Expert warns of ‘stealth carbon tax’ set to make Aussies $855 poorer per year

Australians could see their power bills increase by nearly $1300 every year to pay the for the federal government’s “carbon tax by stealth”.

Australians could see their power bills increase by nearly $1300 every year to pay the government’s “carbon tax by stealth” while money-losing renewables projects could still be approved thanks to a shadow carbon price quietly introduced last year.

According to Aidan Morrison, energy policy director at the Centre for Independent Studies, last year federal and state energy ministers agreed on a shadow carbon price, known as the “value of emissions reduction” of $66 per tonne.

This figure was already more than double the $23 per tonne carbon price introduced under the Gillard government which was later scrapped in 2014 under Tony Abbott.

However under the government’s plans, the shadow carbon price will ratchet up between now and 2050 to $420 per tonne.

A study released Thursday and co-authored by Morrison said that could result in consumers paying between $855 and $1294 per household per year for power.

Prime Minister Julia Gillard in 2011 promoting her government’s carbon tax. Picture: AFP

The same analysis also found that because of the assumed cost of carbon, projects that might not otherwise be approved would be allowed to proceed, on the basis that the value of the carbon they were offsetting made it worthwhile – even if consumers had to foot the bill.

“Costs will be passed onto consumers through electricity network projects because the regulatory investment framework will now include the interim VER as a benefit in their cost benefit analyses,” the paper co-authored by Morrison warns.

Under the stealth carbon price, even uneconomic renewables projects could be given the green light.

“This change is likely to increase the assessed benefits of projects that claim to reduce emissions, projects which might otherwise have been deemed uneconomic,” it says.

“There may be a legitimate argument that a carbon tax is an efficient way to reduce emissions. But the way this has been advanced by the energy ministers avoids any discussion in parliament of the matter, or any external consultation,” Mr Morrison said.

“This is a masterclass in how to introduce a carbon tax by stealth. This change will allow major transmission and distribution projects that will increase energy bills to be quickly approved by the energy regulator by using the carbon price to boost their apparent ‘market benefits’.”

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