Carbon Tax Called Off in Australia
July 17, 2013 Taxation in Australia
SYDNEY – Tax changes in Australia are expected to reduce the cost of living for every single household in the country by approximately AUD 4 per week.
In a press conference held in Sydney on July 16th the Prime Minister of Australia Kevin Rudd announced that the country’s widely criticized carbon tax system will be ended one year ahead of schedule, on July 1st 2014, to be replaced by an market based emissions trading scheme (ETS).
According to the Prime Minister, the move is intended to help reduce “…cost-of-living pressures for families and to reduce costs for small business” by lowering the price of carbon emissions paid out by electricity producers.
Under current regulations, emitters are required to pay out a tax of AUD 24.15 per tonne of carbon released into the atmosphere, but following the switch to the ETS system, the cost of emissions will drop to an effective rate of approximately AUD 6 per tonne.
Kevin Rudd said that if the tax savings are passed down to consumers, the average Australian household will see its weekly power bill drop by AUD 4.
Dropping the carbon tax system is expected to lead to a AUD 3.8 billion fall in overall tax revenues, which will be offset by a reduction tax subsidies offered to businesses and individuals.
Photo by sludgegulper