Policy Update – Federal Budget Special

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On Tuesday 11 May, the Federal Treasurer Hon Josh Frydenberg MP handed down the FY21/22 Federal Budget. Of note to businesses, the budget includes a range of spending to support activities to improve energy productivity and lower emissions, namely New spending on emissions reduction; and Extension of tax incentives that can be used for investing in energy-efficient equipment.

Read on to learn more

 


 

NEW SPENDING ON EMISSIONS REDUCTION

The Australian Government is investing an extra $1.6 billion over ten years in emissions reductions, including:

  • $279.9 million over ten years to establish a below baseline crediting mechanism (BBCM).   This enables Australia’s largest greenhouse gas emitters liable under the Australian Government’s Safeguard Mechanism to generate ‘credits’ for reducing emissions below a set baseline to help realise abatement opportunities in large industrial facilities. The Government is expected to release a discussion paper on this measure in the near future which will start to reveal what this means for emission-intensive businesses.

  • $1.2 billion over ten years to create a technology co-investment facility to support the implementation of the Technology Investment Roadmap and Low Emissions Technology Statements. Key pre-Identified focus areas are regional hydrogen hubs, carbon capture and storage, and new agricultural feed technologies to cut livestock methane emissions. The $6 million Methane Emissions Reduction in Livestock (MERiL) grants program is open until 6 July 2021 and more information on how to apply is available here. For more information about grants for business, see New grants and other opportunities.

  • $10.4 million over four years to expand the range of certifications offered by the Climate Active program and ensure it remains a best practice standard and certification scheme for Australian businesses looking to voluntarily reduce emissions.


EXTENSION OF FULL EXPENSING PROVISIONS

The Australian Government is extending temporary full expensing. This tax incentive can help improve the business case for businesses to invest in energy productivity-enhancing equipment. The extension of temporary full expensing to 30 June 2023 means:

  • Businesses with a turnover of up to $5 billion will be able to:

    • immediately deduct the full cost of a new, eligible asset installed or ready for use between 6 October 2020 and 30 June 2023, with no limit on asset value; and

    • Immediately deduct the full cost of improvements made to existing depreciable assets by 30 June 2023

  • Businesses with a turnover of up to $50 million will be able to immediately deduct the cost of all second-hand assets installed or ready for use by 30 June 2023.

For up-to-date information regarding thresholds and other information on tax incentives visit ato.gov.au.

For a policy update for New South Wales, South Australia, Tasmania and Victoria – click here.

 

Need assistance in leveraging new spending or extensions of schemes and programs? Connect with Ecosave or Call 1300 55 77 64

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