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Carbon tax costs ACT families $540 a year

The carbon tax is hitting the ACT harder than anywhere else in the nation, costing a typical family in Canberra almost 80 per cent more than one in South Australia, or about $540 a year, new research shows.

But principal researcher at the University of Canberra’s National Centre for Social and Economic Modelling, Ben Phillips, also found the average Australian would end up with an even greater benefit than predicted by the Federal Government, because the carbon tax would add less to costs than previously thought but benefits will not go down.

From the beginning of this month, about 400 of Australia’s biggest polluters have to pay $23 for each tonne of carbon they emit.

These costs are expected to be passed on to consumers, especially through rising power bills, although the Government has also provided benefits and tax cuts that it says will more than cover the price rises for the vast majority of Australians.

Mr Phillips said the ACT’s high average incomes meant it was not surprising that Canberrans faced the highest impact from the tax. This was partly because the territory had one of the larger increases in power prices related to the tax.

‘‘Probably the biggest driver is that the ACT is quite affluent. When you have higher incomes, you spend more money, so when you are spending more money it is fairly obvious that your carbon impact just has to be higher,’’ he said.


‘‘Half of the impact is electricity, gas and water, the other half is just everything else you buy, ... so the more you spend, the bigger your impact.’’

His modelling finds that the ACT and Northern Territory, which are combined, have the highest median impact, at $9.71 a week and South Australia the lowest at $5.79. Victoria is hit by a median $8.46 a week rise, NSW by $7.78, Western Australia by $7.58, Queensland at $7.57 and Tasmania by $6.51.

Mr Phillips said that although it was hard to disentangle the two territories, his best estimate for the ACT was about $10.36. This equates to $538.72 a year, not including any new benefits.

His modelling also found the average Australian would receive a slightly higher net benefit from the changes – which include a series of tax cuts and boosted payments – than the Government initially believed.

Australians are getting an average $10.10 in benefits, according to Treasury, and Mr Phillips said his modelling found an average person would pay $8.82 a week more, rather than the $9.90 estimated by Treasury last year. This gave a $1.28 a week – or $66.56 a year - benefit.

He said lower and middle income families (those in the bottom 25 per cent and middle 50 per cent of incomes respectively) would receive the greatest benefits, at an average $3.58 and $3.45 a week, but higher income earners (in the top 25 per cent of incomes) would be worse off by $4.29.

The modelling also shows that families with children will face the largest average increases, of $12.17 a week, compared with $8.41 for couples with no children, $5.09 for singles and $10.01 for other households, such as group homes or those with more than one generation living there.

Wage and salary earners, at an average $10.06 a week, would pay more than those earning other sources of income, followed by the self-employed at $9.86 and people on government benefits at $5.60.