Households and the Scheme
FACT SHEET 7
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- Households and the Scheme
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The Government is committed to assisting all households, and particularly low-income households, adjust to the introduction of the Carbon Pollution Reduction Scheme.
Household impacts
The Carbon Pollution Reduction Scheme will change the relative prices of the goods and services that all households use. Goods that are relatively emissions intensive to produce will generally become relatively more expensive.
Managing household impacts
The overall cost to households of reducing carbon pollution can be managed by good scheme design. Broad coverage of the scheme will enable Australia to reduce carbon pollution across all sectors at the lowest possible overall cost to households and business.
In addition, every cent raised from the Carbon Pollution Reduction Scheme will be used to help Australians - households and business - adjust to the scheme and to invest in clean energy options.
The Government has made a number of specific commitments to households. The Government has committed to:
- Cut fuel taxes on a cent for cent basis to offset the initial price impact on fuel associated with the introduction of the Carbon Pollution Reduction Scheme. The Government will periodically assess the adequacy of this for three years and adjust this offset accordingly. At the end of this three year period, the Government will review this adjustment mechanism.
- Increase payments, above automatic indexation, to people in receipt of pensioner, carer, senior and allowance benefits. Other assistance measures to meet the overall increase in the cost of living flowing from the scheme will also be provided to this group.
- Increase assistance to other low-income households through the tax and payment system to meet the overall increase in the cost of living flowing from the scheme.
- Provide assistance to middle-income households to help them meet any overall increase in the cost of living flowing from the scheme.
- Review annually, in the Budget context, the adequacy of payments to beneficiaries and recipients of family assistance to assist households with the overall impacts of the scheme.
- Provide additional support through the introduction of energy efficiency measures and consumer information to help households take practical action to reduce energy use and save on energy bills.
The Government has also indicated in the terms of reference for the review into Australia's Future Tax System that it is to consider the interrelationships between the tax and payment systems and the Carbon Pollution Reduction Scheme.
July 2008
