Six easy ways to prepare for the carbon tax
With the carbon tax just weeks away from becoming a reality, almost half of all small businesses say they’re in the dark about a legislation that’s very likely to have an impact on their livelihoods.
The latest MYOB Business Monitor found 42 percent of SMB owners still don’t have a clear idea about how the carbon tax will affect their business. Some 37 percent said they knew ‘quite well’ and 17 percent said they understand ‘very well’.
The most poorly informed industries, at 51 percent each, were agriculture, forestry, fishing and construction trade. The best-informed businesses are those in the finance and insurance industries, at 34 percent each.
The research found a distinct knowledge gap between the sexes, with 36 percent of males stating they’re ‘uninformed’ about the impact of the tax, compared with 51 percent of females.
“It is deeply concerning that our research has found such a low level of awareness about the carbon tax impact on business amongst SMEs, the engine room of our economy,” MYOB CEO Tim Reed said.
Half of small businesses surveyed believe the carbon tax will have a negative impact on their operations, with 33 percent expecting no impact and 11 percent expecting a positive impact. The remaining 5 percent did not know.
“This is a major piece of legislation that will have a lasting effect on all business owners. What many don’t realise is that the carbon tax could very well be a positive experience for those who take action now to research, plan ahead, health-check their business fundamentals and capitalise on the opportunities,” Reed added.
With this in mind, MYOB has these six steps for how businesses can prepare for the carbon tax:
1. Review your current expenses and those incurred over the past year, identifying energy intensive costs that will be affected by the inevitable energy price rises. Direct costs may be fuel, electricity and gas, and indirect costs may be business travel, freight and waste removal.
2. Gain a deeper understanding of where additional costs may be incurred by asking suppliers about the effect on their business and when they will be able to tell you their price impacts.
3. Consider locking in contracts with key suppliers now, at pre-carbon tax rates.
4. Review your important business processes and identify areas where you could be operating more efficiently by, for example, changing processes, upgrading equipment and re-training staff.
5. Analyse your current pricing and assess how the additional costs may impact your profit margins. You need to justify any price increases not only to your customers, but also to the ACCC if asked.
6. Ensure your accounting software is up to date so that the carbon tax changes are seamless.
To further assist SMBs to prepare for the carbon tax, MYOB has created a free downloadable ‘Carbon Tax Toolkit.’ The kit contains carbon tax facts, tips to help businesses lower their carbon footprint to save money, plus steps to help minimise the impacts and maximise the opportunities. We welcome all business owners to take advantage of this practical tool that we hope will make the carbon tax less taxing.