Enter the Carbon Tax (Year in Review)

November 29, 2012, 2:11 pmYahoo!7

The government’s hotly debated carbon tax comes to life today and it’s time understand what it’s going to cost you.


What is the carbon tax again?

Put simply, the carbon tax is a tax on pollution. Or more precisely it’s a tax on energy sources that emit carbon dioxide.

It’s an attempt by the government to make polluting more costly for large organisations. The hope is that these large polluters will invest in clean energy alternatives to reduce the amount of carbon tax they pay and thus reducing the amount of pollution (carbon dioxide) Australia as a nation emits.

Who will be taxed?

The Clean Energy Regulator says 294 entities have now been identified as liable to pay the carbon price.

The list includes large companies like Qantas, BHP, utility companies and a total of 34 local councils which have landfill sites or produce natural gas.

related reading: Companies hardest hit by the carbon tax

These organisations will be now pay $23 to the government for every tonne of carbon dioxide they emit into the atmosphere. After the first year, the tax is then designed to increase 2.5 per cent every year, for a further three years before converting into an emissions trading scheme.

How much will it cost you?

The opposition has made much of the fact the tax will force up the price of electricity, gas, food and other goods and services.

Estimates have average household expenditure rising by $9.90 a week including $3.30 on electricity, $1.50 on gas and less than $1 on food.

The truth is that it’s hard to predict what goods and services will be affected by how much.

What is clear however is that at least some of the companies targeted by the carbon tax will be looking to pass the resulting cost increases onto their customers. Switzer.com.au reports that airlines and utility companies will find it easier to pass on most of the cost increases from the carbon tax to their clients.

Compensation

Wayne Swan has recently said that around 98 per cent of Australian households will receive some assistance with the average pocketing around $10.10 a week in compensation.

So, based on the government estimates the average Australian household earning less than $150,000 a year will actually be better off after the introduction of the carbon tax by some 20 cents per week.

Whether or not Australians will actually be better off with a carbon tax remains to be seen. While we can be sure the politicians will keep banging on about it over the next year, there’s every chance that everyday working Australians have more important things to worry about.

related reading: End of the world this Sunday – and you won’t notice

related reading: David Koch - Carbon tax hard to stomach

related reading: David Talyor - Carbon tax: A positive step forward

This information was brought to you by

Savings Account Finder

  • Account type

Stock Quotes

e.g. BHP, CBA
COMPARE & SAVE