United Voice

Australia generates more carbon pollution per person than any developed country.  It's clear that we need to do something about our carbon pollution - and soon.  So from next year, our most polluting companies will pay for each tonne for their carbon pollution.  

What's in the carbon price package?

From July 2012, the government will set the price of carbon pollution.  It will start at $23 per tonne, and rise by 2.5% each year.  In 2015, the market will set the amount.  Companies will also be able to buy ‘emissions reduction offsets' from overseas to reduce their emissions.  The scheme will cover about 60% of Australia's emissions; so some areas - like petrol and transport, forestry and agriculture - will not be included.  Overall, about 500 companies will be directly paying for their carbon pollution.  

Many companies will receive help to pay for the carbon price through grants to reduce energy use or free ‘pollution permits'.  Some industries - like steel, cement and aluminium - will receive more than 90% of their permits for free in the early years of the scheme.  

We know business will pass on the cost of the carbon price by some increases in the price of electricity, gas, food and other goods and services - this is why compensation to households is important.  

The Gillard government has promised at least 50% of the money raised from the carbon price will be spent to help households meet any increased costs.  

Some of the money from the carbon price will be spent to promote investment in renewable energy.  Without energy sources that are clean and healthy like solar and wind, we can't move away from our dependence on fossil fuels like coal and oil.  The majority of Australia's electricity is currently powered by burning coal, so it's a big challenge!  The government's announcement means more money for renewable energy.  It's a start, and we've still got a long way to go.

What are the costs and compensation for households?

Federal Treasury predicts the prices of electricity, gas and food will increase by about $9.90 a week when the carbon price begins. The Gillard government plans to meet these household costs through cutting income tax and increasing in welfare payments like the Family Tax Benefit and pensions.  The household assistance will be permanent and the government will review the adequacy of assistance each year.

Go here to calculate impact on your household.

Some of the features of the compensation for households are:

• Over four million households will be compensated by more than the expected average price impact.  
• Six million households will get assistance that covers the expected average price impact.
• Eight million households will get some assistance.
• The tax-free threshold will increase from $6,000 to $18,200 - which means everyone will take home more of their pay.  The threshold will be raised again in 2015 to $19,400. This is good news for casual and part time workers as well as those on low incomes, which includes many United Voice members.
• People on incomes under $80,000 will receive a tax cut in July 2012 and another in July 2015.
• There is additional support for 110,000 Australians who have high electricity bills because of medical equipment.
• Before the carbon price is introduced, people will receive lump-sum payment in advance to help with bills.  After this, pensions, allowances and family payments will increase by 1.7%.  
• Low-income households who need more assistance can apply for a $300 Low Income Supplement.
  
  

For most United Voice members it seems that changes to income tax and welfare payments will more than cover the predicted price impacts. We need to make sure compensation for households is reviewed every year and that companies aren't hiking prices beyond costs of the carbon price. 

What will happen next?

Over the next few months this proposal will be negotiated in parliament.  Big companies will spend millions on advertising and line up for handouts.

We need to make sure your voice is also heard. Previously United Voice members have said loudly that you are concerned about the future impacts of climate change.  You've also said that with rising costs it is getting harder to make ends meet.

This proposal from the government tries to address both issues - what do you think? Let us know your thoughts in the form below or email climatejustice@unitedvoice.org.au