So are we front-runners in reducing our carbon footprint, or loser because of the costs involved?
The questions on everyone's lips are what will the tax mean? What will it cost? And who will pay the most?
This Sunday the Federal Government will start charging big companies for their pollution; but, as with most things, the costs will be passed along to all of us.More stories from Today Tonight
So, how will it affect you? What can you expect to pay more for and how can you cut back the amount of carbon tax you pay?
According to finance guru David Koch “this is the highest carbon tax price in the world.”
The carbon tax is the price per tonne of carbon pollution that will be paid by 250 companies (though that will likely quickly rise to about 330 companies). Most are power companies and mining companies.
Those companies will have to buy a permit for the greenhouse gases they send into the atmosphere. They'll have to pay $23 per tonne of carbon pollution they emit.
This coming financial year that will add up to $4 billion worth of revenue for the government.
The idea is simple: If you want people to stop doing something, charge them for it.
“Over the first three months you'll certainly notice it,” Koch said, adding that he understands the reasoning behind this tax but saying its timing is terrible.
“My view is, whether you believe in the tax or not, is beside the point. I think the timing is wrong, and the price is wrong,” Koch said.
“We've got a global economy on the edge at the moment. We've got Europe basically bankrupt. We've got China slowing down. Forget the commodities boom if China isn't buying our commodities.”
Economics professor at the University of Melbourne, John Freebairn, says the carbon tax will change our lives.
“Well, like the GST, businesses actually pay the tax, but for businesses it’s just an increase in costs, like an increase in wages or materials, they pass that on," Professor Freebairn said.
“Again if we think of households, the person who insists on wearing summer gear at home with the air-con set up at 25 degrees, and is not going to change his or her behaviour, that bill’s going to go up a fair bit,” he explained.
“The overall package, if you look at our mix of electricity, gas, food, clothing, entertainment - they estimate the average cost will go up by 0.7 per cent. That’s less than one per cent.”
Small business owner on Queensland's Sunshine Coast, Matt Smith says “we knew it was coming and there’s been lots of rumours and innuendos about what's actually going on.”
His concern is that “small business in this country is struggling as it is. We need all the help we can get and at the moment we're not getting much.”
Power is the big one. Electricity bills will go up next year by nearly ten per cent, just because of the carbon tax, and overall they'll rise by up to twenty per cent plus in some states because the power companies are charging us like us never before.
As for everyday things, expect to pay about two cents more for bread and milk; eleven cents extra for a leg of lamb and about fourteen cents more for a week's worth of fruit and vegetables. As for all the other things we buy and pay for - that's what has got everyone worried.
Koch sees consumers asking questions like this:“do I purchase a high energy usage Australian product, whose costs have gone up, or do I purchase a high energy produced good that's produced overseas with a much lower carbon tax?”
Over the course of the year the carbon tax is estimated to slug us all an extra $653.
Many of us will get compensation of $679 - that's where the $4 billion the Government will get from the polluters comes in. Families earning up to $150,000, that's about six out of ten families, will get compensated through welfare payments and tax breaks.
So most, in theory, should end up at the end of the year ahead $26. But is that true?
Smith fears the carbon tax could wipe him out. His Coolum Farm Fresh Market is being hit with a 22 per cent increase in electricity costs.
“An extra thousand dollars a quarter during winter, probably $1500 during summer,” Smith said.
“Part of it is there is no information. My transport company has no information on what he will pay; the farmers who supply me, who have to run cold rooms and pumps to irrigate their land, they're worried about what costs they have.”
Refrigerants are one such unknown. They cool our supermarket fridges and run through cold rooms and cold transports. The price of these gases will quadruple - rising from $92 per unit to $377.
Ted Whittingham is the manager of the Glasdstone fish markets and fears the price of keeping his produce cold is about to skyrocket.
“Yes I was just absolutely astounded. This is a gas that we’ve been pushed onto for the last decade as an environmentally friendly gas, and here we go it’s going up by 750 per cent,” he said.
“The biggest thing people can do is understand that thy whole motivation behind the carbon tax is to stop pollution, to stop energy wastage,” Koch said.
Cutting back on hot water and home insulation are two of the biggest ways to save.
“You can do your own audit, on your own household. Think whether you do need the thermostat up at 21, 22 degrees, when you've got central heating, or can you turn it down to 19 degrees,” Koch advised.
Another major concern is carbon scams.
“We've had a couple of hundred complaints so far that we’ve looked in in total,” Australian Competition and Consumer Commission (ACCC) Deputy Chairman Michael Schaper said.
Schaper says scammers have already been busy phoning people at home claiming to need information to pay them their carbon tax compensation.
“The Australian Government doesn’t contact businesses out of the blue and ask for their bank account details. We have issued a number of warning to businesses to say be careful about the potential for scammers to try and move in as well,” Schaper said.
You might receive a call from a scammer claiming to be from the Federal Government or a Government Department. They will ask for your bank account details so they can pay you your compensation, most commonly $5000, and may even ask for your passwords. Others claim to be running a survey.
If you suspect you're being scammed or you think a business is trying to falsely blame the carbon tax for price increases - report them to the ACCC.
“The most extreme example a court can award penalties of up to $1.1 million,” Schaper said.
Remember, the point of the carbon tax is to reduce pollution and whatever effects that has on the environment. So after all this effort, all the money and all the talk what will the carbon tax actually achieve?
“Almost nothing happens because Australia only puts out about 1.4 per cent of the world's greenhouse gas pollution,” Professor Freebairn said.
“I don't think it's doing anyone a favour,” Koch concluded.Tips to reduce your carbon tax
- Conserve energy: Insulate your home properly to keep it draft-free. Drafts make your HVAC systems work harder to restore lost heat. Check your home for holes and gaps in walls, floors, windows, doors, and anywhere where it is possible for a draft to seep in. Seal or close the gaps as needed.
- Save on electricity: Check your home appliances that use electricity even when they aren’t in use, and plug them off. Buy only quality appliances that are power-efficient. If you can hang your clothes outside to dry instead of using the electric dryer, then so much the better for your low-carbon lifestyle and the lesser carbon tax you will incur. Use energy-saving or solar-powered lights.
- Watch your water consumption: The use of water has associated carbon emissions because its sourcing, storage, treatment and distribution have carbon costs. Therefore, saving on water can reduce your carbon tax further. While baths are luxurious, a shower takes less time, water and energy. Regularly check and fix any leaks in faucets, toilets, showers and baths.
- Curb the carbon in your food: Buy your food from local sources, to reduce carbon associated with transporting food from long distances. Since livestock and poultry production costs more carbon than vegetable production, put less meat and more vegetables in your diet.
- Reduce your fuel costs: Walk, instead of drive, as often as possible. Ride a bike for farther destinations. If driving a car is an absolute necessity, keep the car in good condition to make it more fuel-efficient. When driving, maintain the most fuel-efficient speed, which is often around 55-65mph. If you’re caught in an unmoving traffic jam, cut the engine to save fuel. Open your windows to let in fresh air, instead of using the car air conditioning.
- Kochie's Business Builders - www.yahoo7.com.au/smallbusiness
- ACCC Carbon Price Claims - www.accc.gov.au
- Tribal Energies - www.tribalenergies.com.au
This reporter is on Twitter at @BryanSeymour7
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