FAMILIES earning more than $110,000 will feel the pain of Julia Gillard's $8 billion-a-year carbon tax gamble.

Households face a $9.90 a week jump in the cost of living, or a 0.7 per cent increase. Electricity will go up $3.30 a week and gas $1.50.

But tax cuts and increases in welfare and family benefits will deliver average compensation of $10.10 a week.

Special report: Carbon tax bottom line

The PM said four million lower income earners would be better off and nine out of 10 households will get aid next year to offset the $23 a tonne carbon tax on the nation's 500 biggest polluters, which begins on July 1.

Under the tax, single mums on $45,000 could be up to $1174 a year better off, and families earning $80,000 a year and with two children will be $9.83 a week better off. But three million families will be worse off.

"There's no money tree, there's no endeavour here to try and pretend that everybody is better off," the PM said.

Read Gillard's address to the nation in full here

Read Abbott's address to the nation in full here

The Government said prices at the supermarket would barely move with bread and milk up by 1c, a block of chocolate and eggs rising about 2c and a lamb chop costing 10c more.

But 80 per cent of people who voted in a national poll at heraldsun.com.au yesterday rejected the carbon tax; and 70 per cent - 15,866 people - said they planned to vote for the Coalition at the next election.

Figures released by Treasury show the $23-a-tonne tax, due to begin next July 1, will push up electricity prices by 10 per cent and gas by 9 per cent, but food by only 0.4 per cent.

The Government says compensation will mean the average household will get back $10.10 - and be 20c better off a week under the deal.

But the real impact on families will vary greatly.

A double-income couple on $120,000 with one child under five and another under 12 will get $306 a year in tax cuts and higher welfare but the carbon tax will push up their cost of living by $696, leaving the household $390 a year - or $7.50 a week - worse off.

A double-income couple on $120,000 with one child under five and another under 12 will get $306 a year in tax cuts and higher welfare but the carbon tax will push up their cost of living by $696, leaving the household $390 a year - or $7.50 a week - worse off.

If the family income is $140,000 they will be $486 worse off, $9 a week. But the same family earning $80,000 will be $511 a year, or $9.83 a week, better off.

Ms Gillard said the Government had structured the package to help low and middle-income earners.

"Not everyone will be financially better off. There is no money tree. The Budget has to add up. But I want people who need help most to get the help they need," the PM said.

All single-income families with two children aged under five years and earning up to $75,000 are ahead, some by $9.65 a week. But once their income tops $80,000 they are worse off and at $100,000 they will be $3.25 a week behind.

A single parent with a child under five on $45,000 is one of the biggest winners - $1174 more a year or $22.58 a week better off.

But on $65,000 that family is worse off.

Single people with no kids earning up to $45,000 come out ahead but those earning above $85,000 are among the biggest losers as they get a tax cut of just $3 a year but face a cost of living hit of hundreds of dollars. At $120,000 the single person is $11.77 a week worse off.

Ms Gillard said the tax was the "foundation stone" of a clean energy future that would deliver more jobs, boost renewable energy and cut 160 million tonnes of carbon pollution by 2020, "the equivalent of taking 45 million cars off the road".

In a deal struck with the Greens and independent MPs, Ms Gillard unveiled a new target to cut emissions by 80 per cent of year 2000 levels by 2050.

A new $10 billion fund will be created to invest in renewable energy projects.

The Government has used the carbon tax package to deliver a massive change to the tax system.

From July 1 the tax-free threshold rises from $6000 to $18,200.

Everyone earning up to $80,000 gets an income tax cut, averaging about $300 a year - $5.77 a week.

The package also includes $9.2 billion for jobs and industry assistance with an extra $300 million for steel and $1.3 billion for coal.

hudsonp@heraldsun.com.au