As the carbon tax is about to be introduced on July 1, 2012, we take look at how it will impact Australian families and what sort of compensation will be available.
The carbon price will be paid by around 500 of Australia's largest polluters. They will need a permit for every tonne of carbon pollution they produce. The cost of that permit is the carbon price.
Will prices go up?
Some businesses will pass on the carbon price, leading to modest rises in prices. The federal government says in 2012-13, the cost of living is expected to increase by 0.7 per cent.
On average, food will go up by less than $1 per week for households, the government says.
By how much is the price of living per family estimated to grow per week as the result of a carbon tax?
The federal government says average weekly household expenditure will go up by around $9.90, including $3.30 per week on the average electricity bill and $1.50 per week on the average gas bill.
Will it cost more to drive to work?
The carbon price will not apply to the price of fuel that households pay at the petrol bowser.
What sort of compensation will families receive?
On average, households will receive $10.10 per week in assistance.
The federal government says a family earning an income of around $100,000 who has two teenagers is expected to face an average cost of living impact of $653 per year. This family will receive assistance of about $679 per year made up of approximately $73 extra in payments and $606 in tax cuts.
Who will be eligible for tax cuts under the carbon tax?
From 1 July 2012, all taxpayers with incomes of up to $80,000 will get a tax cut, with most receiving at least $300 per year.
Further tax cuts will be delivered in 2015 for all taxpayers with incomes up to $80,000, with most receiving a tax cut of up to $385 in total.
Age pensioners (including part-rate pensioners) will receive assistance equal to a 1.7 per cent increase in the maximum rate of pension. The government says this is an annual increase of up to $338 for singles, and $255 for each member of a couple.
Family Tax Benefit
All families receiving Family Tax Benefit Part A will get an increase, worth up to $110 per child per year.
All families receiving Family Tax Benefit Part B will get assistance equal to a 1.7 per cent increase in the maximum rate, worth up to $69 per family per year.