Page 1745 - Week 05 - Tuesday, 1 May 2012
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revenue raised from polluters will go to households to meet price impacts. The federal government’s package supports those on low incomes by more than the price on carbon is expected to cost them. The commonwealth estimates that the carbon price will increase the national average household weekly costs by $9.90. Under the commonwealth’s compensation package, on average households can expect to receive assistance of $10.10 per week. Nationally, nine out of 10 households will receive compensation, with around two-thirds being fully compensated.
Because of our higher incomes, the ACT is expected to have a lower share of households who receive compensation. The territory’s higher incomes and our greater ability to support measures to address climate change I think are reflected in that distributional analysis. Nearly eight out of 10 households in the ACT will receive compensation, with around six being fully compensated—six out of 10, that is. The ACT of course has the highest disposable average incomes in the country, but we are also, per capita, the highest emitters due to this high income. Over time we would expect that households would exercise choice in consuming less carbon intensive products and services.
Small businesses in the territory will benefit from an extension of the small business instant asset write-off from $5,000 to $6,500. The federal package also includes measures and initiatives to support high emissions industries to become more efficient or to transform. The ACT economy of course does not have high emission intensive industries and as such we would expect less impact on the local economy.
The ACT government has taken action in relation to utilities costs. In July last year the government increased the utilities concession by $131 a year to $346 per year. The concession is increased by the consumer price index each year. The government will continue to identify those in genuine hardship and consider further options to assist them. For example, the ACT government’s energy efficiency scheme will assist approximately 70,000 households in the territory. This scheme will require electricity retailers like ActewAGL to provide services to households to improve their home energy efficiency. At least 25 per cent of those assisted will be low income households, so we are providing additional support to the most vulnerable in our community. There will be a net benefit to the ACT economy of $40 million as electricity savings will significantly offset the cost of the scheme.
With any significant micro-economic reform there will be effects on economic performance. Commonwealth Treasury modelling has indicated that the carbon price will reduce the national GDP by 0.3 per cent by 2020. The carbon price will slow ongoing annual growth of gross national income by 0.1 per cent from an annual growth of 1.1 per cent to one per cent by 2020. The commonwealth’s media update indicated that the carbon price will reduce real GDP and employment growth by less than one-quarter of a percentage point in the 2013 fiscal year. It is expected to have no discernable impact on forecast unemployment.
So in line with the national results the carbon price is not expected to have a material impact on the economic outlook in the ACT. Over time, commonwealth Treasury modelling indicates that the carbon price is expected to shift economic activity away from emission intensive industries and there will be long-term benefits to Australia, and most particularly to a jurisdiction like the ACT, from undertaking this shift.
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