How will the carbon tax affect you?

The average household is expected to face an extra $9.90 in weekly living costs as a result of the carbon tax, but you can ease the financial impact in several ways... 

 

With all the political mud-flinging that has surrounded Gillard’s controversial carbon tax, it’s easy to lose sight of how the new legislation – coming into effect on the 1 July – will impact everyday Australians. YMM investigates how much the tax will cost you, and how much you can save. 

 

What is a carbon tax?

 

The carbon tax seeks to reflect the negative environmental impacts of goods and services by taxing the CO2 emissions of polluting corporations. It means some household goods and services will become more expensive, as the big polluters pass on their higher costs to consumers. Qantas was one of the first companies to announce a carbon tax price hike, increasing airfares by up to $13 a ticket, and Virgin Blue recently followed suit by announcing a $10 domestic airfare increase. Only time will tell how other companies will respond, but most economists are predicting across-the-board price increases in carbon-intensive industries.  

 

What will the carbon tax cost my household?

 

Treasury has said the average Australian family will see a $9.90 increase in household expenditure once the carbon tax is introduced. This amount includes an estimated increase of $3.30 in electricity costs, $1.50 in gas bills, and 80 cents in food bills per week.   

 

Following are four other scenarios and the approximate annual cost of the carbon tax as calculated by the calculator on the Federal government's Clean Energy Future website.

 

Scenario	Approximate cost	Approximate assistance
• Single, no dependent children • Income $80,000  • Not pension-age	$441 per year	$16 per year (tax changes)
• Couple with two dependent children (5-7 years old and 8-12 years old) • Neither person is pension-age • Combined income $120,000	$696 per year	$306 per year (tax changes)
• Single parent, one dependent child (5-7 years old) • Not pension-age • Income $65,000	$416 per year	$391 per year ($88 through government handouts, $303 through tax changes)
• Couple, no dependent children • Both pension-age • Combined income $75,000	$457 per year	$650 per year ($510 through government handouts, $140 through tax changes)