The State Government says it will increase electricity prices in the next budget on top of the price rises it says will result from the Commonwealth's carbon tax.

The WA Premier Colin Barnett says on current estimates the carbon tax will add seven per cent to electricity prices which he says will be passed on to consumers.

"It's a tax on electricity consumers and it's a Commonwealth tax, not a state tax," he said.

The Premier says the carbon tax will not deter the State Government from increasing electricity prices on its own account by up to five per cent in the next state budget.

The Opposition Leader Eric Ripper says electricity prices should be frozen.

"Mr Barnett should not be increasing electricity prices beyond what's covered by the carbon tax compensation," he said.

Earlier today, the Prime Minister Julia Gillard indicated the carbon tax would forge a new path for Australia.

"It's about our nation seizing a clean energy future," she said.

But, Mr Barnett does not think the tax will be effective.

"I just don't think it will have the effect on reducing carbon emissions that people hope it would," he said.

"We would be better off as a country using more natural gas in power generation, we can be certain of the result that would dramatically reduce carbon emissions."

The WA Chamber of Commerce and Industry says the carbon tax will punish business and do nothing to protect the environment.

The chamber's chief executive James Pearson says the tax will damage the competitiveness of Australian businesses because trading partners and competitors do not have a price on carbon.

He says Australia's global emissions are dwarfed by those from countries that are not planning to introduce the tax.

The Construction, Forestry, Mining and Energy Union has a differing view.

Its national president Tony Maher says the tax will not have the impact alleged by its opponents.

"It's not meant to change behaviours, it's not meant to adversely impact consumers or jobs," he said.

"That's why the compensation packages in both areas basically wrap up heavy industry in cotton wool, wrap up consumers in cotton wool, and that's a good thing."

The carbon tax passed the federal House of Representatives by 74 votes to 72.

It heads to the Senate where it is expected to pass next month with Green support.