Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Can you confirm that a commuter who catches a bus, train or ferry to work from 1 July next year, and therefore reduces congestion and emissions, will be hit by your carbon tax on the fuel used, while someone who drives a car, and increases emissions, will not?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I can absolutely confirm to the member that, as we announced, household petrol is out. It does not have the direct impacts from carbon pricing. We made a determination to do that and it is different to the earlier Carbon Pollution Reduction Scheme. Yes, of course there are flow-through impacts for rail, and I think buses were the other example you used, and all of that has been taken into account in the provision of household assistance—that is, it has all been taken into account in the less than one per cent rise in the consumer price index, which is an impact of less than a dollar in $100. It has all been taken into account. Consequently, because we saw that there would be that consumer price impact, we determined to have household assistance and major tax reform with the carbon pricing package. The way in which that assistance will work is that 1.8 million pensioner households will on average come out $210 in front. That is above and beyond what they need to compensate them for the flow-through impacts of carbon pricing.

People in the workforce who earn less than $80,000 per year will see a tax cut. We have associated that with major tax reform and the moving of the tax-free threshold from $6,000 per year to around $18,000 per year. What that means is that a million Australians will not have to fill in a tax return and many lower income Australians, people on a welfare-to-work journey or people who are second income earners will not see any tax taken from their pay packet. Week by week they will see the benefits of going to work. What these tax cuts also mean is that if you earn, say, $20,000 per year—many second income earners would, for example, because they work less than full time—you will see a tax cut of $600.

We have made special arrangements for families with children, with family payments increasing up to $110 a year. Special arrangements have also been made for self-funded retirees. If they are part pensioners, then they will see the same increase in the pension as full pensioners. Many of them will get the tax cut. There is also a change in the senior Australians' tax offset, which is of benefit to them.

So, if the member is interested in what things cost and the benefits that people get, I presume she would be desperately concerned that all of the assistance I have just referred to would be clawed back by the opposition.