Media Release by The Hon Jenny Macklin MP

Pollution reduction support for Australian households

Joint Media Release with:

  • The Hon Wayne Swan MP, Treasurer
    Senator the Hon Penny Wong MP, Minister for Climate Change and Water

Low and middle income families will be assisted in moving to a low pollution future as a result of the Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009, tabled in Parliament today.

The household assistance was outlined in detail in the Carbon Pollution Reduction Scheme (CPRS) White Paper released in December 2008.

The package of assistance has been updated to reflect the recently announced changes in the commencement date of the Scheme, as well as changes to the pension system outlined in the 2009-10 Budget.

Climate change is one of the major economic challenges facing Australia and the rest of the world.

Australians want action on climate change.

The CPRS is a key part of the Government’s commitment to reduce greenhouse gas emissions, adapt to the climate change we cannot avoid, and help shape a global solution.

The CPRS will result in a modest increase in the overall cost of living as we start to recognise the costs of carbon pollution in our everyday lives.

That is why the Government is providing low and middle-income households with upfront assistance to adjust to the impacts of the Scheme.

The final CPRS Household Assistance package delivers:

  • Pensioners, carers, people with disability, veterans, the unemployed, students and other income support recipients payment increases of 2.8 per cent over two years, including upfront indexation.
  • Families with children increases of 2.8 per cent over two years, including upfront indexation, to:

    • Family Tax Benefit Part A per child maximum rates and supplement
    • Family Tax Benefit Part B standard rates and supplement
  • an increase in the base rate of Family Tax Benefit Part A of between $128 and $153 per child over two years
  • an increase in the Low Income Tax Offset of $430 over two years
  • an increase in the Dependency Tax Offsets of $165 over two years

A small number of low-income households who can show they will not be assisted in accordance with the Government’s commitments will be provided with a transitional payment for the first two years of the scheme. Eligible claimants will receive a $200 payment for 2011-12 and a $550 payment for 2012-13.

Consistent with commitments made in the CPRS White Paper released in December 2008, assistance levels have been adjusted from the White Paper to reflect the price impacts of the new timing arrangements announced on 4 May 2009. These changes introduce an initial $10 per tonne fixed carbon price in 2011 12 and a flexible carbon price, assumed to be $29 in 2012 13 (as per the White Paper). The composition of the Household Assistance package reflects this staged approach.

The impact on fuel prices will be unchanged, as the White Paper policy on fuel was calibrated to offset the impact of the carbon price, whatever its level. Assistance with fuel costs are delivered by a bill already introduced into the Parliament.

Updated tables providing detailed household outcomes will be available shortly on the Department for Climate Change website.

The Government will update the household assistance package on the basis of any new information on the estimated carbon price before the Scheme starts. Each year, the adequacy of this assistance will be reviewed in the context of the Budget.

The Government will use every cent raised from the sale of carbon pollution permits to help households and businesses adjust and move Australia to the low pollution economy of the future.

This package complements the Government’s Energy Efficient Homes program, announced in February 2009, which will ensure that households have access to practical measures to help them reduce their energy use and save on energy bills prior to the introduction of the Scheme.

These measures deliver on the Government’s continued commitment to provide low and middle-income households with additional support to help maintain their standard of living, while tackling climate change.

Overview of Carbon Pollution Reduction Scheme Household Assistance

Following the phase in of the Scheme, from 1 July 2012:

Pensioners, seniors, carers and people with disability will have received a 2.8 per cent pension increase over two years (including upfront indexation) – an increase of $504 for singles and $380 for each member of a couple, based on current arrangements.

Self funded retirees will have received an upfront increase over two years in the new Seniors Supplement of $504 for singles and $380 each for a couple.

Low and middle-income families will have received one or a combination of:

  • an increase in the maximum rate of Family Tax Benefit Part A of 2.8 per cent over two years (including upfront indexation) – an increase of up to $175 per child
  • an increase in Family Tax Benefit Part B of 2.8 per cent over two years (including upfront indexation) – on current arrangements, an increase of up to $110 per child
  • an increase in the base rate of Family Tax Benefit Part A of between $128 and $153 per child over two years
  • an increase of $430 over two years in the Low Income Tax Offset
  • an increase of $165 over two years in the Dependency Tax Offsets

Allowance recipients – including the unemployed and students – will have received an increase of 2.8 per cent over two years (including upfront indexation) – an increase of up to $351 for singles, and up to $312 each for a couple.

Motorists will pay no more to cover their fuel emissions, due to cent-for-cent reductions in fuel tax for the first three years of the scheme.