Clean Energy legislation in Australia

Today the Australian Clean Energy legislation package passed the senate. What it does is change the tax system (in line with the Henry tax review recommendations) so that companies/products using non-renewable energy sources see higher costs – this works through to citizens of course, and the other end of the change is compensation measures for them (such as a much higher tax free threshold) as well as initiatives for wider deployment of renewable energy sources. In focus it’s fairly similar to what’s been happening in Europe over decades, moving away from taxing income towards taxing consumption. So in a nutshell, if a consumer picks cleaner alternatives, they’ll be much better off than before.

The opposition is still harping on about it, including vows to repeal it (even though they’ve quietly already conceded that a number of related laws would stay – so if they were to repeal, they’d have a budget hole). I find that vow more of a threat, and very problematic. What business tends to like more than anything is certainty about the environment they have to operate in. Stability. So whether they liked the new laws or not, having them now is a clear state and they can work with it – the laws also create new opportunities for existing as well as potential businesses, and there too having the certainty is very important.

As an entrepreneur myself, I don’t want bet my business initiatives on having a low energy price – since regardless of the above mentioned legislation, the price of energy is going to keep going up, and likely quite significantly. I could, as others have done, go out lobbying for lower prices – but I see that as a less efficient way to spend my time.

Instead I aim to make sure that any business model preferably works independently of things like energy price, but at least works out even with a much higher price. I believe that’s the sensible way to go about it. I set up Open Query before the GFC, and because of its Upstarta way of operating it was in much better shape when other companies and independent consultants ran in to trouble. So the concept has been proven in that respect also.

On a psychological level, I reckon it must be hard to on the one hand oppose something and on the other hand build your business to deal with what you oppose. It’s a conflict that will compete for your time and attention, and from my observations the opposition work tends to win and the business work loses – then particularly if the opposition fails (which is always a real possibility) the business is in a much worse position than if it had focused on dealing with the issues. Somehow the chance of a favourable outcome is grossly misjudged and/or the cost of the business change is over-estimated. Either way, that strategy is damaging. Think carefully before you go such a route.

What do you deal with external change (such as govt legislation) in your business environment, what are your strategies?

Related Posts:

One thought on “Clean Energy legislation in Australia”

  1. Those who oppose “Australian Clean Energy legislation” and what on the other hand they “…build your business” are in conflict with their own paradigm (the map of the world that they hold).

    On a long-term basis they cannot succeed. Either the opposition wins or the new business reality wins.

Click on a tab to select how you'd like to leave your comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Notify me of followup comments via e-mail. You can also subscribe without commenting.