The competition watchdog is warning small businesses to be ready to justify price rises if they seek to use the carbon tax as an excuse for rorting customers.
The Australian Competition and Consumer Commission expects consumer queries on price rises to become more commonplace from July 1 when the carbon tax kicks in.
But ACCC deputy chairman Michael Schaper said it would be unacceptable for businesses to lift prices and then attribute increases solely to the carbon tax without decent explanation.
The commission can take businesses to court if it believes they are misleading customers or acting deceptively, and the courts can impose fines of up to $1.1 million.
Dr Schaper said: ”If you say to customers ‘we’re moving our prices and we’re moving them because prices have gone up full stop’, then we’re not really worried about that because that’s how prices normally move up.
”But if someone says they’ve jacked their prices up by 20 per cent and it’s all due to the carbon tax, that’s the [concern].”
He said the ACCC had received about 250 calls this year from people either complaining about the carbon tax or with queries about how it will affect them.
But he expected that number to rise sharply over the second half of the year, especially if customers asked businesses to explain their price increases.
”Part of our brief is looking after consumers, so a lot of the time we’ll say ‘Just ask’,” he said.
”If you think it’s not a reasonable price, it’s not unreasonable to go back to someone and say ‘Why does it cost so much now?’
”That’s the trip for the small business operator - to be careful they don’t gild the lily and go ‘well, it’s all because of the carbon tax’, when it may be due to a whole bunch of reasons.”
The ACCC is preparing to consider a raft of complaints, just as it did when the goods and services tax was introduced in the late 1990s.
The watchdog investigated about 7000 GST-related complaints between 1999 and 2002 and obtained about $21 million in refunds for about 2 million consumers. It also initiated court proceedings against companies 11 times.
Dr Schaper admitted the complexities of the carbon tax meant it did not present the same ”mathematical formula” the GST did when determining whether businesses were rorting customers.
He said it was not inevitable that all prices would rise from July 1, but warned that small businesses had to consider how price increases would be perceived.
”A degree of honesty is important, especially for long-term customers … you might as well be upfront,” he said.
Dr Schaper, a former small business owner and adviser and previously the ACT small business commissioner, advised proprietors to check with suppliers, power companies, landlords and industry associations if worried about extra costs.
He also warned businesses to be wary of scammers offering compensation payments in exchange for access to bank account details.
