Oct 24, 2012

CPI higher than expected — but don’t blame the carbon tax

Inflation has come in higher than expected at 1.4% for the quarter -- but electricity companies, not the government's carbon tax, are the culprits.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

Blame higher electricity charges, not the carbon tax. That’s the message from today’s consumer price index data and a speech by a key regulator.

Today the head of the Australian Competition and Consumer Commission, Rod Sims, is claiming in a speech that the electricity pricing rort is costing Australian consumers $3 billion in much higher than needed charges, a cost which we also saw today has leaked into the cost of living with the CPI  jumping a higher than expected 1.4% in the three months to September, against a forecast rise of 1%. The 1.4% rise followed a 0.5% rise in the June quarter and made the annual rate to September 2.0%, up from the 1.2% rise in the 2011-12 financial year.

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3 thoughts on “CPI higher than expected — but don’t blame the carbon tax

  1. Chess C

    “Blame higher electricity charges, not the carbon tax.” Said without a trace of irony.

  2. Chess C

    Glenn, just to spell it out. It’s indisputable that the near doubling of electricity prices over the last 5 or so years (excluding the price rise in July) has had nothing to do with the carbon tax, and everything to do with price gouging and (arguably) overinvestment by the power companies. However, the 15% price rise in electricity in July was directly caused by the carbon tax. My electricity company usually raises their prices in January, but this was a special price rise, just for the carbon tax, and they even sent me a letter saying so.

    On the upside my power bill actually went down. I opted out of green electricity, since the elecricity company couldn’t explain why they were passing on the carbon tax price rise to carbon-emissions-free electricity. And secondly there are companies which install energy saving switches in your home free of charge (they get a payment from the Victorian government for doing so). These energy saving switches cut my power usage by about 20%.

    I agree, that the doomsayers’ predictions of carbon tax inflation have been shown to be exaggerated, to say the least. But denying that the price rises in electricy and gas have been caused by the carbon tax is a little bit disingenuous. Also, I think we need to wait about one year, until we can definitively see how the carbon tax associated costs filter through the supply chain.

  3. AR

    And what hope that the electorate will grasp/believe the simple fact that the gouging is not due to the MM’s oft repeated line BigBadTAX, ably assisted in this deception by the shoutjocks?

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