The Escalating Cost of the Carbon Tax

When Julia Gillard in July 2011 embraced a carbon tax, contrary to her pre-election position, an undertaking was given that pensioners and other low-income earners would be compensated for increases in their cost of living flowing from the decision. Grants of $190 to each pensioner has reassured the public that in due course the government would honour their undertaking.

Certainly there have been changes to the tax system, lifting the tax threshold from $6000 to $18,200, and changes to family payments and pensions.  Patrick O’Connor in an article posted on the World Socialist Web Site 11 July 2011 argues that “there is no mechanism to index welfare and tax compensation to any ensuing hike in energy costs”. On the other hand, he points out:

  •  coal mining giants will receive $1.3 billion,
  • steel producers $300 million,
  • coal-fired power stations $5.5 billion to 2017
  • whilst other energy intensive industries will enjoy exemptions from the carbon tax.

The renewable energy corporate sector is set to benefit from other aspects of the government’s package.

We have been expecting higher electricity charges, as the price for safe-guarding the environment, and in fact our power bills have been rising over the past year. To minimize our future costs, and to help reduce carbon pollution my wife and I decided to have six panels installed in May this year, even although it is unlikely that at our age we would re-coup our $3000 capital expenditure.

In spite of this, to our horror our most recent power bill covering the winter quarter, was $1441.35, up 62.9% from our last bill, and 43.76% higher than in the winter quarter last year. From last year our consumption increased 15%, whilst our provider’s charges escalated by 30%. The Commonwealth Government’s GST take increased from $90.63 to $134.68, on the larger bill, but we did get back $40 from the State Government. We thought the Commonwealth would be compensating us for our higher energy costs, not adding to them.

The sales pitch to us prior to the installation of solar panels was that we could expect a 30% reduction of our energy costs from our system. This has been a mis-representation thus far since our account showed that just 156kWh was returned to the grid for a solar bonus of $40. Furthermore our provider has declined to pass on discounts to their customers, and has threatened to withdraw from the further development of renewable energy programs. But our provider wasted no time in passing on the new rates for the high useage winter quarter, following passage of the carbon tax legislation.

Retirees spend most of their day at home, and need to be comfortable in winter as well as in summer. Is it too much to expect reasonableness  in the implementation of the carbon tax?

Categories: Community Issues

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