August 2022 News- It’s Not Easy Being Green

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Climate Change- Impact on Business and Consumers

The Government’s Climate Change Bill passed the House of Representatives in early August and is now before the Senate Environment and Communications Legislation Committee for review. The Climate Change Bill ensures the emission target Australia has committed to through legislation. The Bill itself sets an accountability framework for climate targets but does not introduce mechanisms to cut emissions. 

The energy sector will be the main one impacted in Australia, with CSIRO stating energy contributes 33.6% of all emissions, with a further 20.54% from stationary energy such as manufacturing and mining, transport 17.6% and agriculture 14.6%. 

The Government have committed to a number of initiatives already, with further investment expected towards lower emission suppliers. Business can expect directed funding for co-investment in emission reduction technology, Government spending to be focused from the perspective of the renewed emissions targets, and for new funding opportunities to advance low emission technology.

FBT- Free Electric Cars

Making electric vehicles FBT-free is the first step in the Government’s plan to make zero and low emissions vehicles the car of choice for Australians. The proposed FBT exemption is intended to apply to cars provided by an employer to an employee under the following conditions:

  • Low and zero emission cars
  • The car was first held and used on or after 1 July 2022
  • Value below luxury car tax threshold for fuel efficient vehicle

Claiming Crypto Losses

The ATO has released updated information on claiming cryptocurrency losses and gains in your tax return. Gains and losses from crypto are only reported in your tax return when you dispose of it- sell it, convert it, exchange it for another type of asset, buy something with it etc. This should be reported in your tax return in the year that the disposal occurred. 

If you made a capital gain on crypto that was held as an investment, and you held the crypto for more than 12 months, then you may be able to access the 50% CGT discount and halve the tax you pay. 

If you made a loss on your crypto when you disposed of it, you can generally offset the loss against gains you might have. 

Interest Rates

The RBA has again lifted the cash rate to 1.85% in early August 2022. The Reserve Bank Governor Phillip Lowe has told the Australian Strategic Business Forum that “we should expect interest rates of 2.5%- how quickly we get there really depends on inflation”. Inflation is now forecast to reach 7.75% over 2022 before trending down.  We’re not expected to reach the RBA’s target inflation rate range of 2% to 3% until the 2023-24 financial year. 

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