Carbon tax predicted to have little impact on food prices

Posted by AFN Staff Writers on 20th September 2011

Projections of how carbon tax will affect commodity prices have been released through the Australian Government Treasury office. In contrast to goods such as electricity and gas, food prices are estimated to increase minimally.

According to the Treasury’s new carbon price model, the majority of food product prices will rise. According to the Treasury’s carbon pricing report, the impact of carbon tax on the price milk is estimated to be the equivalent of a 1 cent price rise.

Fruit, vegetables, meat, seafood, and other dairy products would see a price increase of 0.4 per cent. Takeaway food and restaurant meals would, on average, increase in price by 20 cents, the report estimates.

According to the Treasury report, “The largest price increases will be for goods with a high emission intensity such as electricity and gas. Most other products, such as food, will hardly be affected.

“Impacts on individual households will depend on the specific goods and services they typically consume and how easily they can change their consumption in response to price changes.”