Australians will keep paying for a carbon tax from July 1 as its cost also rises
AS the Coalition’s hope of repealing the carbon tax fades, Australian households will keep on paying it from July 1 — and the bill will be even bigger.
HOUSEHOLDS will keep on paying the carbon tax from July 1 — and the bill will be even bigger.
Under laws brought in by the former federal Labor government, the so-called “price on pollution” will rise by five per cent from next week to raise an estimated $11.8 million a day from electricity generation alone.
There is now no chance the Coalition’s legislation to axe the tax will pass Parliament prior to its preferred end date of July 1 because until then Labor and the Greens have blocking numbers in the Senate.
While some major electricity retailers have vowed to refund carbon tax collected from the start of the new financial year, not all have or will. Origin Energy, which has 4.3 million customers Australia-wide, would not commit yesterday. It may ultimately decide to do so, but smaller retailers — which combined hold 20 per cent of the market — may not.
“They (smaller retailers) probably can’t pass back if they don’t get it (back) from generators,” a senior energy industry source said. Electricity generators pay carbon tax, which they recoup from retailers who then charge it to consumers.
LAST CHANCE: PM re-introduces bill to dismantle carbon tax laws
The risk that households will be left out of pocket appears to be being increased by Clive Palmer.
When the Senate composition changes on July 1, Mr Palmer will control the four votes the Coalition needs to axe the tax.
Mr Palmer has said his “Senate team will support repealing the carbon tax if energy companies are required by law to pass the savings on to customers”. Environment Minister Greg Hunt told Sky News yesterday that savings would have to be passed on. But legal experts said the repeal bill does not require returning to consumers tax paid from July 1.
“There is nothing that says (retailers) have to refund that,” Allens partner Grant Anderson said.
If the carbon tax is not repealed by July 18, refunding carbon tax is expected to become much more complicated.
The carbon price — currently $24.15 a tonne and rising 5 per cent to $25.40/t from next week — is added to wholesale electricity derivatives contracts through a “carbon benchmark addendum”.
News Corp Australia can reveal that last week, the Australian Financial Markets Association resolved that should repeal take place by July 18 the carbon benchmark addendum would be set to zero and backdated to July 1.
But if it does not happen by then, there will be no retrospectivity. Consumers would be reliant on the generosity of retailers.
“It’s just too hard to unwind things after” July 18, Allens’ Mr Anderson said.
“July 18 is effectively the cut off for a retrospective effect,” said Jenny Mee, a partner with another firm, K&L Gates.
If the repeal bill does not pass the Senate in the two sitting weeks leading up to July 18, the carbon tax will be in place until at least the end of August, because the Upper House is in recess until then.
The Energy Supply Association of Australia, which represents private and state-owned generators and distributors, yesterday said that as time goes on “it will become harder and more expensive to unwind” carbon liabilities “because of the complex system of contracts used in the electricity market”.
The ESAA estimates the carbon tax will raise $11.8 million a day from electricity generation from July 1. Yesterday both EnergyAustralia and AGL both promised to refund the carbon tax they collect from the start of the new financial year.
The office of the Environment Minister Mr Hunt did not respond to requests for comment. Neither did the Palmer United Party.
Last night, Origin — which had earlier repeatedly refused to commit to refunding — told News Corp Australia it would do so and that this had been its position all along.
Originally published as Australians will keep paying for a carbon tax from July 1 as its cost also rises