Australian news, and some related international items

Carbon tax – in reality a small effect on prices, much less than when GST introduced

Carbon tax won’t hurt much but we don’t want to know, WA Today, Ross Gittins, June 27, 2012  “……Since the day he won the leadership of the opposition on the strength of his willingness to switch from supporting to opposing putting a price on carbon, Tony Abbott has been predicting the carbon tax would wreak devastation on the economy, wrecking industries and destroying jobs……

But with the carbon tax taking effect from Sunday, the moment of truth approaches. Soon enough it will become clear that, for consumers and the vast bulk of businesses, the dreaded carbon tax will have an effect much smaller than the GST.
The retail prices of electricity and gas will rise about 9 per cent, but the increases in other prices will be very small.
Whereas the GST increased the consumer price index 2.5 per cent, the
carbon tax is expected to raise it just 0.7 per cent……
the price increase is aimed mainly at big industrial users of energy
and, more particularly, the generators of electricity.
If the industrial users can be induced to eliminate wasteful use of
power, this will make a difference. And if power companies can be
induced to replace their present generators with less
emissions-intensive models when the time comes, this will make a big
difference. Raising the price of electricity produced by burning
fossil fuels helps make the price of power produced from renewable
sources more competitive.

June 27, 2012 - Posted by | General News

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