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Small Business Energy Incentive revealed

The 2023-24 Federal Budget will allocate $314 million towards a new energy program aimed at lowering business power bills and emissions.

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The Small Business Energy Incentive will offer small and medium enterprises a new tax measure to help with their energy transition.

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

Modifications can include electrifying heating and cooling systems, upgrading to more efficient fridges and induction cooktops and installing batteries and heat pumps.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.

Federal Minister for Small Business Julie Collins said: “This new incentive will help address costs, support growth and improve the resilience of Australia’s small businesses.”

Victorian Chamber advocacy

The announcement aligns with the Victorian Chamber’s campaign to support businesses’ transition to a net-zero economy, Achieving a Net-Zero Economy: Roadmap for Victorian Businesses.

The campaign focuses on three core objectives: reducing energy prices, ensuring the reliable supply of energy, and supporting businesses transition to a net-zero economy.

The roadmap recommends Governments prioritise grants and subsidies to help reduce costs of energy and receive incentives to help encourage the smooth transition towards renewable energy as their primary energy source.

Victorian Chamber Chief Executive Paul Guerra said: “SMEs are feeling the pressures from energy bill shocks harder than most, so any relief to reduce their costs is a welcome contribution. This is also an important step in the country’s transition to net zero while helping grow businesses and ensure their future competitiveness.”

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