Carbon trading could hurt aged care

A leading economist warns that aged care providers would need to be compensated for rising energy costs from 2010 onwards.

A leading economist has told the ABC that aged care services will need to be heavily compensated when the Rudd Government’s proposed emissions trading scheme (ETS) is introduced.

The Executive Director of the Australia Institute, Ian Deniss told ABC Radio’s AM program that overall, the country’s community welfare sector will require over $1 billion in compensation to cope with the ETS.

Mr Denniss said that along with scout groups and surf life saving clubs, aged care providers will be particularly affected.

“It is not like the car industry or Qantas that can just jack up their prices. These are people delivering services to the most vulnerable people in the community,” said Mr Denniss.

“If you have got hundreds of people in an aged care home then that’s a lot of hot water systems, that’s a lot of air conditioners, it’s a lot of heaters and it’s a lot of other energy intensive appliances being used 24 hours a day, seven days a week.”

In response to Mr Denniss’s research, the industry body for aged care providers in Victoria called on the Federal Government to “protect” providers.

Aged and Community Care Victoria CEO, Gerard Mansour said the industry is doing its bit to go green but increased energy costs could be crippling.

“This is a gap which needs to be addressed by the Federal and State governments as a matter of urgency,” said Mr Mansour.

“Surely this is a great opportunity for the Commonwealth to use the new co-operative Federalism to deliver a host of benefits to the sector.”

At the same time, a climate researcher from the Brotherhood of St Laurence has told the Herald Sun that people on low incomes in the community – such as aged pensioners – will suffer most from the introduction of an ETS.

“When the costs are passed on, low income households will be disproportionately impacted by the ETS,” the Brotherhood’s Damien Sullivan told the paper.

“That is because a higher proportion of their weekly expenditure is on goods and services with a higher carbon content.”

The government has promised compensation for low income earners and pensioners but Mr Sullivan said it must be comprehensive.

“The type of compensation we would want…is for some sort of large scale household energy efficiency program but also compensation through the tax and transfer system,” said Mr Sullivan.

The Commonwealth’s ETS is due to be rolled out in 2010.

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