Cost-of-living impact?
The carbon price will be imposed on around 500 of Australia's biggest emitters. They are expected to pass some of the cost on to consumers, by raising the prices of their goods and services. For example, steel may become a bit more expensive. For most households, this won't have a big impact. If you keep on buying things and using services in the same way as you always have, the impact will be something like this:
- Average cost of living increase of a mere $9.90 per week per household. This is partly as a result of an expected 0.7 percent increase in the Consumer Price Index, which tracks the cost of consumer goods like groceries. For example, take a look at the ABC's simple graphic showing the expected impact on common household food items.
- Average household assistance from the government (in the form of tax cuts and welfare payments) of $10.10 per week per household. Low income households get the most assistance, and higher income households get less. The highest income households get no assistance.
Alternatively, instead of continuing the same way you always have, you can change what you buy and use. If you choose goods and services produced by companies that are more sustainable, and improve the energy efficiency of your home, the impact will be less.
MEFL has been working hard for over ten years to work out ways for households to become more sustainable. Households in Moreland have access to our free advice and energy saving programs, and are well-placed to make changes around the home and save energy costs. Sasha, one of our Zero Carbon Moreland members managed to cut her energy use in half in just one year!
Warning!
Remember, the cost of living in Australia is already going up for other reasons that have nothing to do with the carbon tax, and this will continue. In comparison, the impact of the carbon tax will be almost unnoticeable. One of the main reasons that the cost of living is increasing is due to rising electricity prices. This is mostly caused by massive investment in electricity infrastructure (poles and wires) which are needed to cope with a huge increase in the numbers of energy hungry air conditioners that people are installing and all using at the same time on very hot days. For more information on what's driving up electricity prices, check out The Climate Institute's excellent analysis.
Household 'assistance'
For some households, particularly those who are already struggling, the impact of the carbon price will be significant. The Government has said it will help households with the costs Assistance delivered in a variety of ways:
- Tax free threshold: Increase in the tax free threshold from $6,000 to $18,200 next financial year, and $19,400 in 2015. In effect, this will mean that starting in the 2012-13 financial year, people earning up to $20,542 will not have to pay any income tax.
- Pension increases: A lump sum (basically a direct upfront payment) to cover the first year of the scheme, then a 1.7% increase in the pension.
- Increases in the Family Tax Benefits: A lump sum to cover the first year of the scheme, then an increase in payments.
- Seniors health card holders: A lump sum payment to cover first year of scheme, then an increase by 1.7% of the maximum pension payment.
- Additional payments for low income households: Low income households will eligible for up to $300 additional payment if they can show that tax cuts and payment increases does not cover their increase in costs. This will be important because welfare organisations have warned that the proposed assistance will not be adequate for some families.
- Medical needs: People with essential medical heating or cooling needs, such as those living with multiple sclerosis, will eligible for up to $140 per year.
There will also be an opt in program where household assistance payments can be used to improve energy efficiency through non-government organisations, which we encourage everyone to consider. Energy efficiency will help cut your bills in the long term. Once your bills go down, you can just pocket the ongoing 'assistance' from the Government!
Voluntary action
Many of our members will be relieved to discover that the Government has said it will put in place measures to ensure that voluntary action by concerned community members to reduce their own emissions will not simply make things easier for the biggest 500 emitters who pay the carbon price.
This will be done by taking into account voluntary actions when setting emissions caps under the scheme (after it becomes a capped fully flexible emissions trading scheme). You will also be able to buy and cancel emissions permits, which effectively strengthens our emissions cap. Green Power purchases will be additional, and will be taken into account when setting caps.
What can you do now?
There are two things you can do now.
Firstly, you can read more about the carbon price on our blog, and at the Government's 'Clean Energy Future' website. The Government will be sending brochures to households explaining the impact of the carbon price, and you can view them online here.
Secondly, you can start thinking about how to respond to the price on carbon. Although you won't be paying the price directly, you may be affected if the goods and services you buy increase in cost. You can avoid this by changing the way you consume. Saving energy is one of the best ways to reduce the impact, and MEFL has years of experience working with households and businesses to cut energy consumption, reduce emissions and save on bills. Browsing our Sustainability Advice webpage, and joining our Zero Carbon Moreland program are the best places to start.
If you're already a MEFL member or participate in one of our programs, get in touch with one of our sustainability advice specialists and ask us how else you can save energy under the carbon price.
