Catholic Social Services and other agencies have welcomed a commitment by the Federal Government to ensure that poor people are not adversely impacted by carbon pollution reduction strategies.
The average household will spend more than $260 extra each year on electricity bills, and be slugged an additional $1 for every $100 spent on groceries, as family budgets are mobilised to help shoulder the costs of emissions, The Canberra Times reports.
But households earning up to $150,000 a year will be shielded from energy price rises of as much as 16 percent under the Federal Government's proposal for an emissions trading scheme.
Car owners have also won a five year reprieve from significantly higher transport costs, with the excise on petrol to be dropped until 2013 to help compensate for higher petrol prices.
"Tackling climate change will be hard and there will be costs, but we will help Australians every step of the way," the Minister for Climate Change, Penny Wong, said yesterday.
Based on preliminary modelling by Treasury of a carbon price of $20 per tonne, the Government believes the overall effect on household budgets will be a 0.9 percent increase, with higher energy costs comprising the largest amount. Electricity alone is predicted to rise by 16 percent because coal fired generators discharge huge volumes of greenhouse gases. Gas is expected to go up by 9 percent.
The impact on petrol will be largely offset by the Government's decision to reduce the excise, but motorists have been warned that the measure will be reviewed in 2013 and the Government is making no promises that further reductions will be made.
Families are unlikely to face steeply rising food prices because agriculture has been exempted from emissions trading until at least 2015.
The Government hopes that price increases will encourage people to consume goods that are less carbon heavy. "In reality, households would be expected to reduce their consumption of goods whose relative prices have increased and increase their consumption of goods whose relative prices have decreased," the green paper says.
The Government is promising that people on low incomes of up to $53,000 a year will be shielded from the full impact of the scheme, with the help of tax cuts and higher family payments, probably in early 2010, to help them deal with price rises.
Pensioners, seniors and carers will also have their payments increased. Middle income earners, defined as households earning up to $150,000 a year, can also expect some assistance.
The Government plans more energy efficiency programs to help people effectively fireproof their lifestyles against price increases. These include mandatory efficiency labels on appliances, help with insulating houses and getting more fuel-efficient cars on the roads.
Welcoming the assistance, the executive director of Catholic Social Services Australia, Frank Quinlan, said: "Many people face the impact of disadvantage on many fronts, including health inequities, access to education and the cost of living. We don't want to add carbon poverty to the list."
Speaking shortly after the release of the Paper today, Mr Quinlan said in a statement that the opportunity exists to design a system from the ground up that protects low-income households from a new form of poverty.
The executive director of the Brotherhood of St Laurence, Tony Nicholson, said compensation through taxes and pensions was welcome but would "not help low-income households reduce energy consumption".
"We look forward to working with the Government on programs that assist [people] to become more energy-efficient, such as retrofits of homes to install insulation and other energy-saving renovations," Mr Nicholson said.
For the sake of our children (Canberra Times, 17/7/08)
Carbon poverty on government's agenda (Media Release, CSSA, 16/7/08)
Catholic Social Services Australia