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A new analysis has revealed that Australia's 2.9 million low income households will be better off under the Carbon Pollution Reduction Scheme household assistance package.

This analysis shows that on average, low income households will be ahead by $190 per year under the Carbon Pollution Reduction Scheme.

And for the first time, the analysis identifies the number of low income households set to benefit in each State (see table below).

Under the Carbon Pollution Reduction Scheme, Australia's biggest polluting companies will have to pay for their carbon pollution for the first time.

As some of those costs will be passed on to consumers, direct cash assistance will be provided to most Australian households to help with cost increases.

At the same time households that use goods and services that create less carbon pollution will automatically pay less.

The equation for the family budget is simple - the greener your home is, the more cash you'll save.

Easy everyday things like switching off appliances you're not using, switching the air con off and opening windows for ventilation and choosing energy efficient products will all add up over time.

But this new analysis shows some lower income families will really be able to cash in, because even before they take any action to reduce their energy consumption, they'll already be compensated by more than the estimated impact on their costs.

Pensioners, seniors, carers and people with a disability will be fully compensated with direct cash payments.

All low income households will be fully compensated with direct cash payments or tax breaks.

In fact, 90 per cent of low income households will recover 120 per cent of the cost.

This new analysis shows that the average price impact for low income households is $420, while the average annual assistance is $610.

In other words, on average low income households are $190 better off under the Carbon Pollution Reduction Scheme.

That means they'll be ahead before they even look at doing simple things like turning off appliances that aren't in use such as the second fridge, or using energy-saver light bulbs.

In addition to the gains for low income households, 97 per cent of middle income households will receive some form of direct cash assistance under the Scheme.

Around half of these middle income households will be fully compensated for cost increases flowing from the CPRS.

The Opposition have spread misinformation around about the Rudd Government's efforts to tackle climate change, but the fact is lower and middle income households will be compensated by the Government for the expected price rises under the scheme.

By contrast, the Opposition Leader, Mr Abbott, is not offering any compensation at all for low and middle income families, and no compensation for older Australians.

There are two simple facts nobody can avoid.

The first is that there is no cost free way to tackle climate change.

The second is that Mr Howard, Mr Costello, Mr Turnbull and the Rudd Government all chose a CPRS to act on climate change because:

• It is the cheapest most effective way to reduce carbon pollution;
• It puts a hard limit on emissions; and
• It funds compensation for families.

Over thirty countries, including all of Europe, Japan, the United States of America, and New Zealand have either introduced or are introducing a CPRS.

Low income households by State/Territory

New South Wales

860,000

Victoria

710,000

Queensland

630,000

South Australia

280,000

Western Australia

310,000

Tasmania

90,000

ACT and NT

50,000

All*

2,940,000

*Components may not add to total due to rounding

Source: STINMOD estimates for 2012-13

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