News and Current Affairs

• Carbon Tax 101 - what you need to know by Susan Wahhab
  in News and Current Affairs
  18 Jul 2011  | 0 Comments

  Carbon tax 101:

  WHAT IS IT?

  A flat charge of $23 per tonne of emissions will be levied on the top polluters. It is designed to change energy use and encourage investment in clean energy sources such as solar, gas and wind. In 2015, the tax will be replaced with a market-driven system, referred to as an Emissions Trading Scheme.

  WHO PAYS THE TAX?

  Only the nation's top 500 polluters, half the number originally planned. This is partly due to the government's decision to exclude fuel from the scheme. In total, 0.02 per cent of Australia's 3 million businesses will be taxed. Fuel suppliers and distributors and companies emitting synthetic greenhouse gases, including the refrigeration and air-conditioning industries, are exempt.

  WHERE DOES THE MONEY GO?

  The government has promised 90 per cent of households will be compensated in some way, with 70 per cent fully compensated either through tax cuts or increases to family payments. Pensioners will receive a rise, in line with cost of living increases. Money will also be allocated to high-polluting industries - such as coal - to help them move to cleaner energy practices

  Who and what is excluded?

  Small to medium business, agricultural/farming emissions, forestry, fishing, off-road fuel, households and fuel for light on-road vehicles are all excluded. Fuel for heavy vehicles are exempt for 2 years (until 2014).

  When does it start?

  Proposed to start from 1 July 2012.

  Does it affect taxpayers and business?

  Yes, indirectly, as the price of energy will be passed on to taxpayers. Cost of living will increase, according to the “Clean Energy Future Plan” by $9.90 per week, including electricity at $3.30 per week and gas at $1.50 per week.  This is offset by assistance to households, which will be $10.10 per week on average.

  The Government is proposing to give tax cuts to taxpayers and businesses in order to cope with the increase in the cost of living.

  What tax cuts are proposed for taxpayers?

  • From 1 July 2012, the tax free threshold will increase from $6,000 to $18,200,which means that a taxpayer can earn up to $20,542 tax free. The current tax rates will also be increased from 15% and 30% to 19% and 32.5%.
  • From 1 July 2015, when the emissions trading scheme is introduced, the tax free threshold will be increased to $19,400 and the 32.5% tax rate will be increased to 33%.

         You want my honest opinion?

  • The Govt is robbing Peter to pay Paul!! that sums it up.