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Unless the timeline is extended the incentive risks ‘failing to achieve its objectives’, says COSBOA.
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Associations call for extension of energy incentive
21 July 2023
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9 minute read
Several associations have called for an extension of the small business energy incentive, providing a submission to the federal government stating it needed to apply until at least 30 June 2025.
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The small business energy incentive was intended to encourage small firms to implement energy upgrades in their operations, such as the replacement of inefficient equipment.
COSBOA, the Ai Group, Business NSW, the ACCI, the Property Council of Australia and more all co-signed a submission that urged the government to extend the time frame of the incentive or risk it not achieving its objective.
The organisations said the currently proposed timeline with the incentive expiring on 30 June 2024 was problematic because it was not set to be passed by Parliament until August or September 2023 at the earliest.
The delay would mean businesses and their advisors would not have certainty about eligibility and what they could use the incentive to invest in until significantly into the only financial year that it was proposed to apply.
COSBOA said without an extended timeline the incentive “risks failing to achieve its objectives,” as many businesses lack internal energy expertise and would need to access advice to make the most of it.
“There are currently significant pressures on supply chains and skilled labour, meaning that businesses wishing to undertake upgrades may find themselves unable to source equipment or the expertise to implement change,” said the submission.
“The advice that small businesses rate most highly is that provided by peak bodies and engineering consulting experts. We note that there is currently no clear or consolidated approach to offer such advice, and we recommend complementing the incentive with a new program to provide advice and guidance on smart and efficient energy upgrades for small businesses.”
“We also note that poorly selected or implemented upgrades could lead to unwanted consequences. For example, where electrification from gas takes place, there is a clear need for electric appliances to be as smart and efficient as possible to ensure businesses reap the full benefits of the upgrade, and any growth of peak demand on the electricity grid is minimised.”
As part of the submission, the organisations also said there was a need to develop a longer-term strategy that involved incentives, capacity-building and product standards or regulation where appropriate and provided a robust basis for business investment in electrification and energy efficiency upgrades.
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