REPEAL OF THE CARBON TAX – IMPACTS ON HOUSEHOLDS AND BUSINESSES
The repeal of the carbon tax will directly benefit households and businesses by placing downward
pressure on prices, particularly electricity and gas prices.
How did the carbon tax impact households and businesses?

Approximately 75,000 businesses directly paid the carbon tax or paid an equivalent carbon
tax through changes to duties and rebates, such as an increase in aviation fuel duty.

Companies that were subject to the carbon tax typically will have passed on part or all of
this cost to their customers, smaller businesses and households, which experienced higher
prices as a result of the tax.

The introduction of the carbon tax from 1 July 2012 (at $23 per tonne in 2012-13) was
estimated by the Treasury to have increased the cost of living of households by around
$9.90 per week on average, and increased the Consumer Price Index by 0.7 per cent.
How will households and business benefit from the repeal of the carbon tax?

Treasury has estimated that household costs should on average be about $550 lower in
2014-15 than they would be with the carbon tax.
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On average, household electricity bills are estimated to be $200 lower and household
gas bills $70 lower than they would be with a carbon tax in 2014-15.
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For many businesses the carbon tax accounts for a larger proportion of their final
electricity bills. The repeal of the carbon tax could be expected to have an even greater
overall reduction in electricity costs.

It is estimated that ending the carbon tax will reduce the Consumer Price Index by about
0.7 percentage points in 2014-15, based on the carbon tax of $25.40.

Removing the carbon tax eliminates an administrative and compliance burden on
business, which is estimated to cost $85 million per year.
How will the Government ensure price reductions flow through to consumers?

The Government is committed to ensuring that consumers benefit immediately from the
removal of the carbon tax.

The Australian Competition and Consumer Commission (ACCC) is monitoring prices,
costs, and profits across key sectors of the economy, particularly in the electricity, gas and
synthetic greenhouse gas sectors.

The ACCC has new powers to ensure that households and businesses benefit from lower
prices following the repeal of the carbon tax.
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This includes the power to enforce new prohibitions on carbon tax-specific price
exploitation and false or misleading representations about the effect of the carbon tax
repeal on prices.

There is also now a requirement for companies supplying electricity, natural gas and
synthetic greenhouse gases to pass on all cost savings associated with repeal of the
carbon tax.
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Suppliers of electricity and natural gas as well as bulk synthetic greenhouse gas
importers can be penalised 250 per cent of any cost savings from the carbon tax
repeal that they do not pass on to customers.
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Electricity and natural gas retailers, electricity producers selling into wholesale
electricity markets to retailers as well as bulk synthetic greenhouse gas importers will
be required to substantiate their cost savings to the ACCC.

In addition, electricity and natural gas retailers are required to inform customers about the
cost savings that they are passing on.

Entities that contravene the new prohibitions on carbon-specific price exploitation or false
or misleading representations about the effect of the carbon tax repeal on prices can be
subject to penalties of around $1.1 million for corporations and $220,000 for individuals.

Penalties of up to $1.1 million for corporations and $220,000 for individuals will apply for
contraventions of the new provisions.
Will the existing household assistance measures be retained?

The Government will retain household assistance measures including existing income tax
cuts and increases to pensions, allowances and family payments which have already been
delivered.
Will business be compensated for adverse impacts of the carbon tax repeal?

Carbon tax related industry assistance measures are no longer required now that the
carbon tax has been repealed.

The Government will not provide compensation or transitional financial assistance relating
to the repeal of the carbon tax.

Businesses’ particular commercial arrangements are a matter for them, and the
Government has provided a long period of notice of its intention to repeal the carbon tax.
More Information

The Treasury – modelling a carbon price
http://carbonpricemodelling.treasury.gov.au/content/report.asp

ACCC – carbon tax repeal
www.accc.gov.au/business/carbon-tax-repeal

ACCC – carbon price claims
www.accc.gov.au/consumers/prices-receipts/carbon-tax-repeal-for-consumers
Disclaimer
While reasonable efforts have been made to ensure that the contents of this publication are factually correct,
the Commonwealth does not accept responsibility for the accuracy or completeness of the contents, and
shall not be liable for any loss or damage that may be occasioned directly or indirectly through the use of, or
reliance on, the contents of this publication.
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