We have seen revolutions in industry since the dawn of time. In recent years with, following technological advancements and the advent of the Internet, companies like Apple and Microsoft made a market of their own replacing existing companies with brand new ones to distribute their revolutionary products. Billions of dollars have been invested in industries all over the world and now we are at the dawn of a new revolution: the energy race. As opposed to the industrial revolution, the focus is no longer on being able to produce and use energy but rather to be able to generate and store large sums of efficient renewable energy without running up large costs. When compared to power harnessed by coal powered plants, renewable energy production has very few ongoing costs. In New York, it is predicted that replacing 8 Gigawatts of coal produced energy with solar or hydroelectric power could save $1.3 billion in operational costs a year, which would help pay off the original investment. Similarly if Australia invests in providing remote areas with solar panels and batteries, they can be self-sufficient and help remove 51% of the cost of power. This may not seem possible given the coalition’s slashing of the renewable energy fund in an attempt to balance the budget. If the present government is not willing to invest into such a booming industry then an easy alternative exists to allow Australian Citizens to make a change. To help this energy revolution I propose a Research and Development tax incentive plan, similar to that established by Labor in October 2011.
My first step would be to implement a tax free incentive investment plan, where people are allowed to invest, tax free, on any sized renewable energy company in the form of shares. An incentive would be provided in allowing investors to drop down a tax bracket, invest a small amount of money and in turn help the environment and the Australian economy. This process can be shown by way of example. If an investor earns $85000 a year they are taxed at 28%. To lower their tax bracket they may invest $5000 on a renewable company, changing their tax payment to 25%. The difference in tax is $120, which means the person will invest $5000 and only have to pay for $120 of it. It is like marketing with a pool floaty or training wheels; nothing can really go wrong. Even after the money is spent, the investor is still, in part, in possession of it. This is because the renewable sector manages to be quite a progressive industry, generating profit and thereby remunerating its investors. Only the government, loses out in this equation- its taxation revenue may in part be compromised. However this is not a large issue because there will no longer be a need for government investment in sustainable energy, regular Australians will keep it alive and well.
The next part of my two-step plan is to give every Tax Free Incentive Investor (TFII) a list of companies that they are able to invest in. This list will be ranked based on how trustworthy and established the company is, along with other categories. Companies would financially bid for high places on this list and bidding money would go to the government and help it cope with lowered tax revenue. To make sure that no companies with sinister incentives, like firepower, buy their way through the bidding process, companies will be background checked to estimate their financial and environmental value. This list of companies makes the investing process easier, safer, more reliable and profitable for the government. This would help boost Australia in its eventual goal to lead the world energy race and assume its place amongst environmentally progressive nations.