The Australian Competition and Consumer Commission “will have additional powers to monitor prices to ensure that businesses pass on the benefits from the repeal of the Carbon Tax,” a spokesman for Mr Hunt said. Hugh Saddler, a principal consultant for energy analysts, Pitt & Sherry, said it had been “almost impossible” to see the carbon price footprint when it was introduced, and it will be no easier to tell the response if it is removed. The Australian Bureau of Statistics agreed. “The ABS is not able to quantify the impact of the introduction of carbon pricing, compensation or other government incentives and cannot produce estimates of price change exclusive of the carbon price,” the ABS said in a statement. “Similarly, the ABS will not be able to quantify the impact of removing the carbon price (if that were to occur).”

Gas price surge While consumers will see a benefit from lower electricity prices if the carbon price is eliminated, the benefit is likely to be dwarfed by other changes in energy prices, said Tony Wood, director of Grattan Institute's energy program. Wholesale gas prices will double in coming years, adding about $170 a year to average Victorian household bills, and up to about $100 for other states less dependent on gas for heating, said Mr Wood. (See Grattan's Getting gas right report.) That exceeds the $70 per year gas saving predicted by the Abbott government if the carbon price is removed. Electricity prices offer a more promising result, with power bills set to fall – regardless of the carbon price. Mr Wood said electricity prices rose by 10 per cent when the carbon tax was introduced in July last year, and that change would be reversed with its removal.

A much bigger impact, though, is likely if the Australian Energy Regulator adjusts the investment returns it permits for network spending on new poles and wires. The so-called “gold plating” contributed about half the increase of electricity prices over the past five years. “Network prices should actually be coming down,” dragging power prices with them, Mr Wood said. Opponents wrongly attributed all the increase in energy prices to the introduction of the carbon price, Mr Wood said. “You can hardly claim all the credit if [energy prices] go down.” Behaviour shifts Consumer response to higher energy prices had also been underestimated in the Coalition's calculation.

Mr Hunt said on Monday the carbon tax would do little to cut household electricity use because power consumption was “inelastic” to price changes. “It's a fundamental good. In economic terms it is inelastic,” he said. “But in household terms it is essential, and taxing an essential service hurts families, hurts businesses, hurts jobs and simply ends up diverting funds from other elements in a family's budget.” But an analysis of national accounts data by Fairfax Media finds a sharp drop in household electricity and gas use in the 12 months since the introduction of the tax in July 2012. After slipping at an average rate of 0.3 per cent per year in the five years before the introduction of the tax, household electricity and fuel use per person slid 3 per cent in the year after. Pitt & Sherry's Dr Saddler said research undertaken for the first year of the carbon price among consumers in a part of Sydney indicated the price elasticity of electricity was as high as 0.3 - or roughly twice the one-in-sixth ratio often cited for power use.

Loading Consumers were responding to a 15.6 per cent rise in electricity prices. While steep, the surge followed some big increases, such 12.3 per cent in the previous year, 6 per cent in a year earlier and 19 per cent one year furthur back. With Tim Colebatch and Peter Martin