The consumer watchdog is expecting a flood of complaints from people worried about price gouging before the launch of the carbon tax and is urging consumers to come forward if they suspect they are being ripped off.
In a speech in Perth yesterday, the Australian Competition and Consumer Commission chairman, Rod Sims, warned businesses against using the carbon tax as cover for unjustifiable price rises. Any business that blamed price rises on the tax would need to be able to justify them, he said, as he put businesses on notice that the ACCC would scrutinise increases with the same rigour it did when the GST was introduced in 2000.
He later told the Herald the ACCC was expecting a high volume of complaints from consumers. ”I don’t think we’ll have any problem getting consumers to complain about this,” he said. ”They’re going to come in with all sorts of things. Consumers are going to be extra sensitive as the date approaches and we’ll get a lot of complaints.”
The watchdog has already caught out businesses trying to profiteer from the carbon tax, including taxi drivers and a bottle shop that raised prices and blamed it on the tax, even though it does not begin until July.
Mr Sims stressed that businesses - provided they were not subject to price regulation - were generally free to raise and lower prices as they saw fit and were not compelled to justify them. ”What you can’t do is mislead people into accepting it because they think it’s due to a carbon price and it’s happening everywhere.”
Businesses could be slapped with court-imposed fines of up to $1.1 million for serious breaches. The ACCC can also issue infringement notices of $1320 for individuals, $66,000 for public companies and $6600 for other companies.
The ACCC is regarded to have effectively kept a lid on price gouging following the introduction of the GST through then chairman Allan Fels’s strong public warnings to business.
Consumers could email the ACCC or call a hotline if they were suspicious. Mr Sims declined to say what consumers might consider an excessive rise but said prices should not rise too much.
”Really, it’s a lot to do with energy prices, particularly electricity,” he said. ”If you are dealing with a sector that doesn’t have a very large electricity cost, then it’s hard to see how there’s going to be very large price increases. If people say, ‘I’m putting up my price 1 or 2 per cent because of the carbon price, that’s probably not much of an issue, but where they talk about large numbers, short of being in the electricity industry, they now have to justify that.”
The opposition climate change spokesman, Greg Hunt, said it was ”appropriate” for the ACCC to take action but said the government was trying to dampen the reaction to carbon-related price rises. ”It’s one thing to protect against price gouging but another entirely to scare small business off providing legitimate information about the effect of the carbon tax on prices.”
The parliamentary secretary to the Treasurer, David Bradbury, said the government had given the ACCC $12.8 million for the crackdown. ”While we recognise that the vast majority of businesses will do the right thing, the government has provided this funding to help stop the small number of businesses that may try to take advantage of their customers,” he said.
