THE Federal Government's carbon tax could add $40 to Ipswich residents' household waste charges and a further $1 million to basic council services.
Ipswich City Council is planning its next budget and Mayor Paul Pisasale says the carbon tax is adding a heavy burden.
He has likened it to the GST.
To make matters worse, the council is still waiting for promised compensation from the Federal Government.
He's afraid if the government doesn't provide compensation, the council will have to pass on costs to ratepayers.
"Already we're being told $26.70 is being added to the cost of a wheelie bin because of the carbon tax, and $10.55 to cover the other council services we deliver. That's a total increase of $37.25 per household per year," he said.
"Maintenance of roads and parks will go up $600,000 and street lighting will go up $400,000.
"We haven't seen one cent from the Federal Government that will reimburse us for those costs."
Cr Pisasale said at least half the council's rate increase could be because of the carbon tax.
"It's like another GST," he said. "Families are hurting out there and the last thing I want to do is make it worse. To keep the rates affordable, we'll have to start looking at trimming back community programs.
"The government is sending payments out to help families but they will be chewed up in one hit if there's no compensation.
"It's giving with one hand and taking back with the other and there's no effect on the environment."
Federal MP Shayne Neumann hit back at the Mayor's claims, saying there was "a lot of money on the table from the Federal Government for the council to reduce their costs".
"That's nonsense I refute the claim," Mr Neumann said. "They will get access to increased financial assistance grants, for example, of $4.3 million for the 2011 year, but there will be an increase of 50% they will get as well.
"I'm a bit surprised the council would say that because they have a submission in to the Federal Government for efficient street lighting through the Community Energy Efficiency Program."
Mr Neumann said he also had had discussions with council environment committee chairwoman Heather Morrow about funding the council could get from Low Carbon Australia.
"That's two examples. A third example is carbon farming, where they can get credits in relation to those types of initiatives and waste management," he said.
"The fourth example is the family assistance payments, and I would utterly reject any suggestion that up to 50% of the council's rate increase would be to do with the emissions trading scheme. I just can't see how that is possibly the case based on treasury modelling in relation to how the carbon price would affect people's budgets.
"There's also the Low Carbon Communities Program. If they increase rates, that's not the fault of the Federal Government."
The Local Government Association of Queensland says it is in the process of examining the full impact of the carbon tax on councils.