The Australian government has mellowed down its carbon tax policy that would not be too much of a burden to small and medium enterprises. Industries affected by the carbon price had been reduced to 500 from the previous 1000, the government said.

"The people paying the price per tonne are big polluters and a very limited number of companies," Australia's Prime Minister Julia Gillard said in an interview over Sky News.

Ms Gillard clarified that it would not be like the GST where small business had a new business activity statement and compliance issues.

"There's nothing new they need to do as a small business. There's no new form, no new paperwork, no more red tape. They don't have to do anything except keep operating their business."

She did not want to give the specific numbers as to how much per tonne will the equivalent carbon tax be priced because they are still deliberating it. However, initial estimates have shown that Australian households would still likely need to brace for the worst.

Australian households

Australian families would have to add another $7.80 in their weekly budgets or close to $406 a month if the carbon tax price tag will be pegged within the range of $20 to $23.

According to the Australian government, some 70 percent of domestic households or nine out 10 will be subsidized through tax cuts and pension increases to cover for the additional costs incurred if the carbon tax will be implemented.

Prime Minister Gillard said in an interview over Sky News that she would yet to divulge on the final numbers, but has agreed that there would be additional costs precisely on "the big polluters."

"Yes costs will be passed through. I'm absolutely transparent and upfront about that and that's why we are providing tax cuts and pension increases and family payments increases to nine out of 10 households."

Reports said that if it is $23 a tonne, it will be the highest price per tonne of emission in the world. In Europe it is equivalent to $17.60 in Australian dollars, in New Zealand it is $7.63.

"We have thought long and hard about the right price to ensure that we reduce carbon pollution but also the right price to ensure that we continue to enjoy an economy that is the envy of the world," she said.

Fearing further backlash from the Australian public, especially from industry sectors, the Australian government led by Labour Party is seen fine-tuning the proposed legislation further.

Next week an information campaign worth $12 million is said to be launched in support of the carbon tax.