How the carbon tax has affected household budgets

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The federal government introduced the carbon price on July 1.

The carbon price is applied to most of the emissions of the largest 300 emitting companies in Australia. Households will feel the impact via higher energy bills and some other higher prices as the carbon price filters through the economy.

NATSEM modelling suggests that households will be impacted, on average, by around $8.84 a week. Electricity prices are set to rise by around 10% and gas bills by around 6 percent.

carbon tax household budget

This means $3.85 per week extra in electricity and gas bills. Due to different energy sources, price impacts and consumption levels, average energy cost impacts vary.

The lowest will be felt in South Australia at just $2.40 per week, compared with $4.60 in Victoria.

The impact on most other prices will be less than 1%. Average food bills are expected to increase for households by around $1 per week and health costs by just 25 cents per week.

Transport costs are little impacted as petrol is exempt and most new cars are imported and won't face a carbon price.

Since the government is compensating households for the carbon price, only high-income households and high-energy consumption households will not be fully compensated.

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Ben Phillips is principal research fellow at the National Centre for Social and Economic Modelling.