Households
The Carbon Pollution Reduction Scheme (CPRS) will motivate people to change their behaviour and use products that create less greenhouse gas emissions when they are manufactured.
The CPRS will achieve this by changing the prices of the goods and services that all households use. Goods that create more emissions to manufacture will generally become more expensive. Ultimately, emissions pricing will assist in reducing Australia’s emissions.
The CPRS will affect Australian households, but the overall impact will be modest. The Treasury estimated that the CPRS, as embodied in the legislation introduced into Parliament in February 2010, would result in increases in the cost of living of around 1.1 per cent across the first two years of its introduction, with very little impact in subsequent years.
There is no cost-free way to take action on climate change, but under the CPRS, the Australian Government committed to providing household assistance to ensure low and middle income Australian households do not foot the bill. The Australian Government is committed to assisting all households, and particularly low income households, to adjust to the carbon price. Every cent raised from the CPRS will be used to help Australians adjust to its impacts and invest in clean energy options.
The household assistance package under the CPRS – as introduced to parliament in February 2010 and worth nearly $50 billion over ten years – is designed to ensure all low and middle income families are assisted with the cost of acting on climate change through direct cash assistance and tax offsets. In the case of most low income households, increases in Government payments will more than offset the increase in costs they face. For example:
A single income couple earning $50,000 with two children (aged 2 and 7) would be more than fully compensated for the rise in costs flowing from the CPRS. The estimated average cost impact of the CPRS for this family in 2012-13 will be $680, but they will receive an additional $802 in assistance from the Government. This household would be $122 better off under the CPRS, and better off still if they reduced their energy and electricity use.
A family earning $120,000 (with a 50:50 income split) with three children (aged 4, 6 and 8) would also be more than fully compensated. The estimated average cost impact of the CPRS for this family in 2012-13 will be $1088, but they will receive an additional $1240 in assistance from the Government. This household would be $152 better off under the CPRS, and better off still if they reduced their energy and electricity use.
How this affects your household
The following tables show the estimated cost impact of the CPRS in 2012-13 and the assistance that would be provided to a wide range of different household types. These estimates are based on the CPRS legislation that was introduced into Parliament in February 2010.
Assistance for low income households
- All low income households would be fully compensated for the overall cost increase they face.
- Around 90 per cent of all low income households – or 2.6 million households – would receive assistance equal to around 120 per cent of the overall cost increases they face.
- Pensioners, seniors, carers and people with disability would be fully compensated for the overall cost increase they face.
Assistance for middle income households
- Around 97 per cent of middle income households would receive some form of direct cash assistance under the CPRS.
- Around 50 per cent of middle income households – around 1.7 million households – would be fully compensated for overall cost increases flowing from the CPRS.
The Government's policy is that once the CPRS commences, household assistance would continue in perpetuity, and that each year, the adequacy of household assistance would be reviewed in the context of the Budget.
Additional things households can do
We can all reduce our emissions and save money on energy bills by making a few small changes around the house.
There are lots of ways to help the environment and reduce the amount of money you spend on energy bills such as:
- taking shorter showers;
- switching off lights when they are not in use;
- reducing use of air-conditioners and heaters; and
- hanging out the washing instead of using a dryer.
Read more things households can do…
What else is the Government doing to assist households?
To ease households’ transition to a low carbon future, the Australian Government committed to protecting motorists from higher fuel costs resulting from the CPRS through cent-for-cent reductions in fuel tax over the first three years of the scheme. Read more on fuel tax transitions…
The Australian Government will also provide assistance 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. Read more on energy efficiency measures…