After countless months of news coverage and political rumblings, details of the carbon tax have finally been announced.
The policy is extremely complex, and we will still have to wait and see the full effects for business, employment and households alike.
Your Money answers some of your questions.
Q: What’s it all about?
Starting 1 July 2012, an initial fixed carbon price or $23/tonne will be paid by non-exempt companies that annually produce at least 25,000 tonnes of CO₂ per facility. It is estimated that 500 companies will be affected. The price will rise in 2015, when it will be set by the market.
Q: How will I be taxed?
Only companies will be directly taxed, however in order to assist low income earners with paying for the flow on cost rises in electricity bills etc, the tax free threshold will initially rise from $6,000 to $18,200. Additionally, the marginal tax rate at $18,201 will rise from 15% to 19% and from $37,001 it rises from 30% to 32.5%. These changes provide a tax incentive for low income earners to work, but will see higher taxes for those earning at the top end.
Q: Will the cost of living increase?
-Electricity prices are predicted to rise by 10%
-Gas prices will increase by approximately 9%
-Food will increase by less than 1%
Q: What is the government doing to help households?
The federal government has forecasted that 8 million households (out of a total of 9 million) will receive funding assistance. Weekly household spending is predicted to rise by an average $9.90, with the average compensation sitting at $10.10, though not evenly distributed across the above categories.
More info? Read our 5 ways to beat the carbon tax checklist.
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