Sustainability saves small businesses some cheddar this tax season

As the financial year wraps up, small businesses can seize the chance to save precious pennies and the environment. Monash CliComm's Mandeep Singh shows how going green pays off.

Experts observe that Australia's climate is warming.

As Aussies rush to balance their books for the end of the financial year, some small businesses are using the opportunity to fight climate change.

Hakim Halim, owner, founder and mastermind behind Melbourne's award winning RIPE Cheese, has always been great at blending sustainability into his business models.

For small business owners like him, this is a critical time to evaluate and optimise operations.

By integrating sustainable practices and leveraging eco-friendly incentives, small businesses can lighten their footprint on the environment while maintaining their bottom line.

"We only supply, stock and champion local produce," said Hakim.

"This creates a much smaller carbon footprint because of the shorter supply chain, it also stimulates the local economy, and attracts more customers to our cheese shop."

RIPE Cheese also has well established composting and recycling practices, and has partnered with Dairy Australia who are taking steps to transition the nation's dairy industry to net zero.

However, Halim acknowledged that while sustainability and achieving net zero are important, the process is not always easy.

For example, transitioning to eco-friendly packaging or investing in energy-efficient equipment often has high upfront costs that may strain the budgets of smaller businesses.

Halim said small businesses like his "don't have the resources or influence to achieve net zero alone."

He believes stronger government support is needed through rebates, incentives and sustainability grants to ensure small businesses can be part of the transition.

Greening small-businesses becomes less taxing

As it turns out, there are actually lots of opportunities to green up Aussie businesses – you just have to know where to look.

A/Prof of Accounting at Monash University, Mukesh Garg, explained "there are at least 40 different types of cash grants in Australia and plenty of tax incentives to help small businesses become more sustainable."

Investments made in sustainable practices and equipment can be claimed at the end of the financial year, lowering income tax and freeing up extra funds to maintain business operations.

While there is almost always an upfront cost, Garg believes it is a worthwhile long-term investment.

For instance, equipment like solar panels and batteries often recoup their costs within five years.

"I've found that more often than not, both investors and customers are quite happy with these types of changes as they feel better about their choices," Garg added.

However, Halim found that the diversity of organisations and government departments offering incentives means it is time consuming and challenging to find appropriate grants and schemes.

"There is no single avenue to find all this information and the value isn't always made clear to us," he said.

"The process needs to be simpler."

A national repository of all available grants and schemes could see many more small businesses incorporating sustainable practices into daily operations and long term plans.

Looking forward

While it might be too late to give your business a clean, green makeover this financial year, it's always wise to start planning for the year ahead.

Garg emphasises the importance of goal setting and mindset to ensure small businesses are preparing effectively.

"Goals should be realistic, effective and achievable."

And as part of this, a commitment should be made at the start of each financial year, budgeting for sustainable assets and making the most of tax benefits such as accelerated depreciation.

"Ultimately, business owners must first make the decision to transition and become more sustainable before any other step can be taken," said Garg.

By aligning financial decisions with environmental goals, small-businesses can reduce carbon footprints and promote a cleaner future, all while saving some cheddar.

Want more information on how your climate is changing? Check out the last article in this series.

Mandeep Singh is a Senior Project Officer at Monash CliComm.

This column is part of a collaboration between Monash University and News Corp to deliver hyperlocal weather and climate information.