CANBERRA - The Australian Government will need to pay low-income households between A$50 and A$185 ($63 and $232) a year to compensate them for higher energy prices caused by a planned emissions trading scheme, a report says.
The federal Government is tipped to rake in billions of dollarsa year from the sale of emissions permits when the scheme begins operations in 2010.
The CSIRO and Australian National University report - commissioned by the lobby group The Climate Institute - said there was a chance very high carbon prices could mean a deterioration in basic affordability for a number of years after the introduction of emissions trading.
An "affordability payment" should be made to offset price rises for the most vulnerable.
This could be in the form of a direct payment, increases in social security, or cuts to income tax. The institute says the Government should set aside A$350 million a year to insulate low-income households from energy price rises.
Households could be paying an additional A$445 each by 2025 and the government had a role to play in shielding people, it said.
"For low-income families, concerns about the increased cost of energy ... are real but can be overcome," the institute said.
