Yawning gap between carbon price impacts and fears Media Release

Jun 24, 2012 - 1:00am

With a third of Australians (36 per cent) believing they will be “much worse off,” there is a yawning gap between Australians’ fear that they will be worse off under the carbon pricing legislation, which kicks in a week from today, and the actual impacts on household well-being.  

“Australians anxiety for cost of living impacts is real but very misplaced,” said John Connor, CEO of The Climate Institute.  

“As we approach the beginning of the legislation, independent pricing regulators have been confirming the price impact estimates behind CSIRO research commissioned for The Climate Institute, CHOICE and the Australian Council of Social Service which said there will be around a 0.6 per cent CPI impact in the first year and negligible impacts in following years.”  

“Regulators like the NSW Independent Pricing and Regulatory Tribunal have also backed the findings that many households will receive significant support through tax cuts and pension increases funded by carbon permit revenue.”  

Ipsos Research conducted a national poll of over 1,000 Australians from May 22 to 29, finding that 36 per cent of respondents fear their households will be “much worse off” and 29 per cent “a little worse off” under the carbon price legislation. One-in-five (20 per cent) thought their situation would be about the same; 10 per cent thought they would be better off.  

There is no significant variation across states or gender in those who thought they would be “much worse off” but 44 per cent of Australians over 55 were of this view compared to 24 per cent of 18 to 34 year-olds.   

Regional Australians were more likely to think themselves much worse off than those in capital cities (41 per cent to 33 per cent). CSIRO research in fact found that regional Australians’ lower consumption levels meant they would face less impact than those in the cities.    

Australian households earning over $150,000 per year were the most concerned at 40 per cent compared to 30 per cent in average income households of $60,000 to $80,000.  

“The number of those who perceive themselves ‘much worse off’ will be a crucial benchmark to the political sustainability of the scheme. Past research has shown that people are prepared to do their bit and support reforms, but the yawning gap between the extreme fears and the reality of moderate impacts or actual benefits will be a key number to watch,” said Connor.  

“The reality is that most households will not feel the impact nearly as much as they seem to think.”

The CSIRO and AECOM research also found that if 100 per cent of costs are passed through, the average weekly impacts would be around $9.10 per week with a $3.30 increase in energy bills being the largest component. The average household will spend an extra 2 cents for a loaf of bread and a litre of milk, 11 cents for a leg of lamb and 14 cents on fruit and vegetables.

"These costs are offset for most when you factor in government tax cuts and pension increases amounting to $10.10 for the average household. We found that 9 out of 10 households will receive support,” said Connor.  

“There are simple energy efficiencies that can put households even further ahead. Estimates show many families could be another $12.75 better off per week ($663 per year) by making just four small changes in the home.”  

A media brief with more detail can be found here.

For more information

John Connor, CEO, The Climate Institute 02 8239 6299 

Kristina Stefanova, Communications Director, The Climate Institute 02 8239 6299 

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