28 July 2015

Final carbon tax report confirms households saving $550 on average

The Australian Competition and Consumer Commission’s (ACCC’s) final carbon tax monitoring report confirms households are saving $550 on average per year since the Abbott Government abolished the harmful tax.

This includes direct savings passed through to customers by electricity and natural gas retailers, which range from $153 to $269, as well as savings across a number of sectors such as synthetic greenhouse gas (SGG) *, landfill, council rates and charges, food manufacturing, water charges, aviation fuel, liquid petroleum gas (for non-transport use) and transport (off-road vehicle, sea and rail fuel).

The ACCC expects these cost savings to flow down the supply chain throughout the economy over time and be passed through to customers as part of the normal market process.

This finding is what the Government expected and part of our strategy to help build a stronger economy and bring down the cost of living for Australian families and businesses.

It confirms that a tax on carbon is harmful for businesses and households. Combined with a proposed increase in the Renewable Energy Target, Bill Shorten’s plan to bring back the carbon tax would massively increase power bills for households and business, destroy jobs and damage industries.

The release of the final carbon tax monitoring report completes the ACCC’s formal carbon tax repeal monitoring role under Part V of the Competition and Consumer Act 2010 (CCA).

I share the ACCC’s satisfaction at the conclusion of reporting that all electricity and natural gas suppliers, and bulk SGG importers have passed through to customers all cost savings attributable to the carbon tax repeal.

The ACCC has not needed to take any enforcement action relating to the price reduction legislation during the monitoring period due to the high levels of compliance with the price reduction obligation.

The high levels of compliance are due to a combination of factors including the price reduction legislation’s focus on the regulated sectors and transparency requirements to substantiate cost savings, entities’ cooperative approach, proactive industry engagement and assistance the ACCC received from many agencies.

The ACCC will report these findings to Parliament by 17 August 2015.  I thank the ACCC for its work in this important area.

A copy of the July 2015 final report is available on the ACCC’s website.

* Average prices after the carbon tax repeal, depending on the synthetic greenhouse gas (SGG) type, range from approximately $8/kg to $34/kg at the bulk import level, compared to average prices of $38/kg to $109/kg during the carbon tax period. At the wholesale level, average prices after the carbon tax repeal, depending on SGG type, range from $14/kg to $33/kg, compared to average prices of $47/kg to $182/kg during the carbon tax period.