By Colin Brinsden, Economics Correspondent
At face value, consumers would appear to be the biggest losers in the Carbon Pollution Reduction Scheme (CPRS) deal drummed up between the government and opposition this week.
To pay for the billions of dollars of extra support for the coal and electricity industries during the CPRS "transitional" period, the government's household assistance package has been slashed by $5.76 billion out to 2019/20.
Those fiends on Capital Hill.
But suddenly everyone is an expert about how much impact the CPRS will have on the cost of consumer goods, throwing all sorts of numbers around with gay abandon.
Is this the death of the Australian civilisation as we know it, because we won't be able to afford the price of a loaf of bread because of that, that, that tax?
The truth is, nobody really knows what the price of electricity, or the carbon price, or the Australian dollar will be in 10 years' time.
Or even the price of the said loaf of bread.
Everything is an assumption, estimate or a guess.
Even with nearly $6 billion chopped from the household package, it still leaves a hefty $49 billion of assistance over ten years.
The government says it has been able to make the adjustment because the assumption for the carbon price in 2012/13 has been lowered to $26, rather than the $29 that was estimated in the May budget.
And this is due to the appreciation of the Australian dollar.
Finance Minister Lindsay Tanner concedes that predicting the long-term performance of the Aussie dollar is not an "absolute precise science".
"Nobody can say exactly what the value of the Australian dollar will be in 10 years, but the point is that the fundamentals that drive the value of the dollar in Treasury's assessment have obviously shifted," he told ABC radio in Thursday.
But the key point is that the government is guaranteeing that some 90 per cent of low-income earners - or 2.6 million households - will be compensated by 120 per cent during the transitional period, meaning they'll get more than they lose under the scheme.
Fifty per cent of middle income - 1.7 million households - will also be fully compensated, while 97 per cent would receive some sort of direct cash assistance.
And that is guaranteed, Mr Tanner says.
Because these assistance payments are indexed to the consumer price index (CPI), upfront assistance will automatically rise in line with the increasing carbon price.
Treasury estimates that average cost of living for households will be $624 more in the first two years after the CPRS is implemented, or $12 a week.
Electricity prices will rise seven per cent in 2011/12 and 12 per cent in 2012/13 under their assumptions, while gas prices gain four per cent and seven per cent, respectively.
Food prices are expected to edge up by less than one per cent.
It means a household with an income of $100,000 with two children would in 2012/13 receive assistance of $1,014, even though the cost from the CPRS would be an estimated $976 - a difference of $38.
That amounts to nearly a baker's dozen - 13 - loaves of free bread, one assumes.
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