A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills, says the Energy Efficiency Council.
Under Labor’s Australian Investment Guarantee policy, businesses will be able to immediately deduct 20 per cent of an investment in eligible depreciable assets over $20,000, including those that lower energy use and improve energy efficiency.
Council CEO, Luke Menzel, said the policy was timely, and recognised that Australia is in the midst of a massive economic transition that will require businesses to use energy more efficiently and productively.
“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.
“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.
“The good news is that businesses can quickly slash their energy bills with ambitious energy upgrades that bring their operations in line with our global competitors. This new policy from Federal Labor will help businesses make an investment decision that brings down their energy bill straight away.”
The commitment comes following recent news from the International Energy Agency that Australia’s manufacturing sector is the most energy intensive of nineteen advanced economies, and a recent Federal Government report that found Australia’s rate of energy productivity improvement is slowing.
Mr Menzel said that politicians also need to bring energy prices down, but that that is a medium term proposition at best.
“We need to sort out the supply side of the market and bring down the unit cost of energy. But unfortunately that will take years. In the meantime, we can get serious about energy efficiency, and bring down bills straight away.
“Australia has a lot of ground to make up. We congratulate Federal Labor for committing to a policy that will help businesses take control of their energy costs, and call on all other parties to ramp up efforts to unlock the energy efficiency opportunity.”