Our financial guru was in the lock-up with the Gillard government's Carbon Tax papers and how has now written up his explanation of the most important factors for everyday Australians.

The Carbon Tax program outlined by the Gillard Government is so generous that it borders on being too good to be true… or a bribe to get the system through. The Government has gone out of its way to ensure most Australians and businesses will feel very little impact of the carbon tax impost with compensation covering any pain.

The most intriguing initiative is that the first 9 months of compensation will be paid in advance. The tax will start on July 1 next year but the first 9 months will be paid next May/June.

In a nutshell;

. 4 million Australian households will make a 20 per cent profit… that means they’ll get 20 per cent more compensation that what their costs will go up.

. 2 million households will have their costs covered.

. 2 million households will make a loss because they won’t be fully compensated.

. 700,000 of the richest households won’t get any compensation at all.

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THE CARBON TAX

. $23 a tonne

. for average households costs will increase $9.90 a week but compensation will be $10.10

. 9 out of 10 households will receive assistance… and 2 out 3 of those households will receive enough to cover the extra costs.

. 500 companies and 3 million households will be worse off.

. aim is to reduce emissions to 5 per cent below year 2000 levels by 2020 and 80 per cent below 2000 levels by 2050.

. electricity generates a third of our emissions.

ECONOMY

. Budget will take a $2.68 billion hit this year and $400-500 million/yr over next 2 years.

. will add 0.7 per cent to the CPI in it’s first year… the GST added 2.5 per cent.

. electricity prices will go up 10 per cent, gas 9 per cent.

. will slow average income growth 0.1 per cent a year… the ageing population will slow income 0.3 per cent.

TAX BENEFIT

. tax free threshold tripled to $18,200 a year from July 1, 2012.

. regular wage earners below $18,200 will have no tax withheld.

. 1 million Australians will not have to lodge a tax return.

. but middle tax rate ($37,000-$80,000) will rise from 30-32.5 per cent… to stop over $150,000 earners getting a benefit

. all taxpayers under $80,000 a year will pay less tax.

. no Australians will pay more tax

FAMILIES

. with 2 children will up to $220 in extra Family Tax Benefit A and other families will get $110.

. extra $69 in Family Tax Benefit Part B

SENIOR AUSTRALIANS

. pensioners and self funded retirees will get up to $338 a year for singles and up to $510 a year for couples.

. will get lump sum advance of $250 in May-June 2012… basically getting 9 month payment in advance.

. 90 per cent of pensioners will make a profit… receive more compensation than be hit with extra costs

. Commonwealth Seniors Health Card (mainly self funded retirees) will get the same assistance as pensioners.

. Self funded retirees will get benefit of increase in tax free threshold.

SINGLES

. get the tax cuts.

. People on Assistance will get $218 for singles up to $390 for couples.

SMALL BUSINESS

. small business instant asset write-off threshold will rise from $5000-$6500

. no extra paperwork

. no compensation for increase in electricity costs … go up 10 per cent.

NEW FUNDING

. $10 billion Clean Energy Finance Corporation

. $3.2 billion Australian Renewable Energy Agency