Labor’s reported commitment to yesterday’s meeting of the carbon tax Industry Transitional Assistance Working Group that the 2009 Carbon Pollution Reduction Scheme (CPRS) assistance package is “now back on the table” means petrol is on the way up or other promises are set to be broken.
Labor has now:
·         stated the carbon tax will be budget neutral, with zero impact on the budget bottom line;
·         promised that household assistance will be more than 50 per cent of carbon tax revenue; and
·         reportedly offered industry carbon tax assistance based on the 2009 CPRS assistance.
This is an impossible mix of promises to meet unless Labor dramatically increases petrol prices.
An analysis of the last budget estimates on the CPRS, which were published as part of the 2009/10 Mid-Year Economic and Fiscal Outlook (MYEFO) statement, show that over the first five years of operation 41 per cent of assistance went to households, while over the full 12 years 48% went to households. 
Over the first five years the CPRS operated at a $1.15b deficit, which increased to $2.52b over the full 12 years.   
Labor cannot under their carbon tax increase household assistance, maintain industry assistance and eliminate the deficit the CPRS operated under without slashing the fuel tax offset, which to date they have been suspiciously silent about.
It’s time for Labor to come clean – are they planning huge increases in petrol prices under the carbon tax or are they baking a magic carbon tax pudding where the numbers just cannot stack up?  Currently it looks like motorists will be the biggest losers under Labor’s carbon tax.
Professor Garnaut has indicated Australians would pay at least 6 cents a litre more at the petrol pump under a $20 per tonne carbon tax.
Recent Treasury modelling, exposed under ‘Freedom of Information’ laws, shows the inclusion of petrol makes a $170 – $340 a year difference to household budgets under a carbon tax of $20 – $40 per tonne.
As Easter approaches Australians are acutely aware of the impact of rising petrol prices. Australians will be horrified to learn that under Labor’s carbon tax they will be paying significantly more to get to work, get to school, visit family or take a short holiday.


Budget neutrality:
“The overall package of a carbon price mechanism and associated assistance measures should be budget-neutral.”
‘Principles for assessing carbon pricing mechanisms’, Multi-Party Climate Change Committee,
Household assistance:
“More than 50 per cent of the carbon price revenue will be used to assist households.”
Greg Combet, National Press Club, 13/4/11
Industry assistance:
“While companies have previously been told they might not be able to secure the level of assistance achieved in 2009, industry sources were yesterday given a clear indication that the package was back on the table.”
Australian Financial Review, 20/4/11