The Gillard Government’s has announced the details of the controversial carbon tax plan.   The tax is aimed at putting a price on pollution to encourage businesses to lessen their impact on the environment and climate change.

Carbon Tax FAQs for Australian Families
1. What is the carbon tax?
The carbon tax is a fixed price tax where the 500 businesses in Australia that release the most pollutants into the environment are taxed at a fixed price.

2. How much will the carbon tax be?
The carbon tax will start at $23 per tonne of carbon dioxide, however this cost will increase 2.5% each year for the 2 years after its’ introduction.  ($24.15 per tonne from 1 July 2013, $25.40 from 1 July 2014)

3. Who will pay the carbon tax?
Only the largest 500 businesses who emit the most carbon pollution will pay the tax directly.  However, those businesses will likely pass on the extra costs of the tax to all consumers.  The Australian Government estimates that the carbon tax will raise approximately $24.5 billion from 2012 to 2015.

4. What will happen to the extra money raised through the carbon tax?
Approximately $15.3 billion will be used to fund tax cuts to Australian households, household energy efficiency measures, and welfare benefits.  The remainder of the funds will be used for job support and to assist industry transition.

5. When will the carbon tax start?
The carbon tax will commence on 1 July 2012.

6. What about the Emissions Trading Scheme?
The Emissions Trading Scheme (ETS) is planned to be introduced from 1 July 2015.  It is different to the carbon tax.  The ETS is where the Government sets a limit on the amount of pollution that can be released each year.  Businesses who emit pollution will need to compete for permits, and clean energy producers can trade permits.

7. How will the carbon tax change the cost of living in Australia?
The Government estimates that prices will rise by 0.7% across the economy, with the average cost of living for Australian households increasing by $9.90 per week ($514.80 per year).  The Government’s tax cuts will provide compensation to most Australian households with 4 million being better off.

8.  What about the tax cuts?
Australians on low or middle incomes will receive tax cuts as well as incrases to pensions and welfare payments to compensate for the price rises associated with the introduction of the carbon tax.  From 1 July 2012, the tax free threshold will rise to $18,200, and $19,400 from 1 July 2015.  All taxpayers earning less than $80,000 p.a. will receive a tax cut from the introduction of the carbon tax on 1 July 2012.

9. How will the carbon tax reduce pollution?
The Government estimates that the carbon tax will cut around 159 million tonnes of pollution from the atmosphere by 2020.

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2 Responses to “Carbon Tax – How It Will Impact You”

  1. Sarah July 14, 2011 at 12:38 pm #

    Thanks for this great summary of the carbon tax. Saves me having to read through a heap of wordy stuff!

  2. Sunni Torgman July 17, 2011 at 6:25 pm #

    There is no answer to point 9?? The question is HOW is the tax going to offset carbon emmisions, and there is a government estimate where a real answer should be. The question remains unanswered; how is all this money going to reduce emmisions by 159 million tonnes??? Isn’t the entire tax based on the assumption that people/energy companies will have incentive to opt for cleaner energy. But if these energy corporations are getting billions of dollars in ‘help’ derived from the very tax that is suppossed to negate carbon emmisions doesn’t that undermine the entire proposal?!! I would whole-heartedly agree with the tax if EVERY CENT was spent on putting solar power on the rooves of every Aussie home(an invesment for all Aussies). Also it is important to note even people who live ‘green’ will also be paying the tax. Why not instead of charging everyone money, give rewards to people who are doing the right thing? Oh and any notion that our country will financially prosper by taxing itself is preposterous on so many levels. The wise Winston Churchill compared it to a man standing in a bucket trying to lift himself up by the handle!! By the way the earth has been significantly warmer than current temps. throughout different epochs and we survived just fine! This is not about the environment it’s about making more money make no mistake!!!