July 25, 2011

It will only hurt "this" much

The tax we don't yet have, and the over-compensation not yet distributed, is only going to affect consumer pricing by some pittance of less than one per cent.

So says Julia Gillard.

With absolute confidence.

Many voters believe her.  They've bought the message, many noting that the affect of this on the Australian economy will be negligible compared to the ten per cent GST, which we all absorbed without a whimper.

Even major retailers are crying poor and blaming the tax that is yet to be put to parliament.  Why do they believe that a negligible change to consumer costs is already and will continue to engender a massive turn down in spending?

It doesn't add up.

None of the claims add up and they never will.

In Victoria: 
Analysis of tariff data collected by welfare group the St Vincent de Paul Society shows electricity prices have increased on average by between 27 and 36 per cent since 2008. Gas prices have risen on average by between 24 and 29 per cent.

Water bills have increased by up to 68 per cent on average in Melbourne since 2007-8. They are expected to rise by another third in the next two years.
That's WITHOUT a CO2 emissions tax.  And the much vaunted over-compensation for those on Centrelink payments and low income earners is a massive mound of horse shit.

Those utility increases have occurred long before a CO2 emissions tax, imagine what those privately owned companies are going to do to pricing once the tax is in place.

The government wealth-redistribution doesn't come even close to covering the increases of recent years, and will not cover increases predicted over the next several years.  (That's before people have to start checking the price of every other ordinary living expense - food, housing, education, public transport, clothes, shoes, and all the rest of it.)

People aren't spending because they can't, not because they're saving - they're spending, on essentials.  There are only so many lights to turn off or jumpers to put on in winter.  The bulk of utility bills are almost immovable.  People use less and less power and water, but still end up paying more and more.  No wonder they're not buying new frocks or a fourth television.

That negligible price impact of the CO2 emissions tax?  Just wait.  It's going to be huge.

Big jump in utilities cutoffs as bills soar

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