VECCI is looking for SMEs in the Health, Transport and Warehousing and Accommodation and Food Services industries to participate in a trial of a new sustainability rating tool.

VECCI has partnered with Sustainability Victoria to undertake a trial of its new 5StarSustainability SME tool. If you have between 20 and 200 employees, collectively spend more than $20,000 on energy, water and waste and are willing to spend one to two hours with a VECCI Sustainability Consultant, your business has the opportunity to access this free service.

The 5StarSustainability SME tool is an online tool based on a sustainability performance framework for small and medium businesses. The 5StarSustainability SME tool provides an indication of current performance and guidance on what is required within a business to improve performance.

5StarSustainability for SMEs online tool is based on nine categories which include:

• Management and Leadership Practices
• Energy Efficiency
• Water Efficiency
• Materials and Waste Efficiency
• Climate Change and GHG Emissions
• Sustainable Supply Chain
• Community and Wellbeing
• Biodiversity
• Innovation and Integration

Once completed, the tool will provide participants with a sustainability rating (one to five stars) as well recommendations on how to improve their rating. This enables businesses to identify opportunities to save on resource use and in future and in benchmark their resource efficiency against their industry averages.

The tool was developed through the collaboration of Sustainability Victoria and Zero Waste South Australia with input from a range of business stakeholders. Sustainability Victoria has previously piloted the 5StarSustainability Industry tool for medium-to-large businesses in the manufacturing sector.

By participating in this trial with VECCI, your business will benefit from free on site consultation with a VECCI Sustainability Consultant, guidance and support to complete the online tool, and some great ideas to reduce costs for your business.

To register your interest, please call VECCI Sustainability Services on (03) 8662 5196. For more info on the tool, visit the 5StarSustainability website.

VECCI welcomes the State Government’s decision to repeal the 20 per cent emissions reduction target for Victoria. With the national emissions target and the impending carbon tax, we were in danger of having two targets, two burdens on business that would have put jobs and investment at risk.

VECCI has long held concerns about the existence of a state-based emissions reduction target on top of the operation of the national target under the Commonwealth’s Clean Energy Future legislation.

Victoria needs to do its fair share in contributing to the emissions reduction task but the operation of both state and national targets would have meant Victoria shouldered a disproportionate burden.

With Victoria’s reliance on brown coal as an energy source and our concentration of energy intensive, trade-exposed industries like automotive manufacturing and aluminium smelting, business was exposed to a significant cost impost.

At a time when economic conditions are fragile and many of our key industries, such as manufacturing and retail, are grappling with the impact of a higher Australian dollar and rising costs, the State Government’s decision is good news for Victorian business.

Economic analysis commissioned by the State Government has confirmed the impact the introduction of a carbon tax would have on the Victorian economy, with thousands of jobs to be lost and further pressure to be placed on the budget bottom line. 

Deloitte’s analysis shows Gross State Product (GSP) will decline by 1.8 per cent by the year 2015 and 2.6 per cent by 2030. About 35,000 jobs will be shed in the next four years, and the average income will decline by $1000.

The analysis differs from modelling released by Federal Treasury, which predicted only a 0.3 per cent reduction in national GDP by 2020, compared to a ‘medium global action’ scenario. Deloitte instead predicts a 2.2 per cent reduction.

Deloitte also predict:

• the Victorian budget position would be $600 million worse off by 2014-15
• a higher than the national average increase in electricity prices for Victoria
• nearly half of the jobs shed by 2015 will be in small businesses
• the Gippsland and Barwon regions would be more severely affected than the Mallee, Wimmera and Goulburn regions.

State Treasurer Kim Wells said the study was proof of the adverse impact the carbon tax would have on all Victorians, regardless of the industry they were involved in. Federal Treasurer Wayne Swan criticised the modelling, which Deloitte says has been aligned as far as possible with the Commonwealth modelling, but does not include the details of some Federal Government industry assistance packages.

