Australian businesses are facing extraordinary pressures.
From supply chain, staffing, and rising inflation, it’s saddening to hear (but not hugely surprising) that ASIC reported that for March there was a 20% uptick of businesses appointing external administrators, the highest reading since July 2019, and a 79% increase since March 2022 (source).
Naturally, many business operators tuned into the Treasurer’s 2023-24 budget announcement last night to hear what changes, incentives and opportunities the Government plans to introduce that could have significant repercussions for businesses.
Energy does take a lead role in this year’s Federal budget - as it should.
Over the last few years, Australian businesses have experienced the wrath of increased energy costs thanks to a range of factors including the Ukraine War, supply and demand issues, extreme weather events and coal station closures.
But with further energy price increases expected this year for businesses, what has the Government announced and have they gone far enough?
Here are the key energy portfolio outputs from the budget set to impact businesses:
1. $650 Energy Bill Support
As indicated in last year’s $3 billion power relief package, approximately 1 million small businesses will be eligible for a one-off payment of up to $650 to curb increasing energy costs.
Small businesses are the backbone of our economy. They are the largest employer and they contribute more than half of our national GDP and make up 99.8% of all businesses in Australia, critical to the nation’s economic prosperity and diversity.
Over the last few years, businesses have endured incomprehensible volatility and uncertainty and have shown enormous resilience.
In the face of rising energy costs, Choice Energy would have liked to have seen the government do more for Australian businesses.
The irony in all of this is the only reason the Albanese government could deliver a surplus budget for the first time in 15 years was due to soaring tax revenue on high-value exports such as coal, iron ore and gas.
Given the utter failure in energy policy from the last 10 + Prime Ministers, it is difficult to see how the Government could provide a complete solution overnight.
Not to mention, other external challenges outside of their immediate control, including the fact that the majority of our grid energy infrastructure networks are foreign-owned, and there are international geo-political factors such as the Ukraine War which have a direct impact on supply and demand and wholesale energy costs in our country.
We encourage business operators to work with an energy expert or consultancy such as Choice Energy to identify ways their business can lower its exposure to the energy grid and increase its energy efficiency.
NOTE: The information provided on this website is general in nature only and does not constitute personal or commercial financial or taxation advice. The information has been prepared based on our interpretation of the IAWO program and has not taken into consideration your personal or business objectives, financial situations or needs. Before acting on any information on this website, or others, you should consider the appropriateness of the information with regard to your personal or business objectives, financial situations or needs. Speak to your Accountant, Tax Advisor or the Australian Tax Office for any questions you may have with regard to the application of the Instant Asset Write Off for your business.