Bringing home the cost of carbon

Household living expenses will be less than Treasury estimates according to a joint study by The Climate Institute, CSIRO and AECOM.
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01.How the carbon price will affect you

With the carbon price now law, households will finally be able to weigh up their own costs, financial support and potential savings with an independent online calculator.

Use the carbon price calculator (below) to find out how much the carbon price will cost your household, and what sort of savings and financial support you're eligible for.

The online calculator is based on figures and information independently and rigorously researched by the CSIRO and AECOM.

The research was commissioned by The Climate Institute in partnership with CHOICE and the Australian Council of Social Services, who together launched the project on 13 November, 2011.

How will the carbon price impact on prices?

This study shows Australia’s carbon price will add 0.6 per cent to inflation in 2012-13 and a second impact of up to 0.1 per cent in 2015/16, assuming businesses pass on the full cost to consumers. This is slightly lower than Treasury estimates, which showed that inflation would increase by 0.7 per cent and 0.2 per cent respectively.

Australian households saw a similar increase in living expenses in 2011, after Cyclone Yasi and a number of other natural disasters devastated food supplies across the country. The price of bananas, for example, increased by nearly 400 per cent after Yasi hit. graph - cost of living

What will the carbon price mean for my weekly bills?

The carbon price won’t come out of your weekly pay packet directly, appear on your tax return or on a receipt like the GST. The study shows an average Australian household will see its living expenses increase by $9.10 per week on average.

The carbon tax will see your electricity bill increase by up to 10 per cent, or around $3.20 per week for the average household. While significant, the main driver of big power price rises remains the cost of new infrastructure, an issue on which CHOICE is campaigning for reform.

The weekly grocery shop will also be slightly more expensive, with the average bill going up by $1.20 per week. A trip to the shops for a loaf of bread and a litre of milk will cost 2 cents more, while the average weekly spend on fruit and vegetables will increase by 14 cents.

To ease the strain, the government will assist households across Australia through tax breaks and compensation. In many cases, this compensation will outweigh the increased living expenses, resulting in a slightly higher income for some households.

For example, if you are a family with two kids, earning $80,000 per year with the income split evenly between the two parents, you will see an overall gain to your income of nearly $2 per week. Most single parents and seniors are in a similar boat, seeing slight gains in their weekly incomes.

Not all households will receive compensation or tax breaks though, with households earning over $300,000 per year not qualifying for assistance. These households however spend proportionally less of their income on living expenses compared to low and moderate-income households.

For many households, these additional expenses can be easily reduced, through simple measures such as switching off appliances left on standby and washing clothes in cold water. For example water saving showerheads can around $5.20 per week on your energy bill, while getting rid of the second fridge can save around $3.55 per week.*

The full report, and a summary are available online.

When will the carbon price come into effect?

From 1 July 2012, about 300 of the biggest polluters pay $23 for every tonne of carbon emitted.

The ACCC has warned consumers to be wary of carbon scams, flagging the tax as a fertile ground for scam artists. CHOICE will be ready to name and shame businesses who use the carbon price as an excuse to pass on unrelated costs to consumers.

The Climate Institute commissioned CSIRO and AECOM to undertake independent research into the impacts of a carbon price on costs of living for Australian households, using a research grant from the Federal Department of Climate Change and Energy Efficiency. CHOICE and ACOSS provided advice through the development of the report and partnered with the Climate Institute in the launch of the Your Carbon Price website.

* Energy savings data from the Sustainability Advice Team and Pitt&Sherry for the Clean Energy Council. The figures quoted are for a NSW household of 2 adults and 2 children with an instant gas hot water system.

The energy efficiency data in the online calculator is derived from analysis prepared for the Clean Energy Council by the Sustainability Advice Team and Pitt&Sherry. Read the technical note detailing all assumptions.

Have you seen any claims about carbon price rises that don't seem justified?

CHOICE is on the look-out for unscrupulous operators who may try and take advantage of consumers to push up prices or run carbon-related scams. If you've seen evidence of this, email us with a photo at and also contact the ACCC.



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