ETS could impact on savings accounts

Mozo

Thursday 22 October 2009

The emissions trading scheme (ETS) could impact on people’s high interest savings, if one report is to be believed.

According to an AAP article, households may have to pay an extra $78 more for their electricity for the first year of the scheme.

This figure could increase to $146 in the second year, according to Meghan Quinn, the Treasury’s general manager of the macroeconomics division, who made the comments at a recent senate hearing.

She noted, however, that the figures may be over-estimated, as they were made on the basis of household spending almost five years ago – since which time the economy’s "emission intensity" has declined, the news provider reported.

Furthermore, she pointed out that it is also based on the notion of there being no modification in consumer or producer action.

"This is an assumption that the entire carbon cost will be passed through to consumers," Ms Quinn commented.

"It’s a sort of morning-after effect. In that sense you could consider it an upper limit."

Earlier this year, the Australian published an article noting the findings of Mick Keogh and Mandy Thompson of the Australian Farm Institute, which stated the ETS may result in higher food prices, which may be of interest to those with savings accounts.

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