Regardless of the exact form of the modelling, there is enough in this analysis for Victorian business to be concerned about: particularly the shrinking labour pool, the sharp increase in energy prices and the hole in the Victorian budget.

All of these effects will serve to make operating a business much more difficult in a few years than it is in already tough conditions now.

VECCI is calling on the State Government to review its land use regulations so previously off-limit areas can be opened to appropriate tourism-related investment.

The Victorian Competition and Efficiency Commission’s (VCEC) draft report into the state’s tourism industry recommends such a move and notes the State Government is already undertaking its own review into Green Wedge areas.

Allowing appropriate investment in the Farming, Rural Conservation and Green Wedge Zones would significantly improve the product the Victorian tourism industry is able to offer.

There is solid demand for nature-based experiences from visitors and a sensitive way to give them these experiences is to use existing sites in the city’s Green Wedge zones.

Many visitors to Victoria want accommodation services, food and beverage facilities and nature-based adventure tourism experiences in a natural setting.

Our natural environment is a competitive advantage that we have over other destinations and we should be thoughtfully using this by allowing appropriate tourism investment that will provide vital jobs and economic stimulus for these areas.

It is in the interests of the tourism industry to ensure any development is sympathetic to the natural environment because the rural landscape is integral to the visitor experience.

As well as providing jobs and economic stimulus for communities near Green Wedge zones, allowing private investment in these areas could result in better land management. For example pest management programs will be put in place where otherwise there may not be any.

Well managed private sector tourism development is also part of an economically responsible model for the creation of revenue to fund environmental maintenance and sustainability programs – attention that these Green Wedge zones don’t currently receive.

VECCI is calling on the State Government to adopt VCEC’s recommendation into Green Wedge land use and looks forward to contributing to the debate about responsible tourism development.

Earlier this week on the VECCI Blog, we published a poll giving you a chance to have your say on the Federal Government’s carbon tax and how it will affect your business. The results are now in, and they’re overwhelming.

In response to our question about whether you supported the carbon tax, 81 per cent of blog readers voted that they did not support the tax, with only 19 per cent expressing their agreement.

We also asked owners and managers what effect the proposed carbon tax will have on their business, and the results were similarly clear-cut. 78 per cent said it would have a negative effect, and 13 per cent believed it would have a positive impact. The remaining nine per cent said the tax would have no effect or weren’t sure yet what its effect would be.

Thanks to everyone who voted over the last couple of days. It’s clear that a large majority of business owners are very concerned about the higher costs the carbon tax will enforce, as well as the very limited amount of meaningful assistance they will receive.

VECCI will continue to advocate for more efficient methods of reducing carbon emissions that do not add to the cost of setting up and running a business in Victoria.

While a minority of small businesses, particularly in the green technology sector, will benefit, Sunday’s carbon price announcement will leave a sour taste in the mouths of most Victorian small businesses.

While we now know the carbon price and the exemptions, Victoria’s 500,000 small businesses were effectively been ignored in Sunday’s announcement.

Most households and some large businesses will receive compensation but small business will not receive any meaningful in this sense and will have to absorb flow-through power costs.

Small business risks being left as ‘the forgotten sector’, while already operating on low margins in the wake of soft consumer sentiment, interest rate rises and a high Australian dollar.

The Government has also drip-fed announcements through the media without talking to the small business sector, leaving small businesses to work it out for themselves.

There has been little modelling of the impacts on small business – the sector that employs the bulk of Victorians.

Victorian State Government modelling shows a cost to the State economy of around $2.5 billion and of up to $1,000 for the average small business such as the hairdresser, bakery and pizza shop via increased power costs.

According to this modelling, the cost to the average dairy farm will be $1,500, impacting heavily on regional Victoria.

We are also disappointed that there is a lot of stick and little carrot for small business.  We are struck by the lack of incentives to cut carbon intensity.

This package will mean small businesses will need to take further energy efficiency measures in their day-to-day business operations to keep costs down.

