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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 dollars a 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.
- AAP
