The program outlined by the Gillard Government yesterday, is generous, that's for sure. I think there is an attempt to ensure most Australians and businesses will feel very little impact of the carbon tax with compensation covering most pain.

Points of interest:

– 4 million Australian households will come out 20 per cent ahead… (they’ll get 20 per cent more compensation that what their costs will go up).

– 2 million households will have their costs covered.

– 2 million households will make a loss because they won’t be fully compensated. (I think I'm one of those!)

– 700,000 of the richest households won’t get any compensation at all.

 

THE CARBON TAX

– $23 a tonne

– for average households costs will increase $9.90 a week but compensation will be $10.10

– 9 out of 10 households will receive assistance… and 2 out 3 of those households will receive enough to cover the extra costs.

– 500 companies and 3 million households will be worse off.

– aim is to reduce emissions to 5 per cent below year 2000 levels by 2020 and 80 per cent below 2000 levels by 2050.

– electricity generates a third of our emissions.

ECONOMY

– Budget will take a $2.68 billion hit this year and $400-500 million/yr over next 2 years.

– will add 0.7 per cent to the CPI in it’s first year… the GST added 2.5 per cent.

– electricity prices may go up 10 per cent, gas may go up 9 per cent.

– will slow average income growth 0.1 per cent a year… the ageing population will slow income 0.3 per cent.

TAX BENEFIT

– tax free threshold tripled to $18,200 a year from July 1, 2012.

– regular wage earners below $18,200 will have no tax withheld.

– 1 million Australians will not have to lodge a tax return.

– but middle tax rate ($37,000-$80,000) will rise from 30-32.5 per cent… to stop over $150,000 earners getting a benefit

– all taxpayers under $80,000 a year will pay less tax.

– no Australians will pay more tax

FAMILIES

– with 2 children will up to $220 in extra Family Tax Benefit A and other families will get $110.

– extra $69 in Family Tax Benefit Part B

SENIOR AUSTRALIANS

– pensioners and self funded retirees will get up to $338 a year for singles and up to $510 a year for couples.

– will get lump sum advance of $250 in May-June 2012… basically getting 9 month payment in advance.

– 90 per cent of pensioners will make a profit… receive more compensation than be hit with extra costs

– Commonwealth Seniors Health Card (mainly self funded retirees) will get the same assistance as pensioners.

– Self funded retirees will get benefit of increase in tax free threshold.

SINGLES

– get the tax cuts.

– People on Assistance will get $218 for singles up to $390 for couples.

SMALL BUSINESS

– small business instant asset write-off threshold will rise from $5000-$6500

– no extra paperwork

– no compensation for increase in electricity costs … go up 10 per cent.

NEW FUNDING

– $10 billion Clean Energy Finance Corporation

– $3.2 billion Australian Renewable Energy Agency

– $200 m Clean Technology Innovation Program