The carbon tax is expected to affect everyone in Australia, from the richest Aussies to the lowest income sector. The tax is heavily directed towards high polluting sectors such as coal fired electricity producers and other carbon intensive energy and goods, and will significantly raise their production costs. The aim of this is to strongly encourage various sectors in the country to make the switch to renewable energy sources by making it more financially viable to do so.
As a result of the increase production costs, electricity prices will increase as well as many market products. The federal government anticipated that the low income sector of the country will be heavily affected by these price hike because they;
§ Incur the greatest energy costs as a proportion of weekly expenditure.
§ May be unable to improve energy efficiency through purchasing efficient appliances.
§ May be unable to select an energy efficient home.
§ Record higher energy consumption despite the low income and energy inefficiency
§ Be located in isolated communities that have either inadequate infrastructure or restricted choice of energy source; and
§ May have health and disability issues.
The government has foreseen these possible problems and so a portion of the total carbon tax revenues will be used to compensate heavily affected sectors of the community and improve their quality of life. 50% of the total revenue has been committed for the first 12 months that the carbon tax is in place.
The government has been recommended to prepare a plan to assist the low income sector through the encouragement of energy saving measures, as well as tax or social security adjustments, rather than short term handouts that don’t have any long term effects.
The government will also be providing financial support for improving home energy efficiency such as assisting households to purchase solar hot water systems and small scale renewable energy systems like solar panel systems. There will also be extensive information and education about how to reduce their home energy usage.
Ultimately the government can best aid these households by:
§ Providing energy saving measures that will reduce their energy consumption long term
§ Opening doors for new work opportunities, and assisting the community in the overall reduction of energy costs and improving efficiency.
§ Reducing the big spike between peak and non-peak demand for energy.
§ Social mobilisation in terms of energy use.
§ Providing the community with the knowledge and opportunity to reduce pollution.
The government hopes that the plan will eventually bring behavioral changes to the community as a whole and impart initiatives to move Australia towards large scale carbon emission reduction.
The Clean Energy Council of Australia has been the major force behind the plan of the government in assisting the low income sector of country, and also suggests that it should be further backed up with a National Energy Savings Initiative scheme for sustainability.
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