Here is Peter Martin:
Last July, Treasury said the tax would push up the consumer price index 0.70 percentage points, adding $9.90 per week to average household costs. In return, households were given compensation averaging $10.10 per week.
But 0.70 percentage points looks like being an overestimate. Inflation figures for the September quarter – the one that encompasses almost all of the electricity and gas price rises – show them adding 0.44 points to the CPI. It’s a big figure, but not that much bigger than the usual September quarter slug.
He is discussing one quarter – compare that to what Treasury said (emphasis added):
Most of the effect on consumer prices occurs in the first year of the fixed price period. Overall consumer prices increase by 0.7 per cent in 2012-13 under a $23 carbon price. On average, household spending is expected to increase by less than $10 per week. The consumer price impact on different goods depends on the emissions intensity of their production. Household expenditure, on average, is expected to increase by $3.30 per week due to higher electricity prices and by $1.50 per week due to higher gas prices.
Then we have this footnote to table 5.19:
The dollar per week impacts are the average across households, not the impact on an average household.
Not quite what Martin describes.
Martin is one of the government’s go-to journalists. For example, he had access to the Henry Report well before it was released. He is often used as a conduit of information from Treasury to the public. Nothing wrong with that – journalists have sources and angles, and that is his angle. I raise the point because this article must be seen in that context. Government (and Treasury?) would like us to believe that the carbon tax is on track, the modelling all fine, and concerns about utility prices overblown.