Small business groups welcome delay on CPRS, but warn SMEs to start preparing

Small business advocates have welcomed the Federal Government’s decision to delay the carbon pollution reduction scheme until 2013, saying it will give businesses more time to understand and prepare for the legislation’s impact on their own operations.

It comes after a frustrating series of failed battles for the Government to have the legislation passed in the Senate, with the controversy even serving as the catalyst for Opposition Leader Tony Abbott’s rise to power.

Prime Minister Kevin Rudd announced yesterday the legislation would be delayed until at least next year, and that the beginning of any new scheme would be delayed until 2013.

Additionally, Rudd also said the Government will wait until the first phases of the Kyoto Protocol expire in 2012 before implementing the first elements of the scheme.

“That will provide the Australian Government at the time with a better position to assess the level of global action on climate change,” Rudd said yesterday. He added the Government would also ”make its assessment on the implementation of a CPRS… based on the commitments which are then entered into by the rest of the international community”.

Businesses groups are happy with the decision. The previous legislation would have seen SMEs forced to pay extra costs to keep in line with new regulations, and many businesses were uninformed about how the scheme would actually work.

Jaye Radisich, chief executive of the Council of Small Businesses of Australia, says the introduction date of the legislation doesn’t matter if the provisions included in the scheme don’t protect SMEs.

“From a small business point of view, we still believe that any CPRS needs to make proper acknowledgement of the role that small business has in the economy. It would also be unfair if the full cost of a CPRS is borne by small businesses, which wouldn’t be able to receive any exemptions seen in other industries.”

“We maintain the view that irrespective of when the legislation comes into play, small businesses need a fair go.”

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry, also says the Government has taken the right step in delaying the legislation, noting other countries are far behind schedule when it comes to implementing schemes of their own.

“This is a responsible step forward. Australia should not act unilaterally to responses to climate change, and after Copenhagen it was clear that other nations were not moving in the same way that Australia had proposed. SMEs have been spared the immediate prospect of higher energy costs.”

While Anderson says there is an element of uncertainty during the wait for the new legislation, he says businesses can use this time to investigate their own practices and reduce costs.

“Energy efficiency is in the interests of business, because conserving energy consumption is good business practice. But compelling Australian businesses to incur costs that other nations do not incur renders are industry uncompetitive. The opportunity exists now for businesses to look inside their own models to introduce new technology and change working methods to conserve energy.”

But Heather Ridout, chief executive of the Australian Industry Group, disagrees. She believes businesses are committed to reducing emissions and improving efficiency, and said in a statement that the Government should introduce at least some type of scheme quickly to reduce the amount of uncertainty for SMEs.

“It would, therefore, be regrettable if the Government did not move expeditiously to introduce the key elements of the proposed Climate Change Action Fund (CCAF) to help industry transition to a more carbon constrained economy. Energising the CCAF now will help businesses to build their capacity and reduce their exposure to the associated risks and costs.”

“Ai Group has established a Leaders’ Group which is currently looking anew at climate policy. The Group is examining approaches to climate policy with a particular focus on the importance of maintaining the international competitiveness of Australian industry; reducing emissions at least cost; and the impact of costly regulatory intrusions on private sector decision-making.”

Katherine Woodthorpe, chief executive of the Australian Private Equity and Venture Capital Association, doesn’t believe her organisation’s members will be affected by the new legislation.

“Our members tend to be smaller technology companies rather than large infrastructure players, so their market is global,” she says.