Carbon levy to hit poor, Vinnies researcher fears

Introducing a $10 a tonne carbon levy to fight climate change will hit pensioners and other low-income earners and will erode government concessions assisting the poor, a Vinnies researcher says.

Writing in The Age, Gavin Dufty says that while much of the debate has focused on the impact a levy would have on business and the economy, St Vincent de Paul Society was more concerned about its impact on disadvantaged groups in the community.

"This lack of detail is all the more concerning given that such a levy is estimated to raise an extra $2 billion annually," he adds.

Governments, green groups and other levy proponents need to acknowledge this and present strategies that address the social issues involved, he says.

These issues include the disproportionate impact of such a levy on pensioners.

"This occurs because this group consumes energy at a rate below average household consumption, but, conversely, as a proportion of their weekly spending, they pay almost double the amount compared with the average household," Mr Dufty says.

A second issue that requires acknowledgment, he says, is that some research shows that a 7 per cent increase in electricity bills will not result in a significant cut in demand.

"This not only serves to highlight the inability of many households to reduce consumption in response to price increases, but the bluntness of pricing as a way to change behaviour," Mr Dufty argues.

Thirdly, he added, such a proposal effectively negates the $105.20 a year the Commonwealth Government gives to pensioners to meet the cost of utilities. He says that households will, in effect, be taxed and then refunded.

Ultimately, "pricing alone is a blunt way to tackle these significant environmental, social and economic challenges," Dufty concludes.

"In the St Vincent de Paul Society's view, it is a simplistic one, one that does not guarantee the desired outcomes.

"Sustainable solutions to the problem of climate change demand a response that embraces and guarantees social justice, ensuring all Australians share equitably in responding to this challenge."

Carbon levy an unfair impost on poor (The Age, 28/3/07)

LINKS (not necessarily endorsed by Church Resources)
Carbon credit (Wikipedia)
Carbon offset (Wikipedia)

Act now on climate change: US bishops to Congress (CathNews, 9/2/07)
Face truth about fossil fuels, Bishop Toohey says (CathNews, 8/2/07)

29 Mar 2007