussie manufacturers are at the back of the pack when it comes to energy productivity,” he said.
“That was fine, even five or six years ago. But now manufacturers and other large energy users are caught in a pincer movement between rising electricity and gas prices. And in some cases these cost pressures are threatening jobs and business viability.”
He said companies would be able to cut bills with “ambitious energy upgrades”.
“Federal Labor will help businesses make an investment decision that brings down their energy bill straight away.”
PCA chief executive Ken Morrison said efficiency gains would help many industries, but especially the built environment.
“The built environment may not be top of mind when we think about big energy users but the fact is that buildings account for 23 per cent of Australia’s emissions and over half of our electricity consumption,” Mr Morrison said.
“Bringing forward investment in energy saving equipment to improve the performance of our buildings would have a huge impact on energy use and emissions.
“The long lifespan of our buildings means that this benefit would be felt for decades.”
Ai Group chief executive Innes Willow said the announcement came at a time of low business investment.
“As a measure designed to lift investment, the Investment Guarantee would increase the stock of invested capital, boost the quantity of capital per worker, raise productivity and underwrite an acceleration of real wage growth,” he said.