The Government package will include:

• A stipulation that the top 500 emitters of carbon will pay a carbon tax of $23 per tonne from 1 July 2012, rising at 2.5 per cent per annum in real terms (ie. above inflation). From 1 July 2015 onwards, the carbon price will be set by the market.
• Assistance for steel, coal, food, metal forging and foundry sectors to assist in transitioning to `cleaner’ energy technologies.
• The extension of the small business instant asset write-off threshold from $5,000 to $6,500 for depreciable assets from the 2012-13 income year, for businesses with an aggregated turnover of less than $2 million per annum.
• The establishment of a $40 million Energy Efficiency Information Grants program to provide information to small to medium businesses and community organisations on practical measures they can take to reduce their energy costs. This program will be delivered through grants to industry associations and non-government organisations which have established relationships with small businesses.
• The injection of an extra $5 million over four years to improve delivery of clean technology advice and other non-grant business support programs to small and medium businesses. These include the Industry Capability Network, Supplier Advocates and Enterprise Connect.
• The allocation of $240 million over four years to establish Clean Business Australia – a partnership with Australian business and industry for tackling climate change. The Climate Ready and Re-tooling for Climate Change programs assisted small to medium businesses to develop new technologies and services to respond to climate change and reduce their environmental footprint.
• A Small Business Support Line to provide small business owners with a single point of contact for access to information and referral services to improve their business sustainability and better manage their business. Support Line advisers link into the network of Business Enterprise Centres and other small business advisory services around Australia. Telephone: 1800 77 7275 Monday-Friday, 8am-8pm AEDST. Email: SBSL@innovation.gov.au.

Our carbon tax poll is now closed – thanks to all who voted. You can still have your say in comments below.

The owner of a Sydney restaurant that charges patrons $5 for a glass of water says it’s for an environmentally responsible cause – and if customers object, they can have it struck from the bill.

Mark Best, the owner and chef of Sydney’s Marque restaurant, has installed a $6000 water filtration and carbonation system, in what he says is an environmental initiative.

As a result, the water (which originates from the tap) comes with a $5 fee per customer, and has replaced the 30 cases of bottled water the restaurant was selling each week.

“The [bottled water] had to be stored downstairs so staff had to take it there, then bring it back up from the storage room, refrigerate it, store it then take the empties down for recycling, and I’m not kidding myself that it was all recycled,” Best said.

”I think a lot probably ends up in landfill and I started feeling more and more uncomfortable with that.”

The filtration system installed is believed to be the first of its kind in Australia, and Best says most customers are prepared to pay $5 to be able to drink it. However is customers object to the unusual cost, they can have it removed from their bill under liquor licensing regulations, which states a customer is entitled to request and receive free tap water at a licensed venue.

It’s not the first unusual environmental initiative from a Sydney restaurant – last year on the VECCI Blog we covered the story of a restaurant that offered customers a discount if they ate all the food on their plate, to minimise food waste.

Have you heard of any other unusual initiatives by businesses to encourage cleaner environmental habits? Let us know.

The results of a newspaper opinion poll showing a majority of Australians are opposed to the introduction of a price on carbon, and want the Federal Government to take it to an election, should come as no surprise.

Fifty-eight per cent of people oppose the Government’s plan to put a price on carbon emissions, with only 28 per cent supporting it, and 14 per cent remaining unsure.

With no details about the actual level of pricing, the industries to be exempted or receive special treatment, or the level of compensation for households and small businesses, and predictions about the cost of goods and services rising substantially, it is little wonder the public is largely opposed at this stage of the debate.

In its current form, the carbon tax seems to be all stick and no carrot, all costs and no incentives, and would simply increase Australia’s cost base while other countries’ costs remain stable.

The Government has much work to do over the next 12 months if it is to proceed with its planned July 2012 start date to win business and the public over. Firstly, it must look at how to reward early adopters of low carbon initiatives, such as the many businesses who participate in Carbon Down and other resource efficiency programs.

It must also consider other schemes, including baseline and credit and intensity-based schemes, which have a smaller impact on energy prices because firms only have to buy credits above the baseline.

