David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. What will the government do to support households as they adjust to a low carbon future?

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

I thank the member for Lindsay for his question, because he knows that we do have to act responsibly and decisively to confront the reality of climate change. That is what we are preparing to do with our Carbon Pollution Reduction Scheme and we welcome the opposition’s support for that scheme. We recognise that moving to a low carbon economy will have an impact both on individuals and on families. Putting a price on carbon will see some moderate increases in the prices of particular goods and services, and the government has always been upfront with the Australian people about these changes.

As part of the Carbon Pollution Reduction Scheme, we will provide low- and middle-income households with compensation. That is a clear part of the scheme that is being proposed. Low-income households will be fully compensated to meet the expected average overall increase in the cost of living due to the CPRS. In particular, 90 per cent of low-income households will receive assistance in excess of 120 per cent of the average overall expected cost of living increase. It is also the case that middle-income households will receive assistance to help them with the increase in the cost of living. Half of all middle-income households will be fully compensated for the expected average overall cost of living increase. Around 97 per cent of middle-income households will receive some direct cash assistance. These are very important commitments we have made to low- and middle-income families and individuals to help them with the impact of the new carbon economy. The assistance package has today been welcomed by the Australian Council of Social Service. It says:

ACOSS welcomes the government’s commitment to provide cash compensation for low income households through the tax and payments systems to cover the expected energy price increases.

To give people an idea of what this means in dollar terms for a family, a household with two children, earning $100,000, would be more than fully compensated. They would have an average cost impact of $976 and would receive compensation of $1,014 in 2012-13. These figures demonstrate the way the system will work. It will be the same for people who are on income support payments, for students and for the unemployed. They will receive an increase of 2½ per cent to their payments over two years, including upfront indexation, to help them with the introduction of the scheme. We will also see similar increases for pensioners, carers, veterans and people with a disability. Those people will receive an increase of $455 if they are single and $343 for each member of a couple. There will be increases to Family Tax Benefit parts A and B, increases to the low-income tax offset and to the dependency tax offset. All of these changes will make sure that low- and middle-income families and individuals will be helped as we move to a low carbon future.