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
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Carbon tax and compensation
Misleading advertising
Unequal burden of carbon tax
What’s really driving energy prices?
How can advocates improve outcomes
Impact of carbon tax on inflation
Carbon tax and compensation
Carbon tax and compensation
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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.
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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.
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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.
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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.
Misleading cost of carbon tax
Role of ACCC
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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’
Carbon tax on bills
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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
Impact of carbon tax is complex!
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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
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Would’ve been more equitable to
apply compensation to kWh/bills (i.e.
concessions)
Then what is driving up prices?
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Network costs
 Rule change proposal from Australian
Energy Regulator
 Ability of network companies to appeal
regulatory decisions
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Lack of effective competition in retail
and wholesale markets
 Power of 3 mega retailers
 Vertical integration
What can we do?
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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
Questions?