Many Australian businesses, particularly those outside the resources sector, are suffering from revenue and profit squeeze due to increasing cost of energy, expected to worsen with the imposition of the carbon tax on July 1 and huge investments in energy networks.

The report titled, Energy Shock: Pressure Mounts for Efficiency Action, was released on Monday by the Australian Industry Group (AIG). It intensified the significance of energy costs, AIG pointed out.

The survey of over 300 Australian companies said that unless there is a closer consultation with businesses, many government policies run the risk of being irrelevant which would likely cause low participation rate even if the policy was well designed.

However, in the case of the Gillard government's energy efficiency policy, the survey said 74 per cent of the respondents were interested in government programmes that would provide partial funding for efficiency investments. Of the remaining 26 per cent uninterested, most of them said the policy was irrelevant.

The finding is relevant since the government is set to launch a $1-billion Clean Technology Programme that targets manufacturers.

Their interest was spurred by a desire to lower their power bills which are expected to go up partly due to costs imposed by the government such as the carbon tax. As a result, even without the assistance, more enterprises are spending money to improve their energy efficiency.

The interest in energy efficiency is seen by the two-thirds of Australian businesses achieving improved efficiency performance in the last three years to 2012 compared to a similar two-thirds of local enterprises making none or negligible improvements in energy efficiency in the five years to 2010, according to AIG Chief Executive Innes Willox.

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