13 Apr Introduction Of The Carbon Tax – Who Understands It…..
The carbon tax will be introduced as from 1/7/2012. Now the simple question – Put your hand up if you understand all the ins & outs of the Carbon Tax ??!!!!!!
In the latest carbon tax reform package, the Gillard government may be trying to appeal to their traditional supporter base. Lower to lower middle income earners will get a tax cut & pensioners a one-off $250 advance payment in May (with pensions to be adjusted higher in 9 months time) and dropped the hammer on the top tax bracket and the businesses that won’t come back to bite them. Either way the government can’t win as electricity & gas prices will continue to rise over time & the government will be blamed for this regardless of any further cost rises due to the carbon tax (Just look at the recent Queensland state election for evidence of this).
The Federal Government also used the opportunity to simplify the tax system. From July, every taxpayer earning up to $80,000 a year will receive a tax cut, with most getting at least $300 annually, at the same time as the Queensland flood levy is withdrawn. A second round of tax cuts will apply from July 2015, and the tax-free threshold will be more than trebled, increasing from $6000 to $18,200 from July 2012, and to $19,400 from July 2015.
For business, its introduction will be complicated, with numerous schemes, bureaucracies and programs that they will need to work through. To gauge what parts of the business will be eligible for assistance, and what won’t, will involve varying degrees of difficulty. Five hundred – instead of the original 1000 – biggest polluters will be targeted and the levels of compensation will vary depending on the industry and the configuration of the business. On a positive note, formalising the price of carbon at $23 a tonne from July, rising at 2.5 per cent a year in real terms, then giving a transition date for when the price will be set by the market, provides a level of certainty that business has been crying out for (although Australia reportedly will have the highest carbon tax in the world).
The scheme will also make it difficult for investment markets to properly assess the impact on individual companies, as they try to factor in what will be eligible for assistance, and how much of the carbon costs they can pass on to their customers. Complicating the issue further Tony Abbott has made a promise written in blood that the first course of order for a Coalition Government will be to repeal the carbon tax and remove/rollback subsidies and tax cuts/benefits arising from the legislation.
In our household we have thought of having a self imposed carbon tax – not that it does any good with 2 teenagers. Every day one or both of our children are told to get out of the shower/turn the water off/stop wasting the water/turn the light, television off/why do you need your Computer, Laptop, TV, X-Box/PlayStation/Nintendo & mobile phone all going at the same time ? We have found the most suitable form of deterrent for getting out of the shower is to firstly bang on the bathroom door at least 3 separate times & then if that doesn’t work turn the hot water off after the shower has been going for 15 minutes !! (I won’t talk about how our internet download is always used up 2.5 weeks into each month, otherwise my blood pressure might rise further !!!!)
Realistically if the Federal government was serious about making inroads into carbon emissions, it would have introduced reforms that change the grassroots behaviour of ordinary people (that is a courageous political decision Prime Minster – Sir Humphrey/Yes Minister), instead of rewarding most of them regardless of what they do for the environment. As an example, households will not face a carbon price on transport fuels, which is the most commonly occurring daily pollutant. If there was any doubt, the figures released by the government show that the carbon tax will, on average, cost households $9.90 a week, whereas average assistance will be $10.10 a week, meaning 4 million households will be better off and many millions will be no worse off.
How will the Carbon Tax affect us all as individuals & families ? – only time will tell