Everyday cost of carbon tax will be minimal - except on energy bills

Treasury estimates show the carbon tax will hurt, but is unlikely to break budgets.

The first line-by-line estimate of price impacts finds the price of milk will climb by less than 1¢ a litre; the price of a packet of breakfast cereal by less than 2¢.

Takeaway food and restaurant meals will set us back a bit more - Treasury says they will cost an extra 20¢ a week. Rent will cost an extra 40¢ a week and the cost of housing for a buyer will climb 90¢ a week.

Energy bills are the only prices set to soar. Treasury says water, gas and electricity in an average household will rise $4.60 a week, an increase of 7.9 per cent.

Releasing the calculations in the midst of parliamentary debate on the bills set to last until November, the Treasurer, Wayne Swan, said the government would provide assistance to cover the higher costs, of an average of $10.10 a household a week - slightly more than the increased costs, which would average $9.90 a week.

“Households that improve their energy efficiency - by doing things such as turning off appliances at the wall or switching light bulbs - can end up coming out in front,” he said. ”They can help the environment and their family budget at the same time.”

More modelling to be published this week will show the economy still growing strongly under a carbon price with incomes and employment rising.

Mr Swan heads to Washington this week to meet finance ministers amid increasing concerns about European sovereign debt. He will attend meetings of the Group of 20, the World Bank and the International Monetary Fund.

When the shadow treasurer, Joe Hockey, was asked yesterday to give an “iron clad” guarantee to repeal all the compensation measures and the carbon tax if the Coalition took office, he said he would “have to”.

“We have committed to removing the carbon tax,” he told Sky News. “We have said that you do not need to have compensation if you don’t have a tax.”

Mr Hockey said he would bypass the new election costings process and have his policies costed by the private sector instead of the Parliamentary Budget Office.

Asked whether the government would say he was “running away” because his costings had holes, he said it would say that in any event.

The accountants that Mr Hockey said audited the Coalition’s policies for the election last year are being investigated by the Institute of Chartered Accountants.

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