Ratepayers to feel $10m heat of carbon tax

Hunter councils are braced for a combined carbon tax bill of well over $10 million in the next financial year.

Ratepayers will be hit in the hip pocket as the councils pass on tax increases on fuel, electricity and waste.

The federal government's carbon tax kicks in on July 1, with councils crunching the numbers to determine how they will fund the impost.

Bigger councils such as Newcastle, Lake Macquarie and Maitland are expecting bills well into the millions, while Muswellbrook and Singleton, whose landfill emissions fall short of the taxable threshold, will face lower charges, but will still have to pay massive taxes on landfill sites, power and fuel.

Maitland mayor Peter Blackmore said the tax would have an "incredible impact" on the region's ratepayers.

Cr Blackmore said he feared most councils were not fully aware of how the tax would affect their bank balance.

"Ultimately council will get the blame for stinging their ratepayers, even though this is a federal government tax, so it's a no-win situation for us. We have to fork out the big bucks to the government and the ratepayers will have to help us foot those costs."

Cr Blackmore said his council would pay $2.2 million in tax on its waste depot next year.

"Then on top of that we have extra taxes placed on street lighting, lights at sporting fields and in council-owned buildings as well as fuel costs for vehicles," he said.

"I'm sure ratepayers don't realise what they're going to be hit with and I can't understand why there hasn't been a concerted effort by the community as well as the opposition to say this is what it's going to cost."

Federal Climate Change Minister Greg Combet said the effect of the carbon tax on local governments would be "relatively small", with the impact to be a 0.7 per cent increase in overall prices, which include impacts on council rates or waste levies.

He said councils could apply for grants under the $200 million Community Energy Efficiency Program.

Lake Macquarie City Council has calculated the effects the tax would have on its budget and has made a number of adjustments to offset the costs, which are expected to be an extra $250,000 in its first year.

Manager sustainability Dr Alice Howe said staff were looking at ways to offset the impact of the tax estimated at $1.5 million for total waste liability.

"Council's landfill operations will be subject to the tax," Dr Howe said.

"Council has a large fleet of vehicles and we expect off-road fuel costs to increase by about $12,000 this year.

"By 2014 when on-road heavy vehicles are included, we estimate it will increase by $90,000."

She said electricity prices would also increase and while it is difficult to determine it is likely to be between $90,000 and $250,000 a year.

To offset the costs the council is investigating potential for revenue through carbon farming and biodiversity funds and is competing for structural adjustment funding through the federal government's Low Carbon Communities program.

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