Page 2216 - Week 07 - Thursday, 7 August 2014
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through the mechanism of the clean energy supplement that was paid to those on government payments, such as single parents, pensioners, veterans, students and the unemployed. There were also changes to the tax-free threshold that meant that households were provided with tax cuts across the board. When the changes were announced, the tax cuts were expected to result in lower taxes of $300 for incomes up to $68,000.
When ActewAGL announced the changes to electricity and gas prices yesterday, they calculated there would be a $222 annual decrease on electricity and a $98 annual decrease on gas. That is calculated on an average Canberra bill. In total, that is $320 a year. But the previous tax cuts were already about $300 a year. This is starting to put the real cost in perspective. And that is before the clean energy supplement even kicked in.
The current Liberal Prime Minister has indicated to Australians that they will make a saving of about $550 a year on the repeal of the carbon tax. That figure really is a mirage. Firstly, even in the ACT, where average electricity bills are probably a bit higher than in many places, the savings are not $550. The savings are not $550, and yesterday’s announcements made that clear.
Secondly, Mr Abbott was including a whole bunch of stuff where the costs were never passed on in the first place—things such as air travel, clothing costs and rental accommodation. There was a convenient use of the figures to make the whole story suit his argument a bit more, but those costs were never actually passed on.
The one good thing that will come out of Clive Palmer’s amendments to the carbon tax repeal is that we will be able to see what the actual household savings will be. But that is where the irony is. While Tony Abbott has not been keen to talk about compensation to householders much at all—God forbid he would want to remind people that the entire scheme was designed to be cost neutral so that it would not have an impact on households—he wants to continue the compensation payments to households for two more years, in spite of ripping up the carbon price. Low and middle income households will end up not just being compensated but better off. That little luxury will cost the federal government—of course, that means the Australian taxpayers—half a billion dollars over two years.
Where does that money come from? It comes out of funding for health, education or public transport, possibly. There are myriad services that the federal government has sought to cut in the last federal budget. There are myriad new cost pressures they have put on, including a Medicare co-payment, ostensibly to save money. Yet they want to keep this handout to people for a carbon tax that they have now repealed.
Mr Hanson’s doom and gloom scenarios for householders under a carbon tax are the local version of the doom and gloom scenarios that his federal colleagues and candidates at the election last year were also painting. They were talking about a “toxic tax” that would “act as a wrecking ball across the economy”—they were the phrases we heard during the election campaign—with economic consequences that would be “absolutely catastrophic”.
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