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“If the carbon tax is so small, why do they overcompensate low income families?”

29/05/2012

You have heard this question I am sure. But there is a reason it is the way it is.

In the last ten years, with the absence of any form or carbon pricing or tax, you may have noticed a considerable rise in the prices of utilities. Now while some states provide some assistance to pensioners and low income families in regard to some of these rises, things like electricity is based on usage too.

If for example a household family of five has a gross family income of $160k and are paying $4k in electricity, then 1/40th of income needs to be dedicated to this annually.

If a family of five had a gross annual family income of $80k, (and using the same electricity), then 1/20th of that families income is dedicated to electricity.

A family of five on the average income of around $45k would be dedicating 1/10th of their income to electricity.

Pensioners may not use the same electricity use as a family of five, but don’t get a lot of income either. And since electricity is sold by the kW, they pay for what they use. In the last 15 years, rises in utilities have had a huge impact in disposable income to some middle and low income families. All because of the cost involved in delivering the electricity to the consumer. 

Yes. Remember that the rise in electricity prices have NOT been to a carbon price. Shortages in infrastructure development has been the real problem here. And the irony is they didn’t act because they were not sure if they were going to get a carbon price or not.

Yeah that’s right. This has been a long time coming. Almost 20 years. And Tony Abbott wants to send us back into that uncertainty cave for another 10 years.

Add to this the terrible catch-22 that while those on higher disposable income can more readily afford newer fridges and TVs that use less electricity, pensioners are more then likely using much older, more energy costing equipment.

So what the government is doing here is attempting to address two issues with one stone. One is to price carbon and to provide certainty.

And the other is to address that huge impact rising services have had on low income families over the last few years due to lack of certainty.

The extra compensation is not to cover them in case the modelling is wrong. It is to right another disparity re the effect of utility prices. At least that is the way I see it.

Labor to its bootstraps. Not a handout. A hand up.

.

A. Ghebranious

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3 Comments
  1. G’day Ash. Nice one. Details that are conveniently ‘forgotten’ by some.

  2. Catching up permalink

    We cannot let facts get in the way of an Opposition attack Problem is the day will arrive very shortly, the sky will not fall in. I wonder how Abbott will function then. Some are saying he is diverting his actions into becoming a statesman. Is that possible. It would have to be the biggest turnabout of any politician in history.

  3. suez permalink

    Nothing ever changes in politics.
    Abbott will always be an arsehole. There is not much of a gap if any between a blue tie and a string of pearls . People did not vote for this sorry excuse for a man, they stopped voting for labour.

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