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Putting a Price on Carbon: Who will Pay?

Putting a Price on Carbon: Who will Pay?. Financial Counselling Australia Conference 16 May 2012 Gerard Brody Director-Policy and Campaigns Consumer Action Law Centre. Overview. Carbon tax and compensation Misleading advertising Unequal burden of carbon tax

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Putting a Price on Carbon: Who will Pay?

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  1. Putting a Price on Carbon: Who will Pay? Financial Counselling Australia Conference 16 May 2012 Gerard Brody Director-Policy and Campaigns Consumer Action Law Centre

  2. Overview • Carbon tax and compensation • Misleading advertising • Unequal burden of carbon tax • What’s really driving energy prices? • How can advocates improve outcomes

  3. Impact of carbon tax on inflation

  4. Carbon tax and compensation

  5. Carbon tax and compensation • Couple with dependent children on moderate income ($81,640) • financial assistance of between $7.90 and $23.60 a week: more than offset the average cost impact for this household. • Couple with dependent children on low income ($44,800) • financial assistance of between $11.10 and $24.10 a week, equivalent to at least 30% more than the average cost impact. • Single parent with dependent children receiving the moderate income ($54,666) • financial assistance of between $8.80 and $10.60 a week which will cover the average cost impact for this household. • Single parent with dependent children receiving the low income ($36,359) • eligible for financial assistance of between $8.60 and $16.60 a week, equivalent to at least 38% more than the average cost impact for this household.

  6. Misleading cost of carbon tax

  7. Role of ACCC • Some examples that ACCC has its eye on: • ‘Beat the Carbon Tax – Buy Now!’ • ‘Our prices will be hit hard when the carbon price comes in’. • ‘Our prices have increased by X% because of the carbon price’

  8. Carbon tax on bills • Proposal from NSW & QLD govt to disclose carbon tax and cost of environmental initiatives on bills • Total Environment Centre claim this will necessarily mislead consumers • Suggest ACCC should regulate as to how any disclosure is undertaken, so as not to mislead

  9. Impact of carbon tax is complex! • How much you pay depends upon where you live • Different average energy consumption in different states • Carbon intensity of electricity consumption • Electricity only versus dual fuel • Would’ve been more equitable to apply compensation to kWh/bills (i.e. concessions)

  10. Then what is driving up prices? • Network costs • Rule change proposal from Australian Energy Regulator • Ability of network companies to appeal regulatory decisions • Lack of effective competition in retail and wholesale markets • Power of 3 mega retailers • Vertical integration

  11. What can we do? • Financial counsellors and consumer advocates have powerful stories to tell about impact of rising bills • Only with publicity of these impacts will there be the political will to reform the market to address some of these issues

  12. Questions?

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