Like everyone else, we continue to play the close to torturous waiting game for the final detail.

Should the Federal Government do more to reward early adopters of low carbon initiatives? Let us know your thoughts.

In a speech this week, BHP Billiton Chairman Jac Nasser proposed a different, staggered method for reducing carbon output that focuses on individual sectors, which deserves much greater consideration.

As the chairman of Australia’s largest miner (and therefore one of our largest emitters of carbon dioxide), Mr Nasser and his company have been heavily involved in consultations with the Federal Government about the structure of the method for reducing carbon emissions.

In a speech to the Melbourne Mining Club on Monday, Mr Nasser promoted the merits of a ‘sectorial’ approach, where a different approach could be implemented for different parts of the economy.

For instance, Mr Nasser said different solutions could be devised for the power generation and transport industries, with another approach for normal households.

“There’s a mosaic of different alternatives, depending on the sector that you’re in,” he said. “The solutions for each sector may be completely different.”

The solutions would then be implemented at different times for a steady, ‘go slow’ approach to pricing carbon, until all parts of the economy were covered.

While Mr Nasser did not list what the potential solutions could entail, his theory is worth further exploration, and reduces the chances of there being winners and losers from a ‘catch all’ carbon tax, even if some sectors receive exemption or extra assistance.

It also reduces the chance of a sudden jolt to the economy if a carbon tax is introduced uniformly on the planned date of 1 July 2012, as announced earlier this year.

Mr Nasser said that BHP Billiton still believed “moving early” on carbon was important for Australia, but we shouldn’t “get into the trap” of thinking Australia’s behaviour would influence other countries.

“We have to do what’s right for us,” Mr Nasser said.

It’s a premise VECCI absolutely agrees with. As we’ve written before on the subject, reducing carbon emissions is a priority but the Government must not implement a carbon pricing scheme that will harm Australia’s competitiveness internationally, and we reinforce that message as the consultation process continues in earnest.

Whatever the outcome of the debate in Canberra, Victoria’s transition to a lower carbon economy will be smoother if industries receive support from the State Government, starting with its first State Budget in May.

With the Federal Government’s plans for a carbon tax in motion, it would be prudent to develop strategies to improve resource efficiency and smooth business adjustment.

The new State Government must use its first Budget to continue to support efforts from the private sector to manage and mitigate risks associated with the transition to a lower-carbon economy.

Many small businesses are already taking steps to reduce their carbon footprint, recognising the benefits to their business’s bottom line – programs such as Carbon Down, which assist small to medium sized businesses transition to a lower carbon economy, have been extremely helpful in improving business sustainability.

The State Government must also ensure Victoria is well placed to meet anticipated future electricity demand. Over the next two decades it’s anticipated that $10 billion worth of investment in the power transmission grid alone will be required, with $18 to $36 billion worth of generation capacity required.

While there have been some new investments in transmission and interconnectors in recent years, the State’s projected population growth will increase pressure on our power supply – put simply, our future power needs must be planned for now.

VECCI also recommends the State Government use its first State Budget to:

• Work closely with industry and regulators to speed up the process of new investment in electricity transmission and distribution, ensuring electricity prices are competitive for industry and households
• Continue to support and fund arrangements to help key industries and their communities transition to lower impact generation and alternative energy supplies
• Support regional industry diversification to ensure vulnerable regions can leverage off emerging industries
• Using the Green Door model, go beyond one-off grants and provide an ongoing stream of support for innovative, sustainable business opportunities
• Extend funding for Carbon Down to accelerate and expand the take up of emission reductions and cost reducing actions by SMEs.

While the Federal Government’s plan for a carbon tax has meant small business must prepare for such a regime, the uncertainty around the proposed tax is still causing some anxiety as to what exactly the effect will be on business.

In the meantime, the State Government must ensure it is doing all it can to help Victorian businesses prepare for a lower-carbon economy and the expected carbon price, ensuring they can remain competitive.

More information about VECCI’s State Budget Submission can be found at whatbusinesswants.com