GOVERNMENT policies to encourage business investment in energy efficiency risk irrelevance and could fail to reach much of their potential market, new research has suggested.
The report by the Australian Industry Group found that businesses were coming under increasing strain because of rising energy costs and that this is set to continue because of carbon pricing and “enormous” investment in energy networks.
More businesses have higher energy spending, the report “Energy Shock: Pressure Mounts for Efficiency Action” found.
“Challenging conditions for many non-resource businesses are likely squeezing revenue and profit margins, further intensifying the significance of energy costs,” it said.
“This trend can be expected to continue in light of both carbon and other looming pressures on energy prices, including rising network cost.”
The survey found that without closer consultation with business, many of the policies “risk being seen as irrelevant” and that “if business does not see a policy as worthwhile, they will not participate and the policy cannot succeed at significant scale, no matter how well designed”.
Of the more than 300 businesses surveyed that would access government information about energy efficiency, 74 per cent were interested in government programs that provided partial funding for efficiency investments. Those not interested mostly cited irrelevance.
Businesses in Western Australia were significantly less interested in such assistance.
This is significant as the government is rolling out a $1 billion Clean Technology Program aimed at manufacturers.
The findings could reignite the debate about industry assistance, with Productivity Commission chairman Gary Banks last month warning that another round of industry assistance would not spare jobs.
While Labor has promised assistance for the struggling manufacturing sector, the Coalition has been demanding more scrutiny of the way federal funding is spent.
