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Abbott's absurdities exposed: Bulletin no.40

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THE HON GREG COMBET AM MP Minister for Climate Change and Energy Efficiency Minister for Industry and Innovation


GC 291/12 25 October 2012


The Coalition is misleading the public over the impact of the carbon price on the cost of living.

Before the carbon price started, the Opposition Leader Tony Abbott predicted its impact on prices would be “unimaginable.”

The Australian Bureau of Statistics reported yesterday that the Consumer Price Index rose by 1.4 per cent in the three months to September - compared to a 3.8 per cent increase when the Coalition’s GST came into effect in the September quarter of 2000.

The Opposition’s climate action spokesman Greg Hunt has continued the scare campaign by claiming the September quarter CPI increase was largely due to higher electricity prices.

In fact, higher electricity prices contributed 0.3 percentage points of the 1.4 per cent CPI increase, less than a quarter of the CPI rise - and not all of this was due to the carbon price.

Treasury modelling shows the impact of the carbon price on household electricity bills averages around $3.30 per week - and the Gillard Government is providing households $10.10 a week on average in assistance through tax cuts, higher family payments and pension and benefit increases.

Mr Hunt continues to attempt to scare Australian households by stating: “Every time you turn on the kettle, open the fridge, turn on the light, switch on the TV you will be paying the Carbon Tax.”

The fact is that to incur a carbon price impact of just $1.00 on your electricity bill you would need to: boil your kettle to make more than 1600 cups of tea; run an efficient fridge for over a month; run a 20 Watt fluorescent light for around six hours every day for a year; or watch around four hours of television each day for two months on a 40 inch LCD.

However, because of the increases in electricity network prices you would pay the mostly State-owned electricity companies around $5.00 for each of these activities.

In NSW, for instance, the Productivity Commission has demonstrated that network charges now average $22.20 a week and these charges have risen by 130 per cent since 2007-08.

If the Coalition really cared about the cost of living it would focus on the real drivers of household electricity price rises rather than running political scare campaigns on the carbon price.

Media Contact: Mark Davis, Gia Hayne 02 6277 7920