http://www.abc.net.au/news/2012-07-01/carbon-tax-takes-effect/4102830

Both sides of politics have ramped up public pressure over the carbon tax as one of the most divisive pieces of government policy in recent times officially begins.

From today, just under 300 businesses will be made to pay $23 for for every tonne of pollution they produce.

They will receive some compensation in the form of tax offsets and credits, but still say they will have no choice but to pass on the cost to consumers.

The Government is also compensating low-income earners and says life will go on for Australian households.

But the Opposition argues it the tax is an unnecessary burden during tough economic times, and is rolling out an advertising campaign that highlights Prime Minister Julia Gillard's policy reversal.

Ms Gillard announced before the 2010 election that there would be no carbon tax under a government she led.

Today she again defended her decision to introduce a carbon tax, telling the ABC's Insiders program that putting a price on carbon will help protect the environment and strengthen the economy.

Opposition Leader Tony Abbott has promised to repeal the tax if the Coalition wins government, but Ms Gillard compared the carbon tax to the GST introduced by the Howard government, saying that once it was in operation it it was clear that there was no going back.

Ms Gillard says at the time she was very concerned about how the GST would impact households, but that Australians came to accept it.

"People have already seen pension increases and family payment increases and family payment increases and this assistance to families around the country will continue. Businesses have got themselves ready for carbon pricing. New investments are being made," she said.

But Mr Abbott maintains the carbon tax will have a negative impact on the Australian economy.

He told the Liberal Party's national conference in Melbourne yesterday that the Australian public can be "100 per cent certain" when he says there will be no carbon tax under a government he leads.

"It will raise every family's cost of living, it will make every job less secure but it won't help the environment," he said.

"Australia's domestic emissions will be 8 per cent higher, yes, higher by 2020 despite a carbon tax of $37 a tonne."

Today Mr Abbott reiterated he would repeal the carbon tax if the Coalition wins government.

He said the first item the Coalition would put before the parliament would be legislation aimed at removing carbon pricing.

The Government is using the landmark day to announce extra payments and incentives as a further attempt to counter any carbon tax pain.

From today, the tax-free threshold will triple translating into a tax cut for more than seven million people and some low-income family payments will also be boosted.

Businesses will also get relief in the form of offsets to tax losses against previous tax they have paid over the past two years and an instant asset write-off.

The Government is paying for the carbon tax compensation with revenue from the mining tax which will also start to bite into resources industry profits from today.

The Commonwealth will also collect a significant surplus boosting haul from the new means test of the private health insurance rebate.

But not everyone is happy.

Sydneysiders who oppose the tax marched through central Sydney today, chanting "axe the tax" and waving inflatable plastic bats with slogans calling for early election.

'Sky hasn't fallen'

Climate Change Minister Greg Combet says history will prove the carbon tax to be a manageable economic reform

Mr Combet says Labor has lost a lot of "political skin" over the controversial policy, but the carbon tax is "the right thing to do".

He says the carbon tax will create an instant tariff that will encourage the country's largest polluters to cut their greenhouse gas emissions.

"It is a pretty tough reform, there's no doubt about that, but that's because it is such an important issue," he said.

Mr Combet says senior Government ministers, including Trade Minister Craig Emerson, will be in Whyalla today to highlight that industrial towns are not shutting down.

The town attracted national attention last year when Opposition Leader Tony Abbott said it would be "wiped off the map" by the tax - a claim Mr Combet has ridiculed.

"I think Mr Emerson will be there with his tape measure making sure the sky hasn't fallen," Mr Combet said.

He says Mr Abbott's case against the carbon tax is a "complete sham".

But Opposition Climate spokesman Greg Hunt says the carbon tax will hit Australian businesses at "the worst possible time" and says consumers will feel the effects when they pay their bills.

"From today, every time you switch on a light, the computer, the heating, the cooling or even make a cup of coffee, you are paying the carbon tax," he said in a statement.

"For business, it comes at the worst possible time as manufacturers battle a high Australian dollar while their overseas competitors are given a further advantage by not having to pay the carbon tax."

Greens Leader Christine Milne has dismissed the idea that her party may have misplaced their efforts in negotiating the carbon tax with a Gillard minority government.

She echoed sentiment from the Prime Minister, saying Mr Abbott will not repeal the carbon tax if he takes government.

"Contrary to all Tony Abbott's claims, it won't be repealed in Australia and it is going to be his problem as to how he backs down or how the Liberals change their leadership," she said.

"It is an exciting day in Australia because this is it the day that we begin to seriously tackle global warming and to price pollution.

"We're going to see is quite a lot of innovation across Australia and you're going to see households, industries, people going out there creating new jobs, new ideas, and this is really the beginning of a much more positive future."

Nationals Leader Warren Truss says the carbon tax is not a "drop-dead event" but it is already hurting business confidence.

Mr Truss says business will become less competitive and less willing to to take on new staff.

"[The carbon tax] is the slow boa constrictor sapping life out of one business after another," he said.