The Government announced that it will not proceed with the Tax Breaks for Green Buildings program. The program would have driven significantly higher cost abatement than that delivered by the carbon price.
The Government estimates that the discontinuance of the program would increase revenue by $390m over the forward estimates period. Funding for the Department of Climate Change and Energy Efficiency will also be reduced by $15.2m over 5 years from 2011-12.
Source: Budget Paper No 2 [p 42]
[Thomson Reuters comment: The Tax Breaks for Green Buildings program was announced as part of the Government’s 2010 election campaign. It was originally due to start on 1 July 2011 but was then deferred to start on 1 July 2012. The program was due to run until 30 June 2015.
Under the program as proposed, businesses that undertook capital works to improve the energy efficiency of their existing buildings – from 2 stars or lower to 4 stars or higher – would have been able to apply for a one-off bonus tax deduction of 50% of the cost of the eligible assets or capital works. For example, a business that invested $1m on assets or capital works to significantly improve the energy efficiency rating of its building, such as energy efficient lighting or air-conditioning systems, would have been eligible for a bonus tax deduction of $500,000.
The Tax Break would have covered specified expenditure which was incurred as part of a qualifying retrofit of an existing office building, hotel or shopping centre. The retrofit was to have been assessed by an accredited National Australian Built Environment Rating System (NABERS) assessor before and after the project.]
[WTB 19, 8/5]