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The good news is that without the carbon tax you won’t be paying $100 for a Sunday roast.
Greens slam Tony Abbott's carbon tax 'lie'
Tony Abbott campaigned on a lie about the impact of the carbon tax, says Greens Environment Spokesperson Larissa Waters.
But you never did.
Before the carbon tax in 2009 the present Minister for Agriculture Barnaby Joyce said the carbon tax would be “the end of Australia’s sheep industry”.
‘‘I don’t think your working mothers are going to be very happy when they are paying over $100 for a roast,’’ he added.
In Parliament this week, asked whether he had found a $100 leg of lamb, Mr Joyce dodged the question. At Woolworths this week a leg of lamb was on special for $15.10. It normally sells for $20.38.
As it happened the Treasury modelled the price of lamb when it modelled the carbon tax. It said the price would rise by 0.4 per cent, suggesting the price might have climbed 20 cents.
It’s impossible to tell because, for food, the expected movements were difficult to notice.
In the first consumer price figures released three months after the carbon tax, the Bureau of Statistics says the price of lamb fell – sliding 2.3 per cent. It has since fallen a further 10 per cent, making any movement of 0.4 per cent difficult to discern.
This isn’t to say that lamb isn’t slightly more expensive than it would have been had there not been a carbon tax, rather that the effect is impossible to measure.
'We are a conservationist government ': Abbott
The Prime Minister welcomes the repeal of the carbon tax, but doesn't rule out ever introducing a carbon pricing mechanism in the future.
The Australian Competition and Consumer Commission had some power to restrain price rises attributed to the introduction of the tax. It could take action against false, misleading or deceptive claims linking price increases to the tax.
It has no such power over most prices on the way down. It can merely monitor.
Will the price of a leg of lamb come down by 20¢ because of the removal of the carbon tax? So long as the retailer doesn’t make any claims about the carbon tax it can charge whatever it likes. Last-minute amendments to Clive Palmer’s carbon tax amendments make sure of that.
Insisted on by Liberal Democrat senator David Leyonhjelm and Family First senator Bob Day, they restrict penalties to just major energy suppliers.
‘‘They are big enough and ugly enough to look after themselves,’’ Senator Day said.
But the Treasury expected the electricity and gas component of the carbon tax impost to add just add just $4.80 per week to a typical household budget ($3.30 for electricity, $1.50 for gas).
Total costs would climb $9.90 per week. Although big, the electricity and gas component didn’t account for the bulk of the $9.90. What did account for it was a multitude of small price changes. The Treasury counted around 80, many of 0.4 per cent.
If the bulk of the price burden was made of adjustments too small to notice on the way up it will be impossible to notice on the way down. Whether or not retailers pass on lower costs will be up to them, and most of their customers will be none the wiser.
Electricity prices should come down by about 10 per cent, gas prices will be about 9 per cent lower than they would have been, except that the price of gas is unlikely to come down at all. Last week the NSW Independent Pricing and Regulatory Tribunal approved gas price rises of between 14.6 and 18.1 per cent.
A new processing complex at Gladstone in Queensland will allow eastern Australian gas to be sold at world prices for the first time. Eventually our gas price could double.
The Prime Minister says the saving per household from axing the tax is likely to be $550 per year. It’s more likely to be $250 or less, mostly on electricity.
And don’t expect cheaper petrol. Petrol and the fuel used to produce and move it was carbon tax exempt.
Peter Martin is economics editor of The Age