Carbon tax winners and losers

Budding entrepreneurs will have been forgiven for being confused by the increasingly shrill carbon tax debate, with plenty of contradictory assessments of its impact bandied around in recent months.

With Sunday’s unveiling of the carbon price at $23 a tonne start-ups are at least now dealing with solid facts rather than speculation.

As predicted the tax is aimed at 500 of the nation’s largest carbon emitters, with around $15 billion raised from the tax handed back to households.

But what will be the impact on emerging businesses?

The details are still murky, to the chagrin of the likes of Peter Strong, executive director of the Council of Small Business of Australia, who says: “We want to know how this will affect the retailer in the shopping mall, what it means for a pharmacist.

“At the moment, it’s simply everyone yelling at each other.

“Will it increase costs and by how much? It’s difficult for businesses to plan if they don’t know how much they’ll be impacted.”

To help you peer through the gloom a little better we have compiled five winners and five losers from the carbon pricing plan.

Hopefully the former list will prove much longer than the latter when the scheme comes into effect on July 1 next year.

Winners

1. Energy efficient businesses

Do you take energy efficiency seriously in your business? If yes, you are set to do better than your competitors when electricity prices rise, by a predicted $3.30 a week.

If you haven’t embraced energy efficiency, the carbon price plan gives you a helpful shove towards doing so. $40 million has been set aside in grants to aid small businesses and community groups become less wasteful in their energy consumption.

2. Renewable start-ups

Despite being blessed with the natural resources to launch thousands of profitable green-tinged businesses Australia has fallen behind mainly due to an unfavourable investment environment.

The $10 billion Clean Energy Finance Corporation will go a long way to remedying that, providing a much-needed leg-up to start-ups with great renewable ideas but unwilling investors.

The success or failure of the fund will go a long way to determining whether Australia will derive 20% of its energy via renewables by 2020.

3. Heavy car users

Following a handy boost at the last Budget start-ups that rely heavily upon their cars have been given further help, with small business fuel use exempt from the carbon tax.

The exemption was widely predicted, but the confirmed inclusion will be a relief to companies that clock up the kilometres on the road.

4. Investors in equipment

The instant asset tax write-off for businesses with turnover less than $2 million is to be increased from $5000 from $6500.

This means that assets bought after July 1 next year will receive a larger deduction, aiding start-ups that want to invest in equipment at this time.

The government says for example, a café owner who purchases a freezer for $6000 could claim the entire $6000 due to the increase in the asset write-off limit.

5. Low income groups

Low income Australians are undoubtedly the clear winners in the plans revealed on Sunday, with around four million households set to be better off as a result of the scheme.

There will be a tripling of the tax-free threshold from $6000 to $18,200 from July next year. That will move to $19,400 in 2015. Those earning under $80,000 will fare best, with pensions set to rise by 1.7%.

Businesses will hope this will spur an uplift in consumer spending among a persistently cautious lower-income Australian public.