The introduction of the Carbon Tax has been outstandingly controversial, causing divisions between many government parties and households, all across Australia. The motives of current Prime Minister Julie Gillard have been questioned, with opposition leaders enquiring as to why she introduced the carbon tax at all. While people may be questioning the motives of the PM, Miss Gillard continues to stand by her decision; reminding Australian’s that carbon emissions will be reduced by 160 million tonnes by 2020. While we’re all conscious about our impact on the environment, how will our finances stand up against the dramatically increased prices?

How the Carbon Tax will affect Prices

Many Australian families live, abiding by a weekly budget. If prices were to increase drastically, how would your family cope with the changes? While prices will increase, including gas and electricity, along with other everyday expenses, businesses have been warned that they must not ‘blame’ the carbon tax for irrelevant price increases or they could be in line for $1.1 million fine for breaching the Competition and Consumer Act and purposely misleading consumers.

If you have a larger family, however, you may see a notable difference to your weekly grocery bills. Average estimates state that meat costs may increase by up to 10 cents per week for families, with other supermarket products also showing a rise in prices.

Proposed Benefits of the Carbon Tax

While there has been much emphasis on the negative impact that the introduction of the Carbon Tax will have on families, the Prime Minister has put forward a number of proposed. The money accumulated from the new tax will be put towards pension increases, the newly increased tax threshold and helping Australian businesses to become more energy efficient.


While the announcement of the Carbon Tax initially hit Aussie families hard, Prime Minister Julie Gillard announced the compensation of raising the tax free threshold, by three times its current amount. While the past tax free threshold sat at $6000, the PM has increased the threshold to a staggering $18, 200 – hoping that this would ease the pressure for families nationwide. The tax free threshold is what most Australians are happy about, with no tax being paid on up to $18, 200 of income, each financial year.

The impact of the Carbon Tax will affect individual families in a number of different ways. While the Prime Minister stands by her decision, claiming that this introduction will make for a ‘greener’ future, Australian families who have been hit hard are still likely to question the motives. The newly introduced tax free threshold should help to assist families in combatting the effects of the carbon tax, making price increases much more bearable. If you need assistance with your finances, contact the professionals at Kelly Partners.