The Australian Competition and Consumer Commission has today advised that it has received over 630 complaints and enquiries about the carbon price since the commencement of the carbon pricing mechanism on 1 July 2012.
The highest category of complaints received has been about claims made by energy retailers, especially in relation to price increases on electricity bills. Over 250 consumers and businesses have reported concerns or asked questions about how the carbon price will affect their electricity and gas bills and whether the price increases communicated by energy retailers are appropriate.
“The number of carbon related complaints and enquiries received so far is not a large proportion of complaints to the ACCC, given that we received over 8350 general complaints in that period,” ACCC Chairman Rod Sims said.
“Although complaint numbers are low, we know these are important issues for people and we are working with businesses to ensure consumers are not duped into accepting a price increase they may otherwise question. While the ACCC does not have a formal price monitoring role and is not responsible for calculating what the carbon price will be for business, we are reviewing the claims made to ensure that they are not misleading or deceptive, including those made by energy retailers.”
“On the whole, the ACCC has not identified widespread issues and where there have been concerns the ACCC has worked with businesses to address them promptly. Overall, the number of complaints we have received about small businesses and small retailers has generally been low. However when any business attributes a price increase to the carbon price, they must not mislead consumers.”
“Claims must be truthful and have a reasonable basis.”
“A business that makes a good faith, reasonable approach to calculating the carbon price for their business has nothing to fear from the ACCC.” Mr Sims said.
After energy, the sectors that have been the subject of the most complaints and enquiries are landfill, building and construction and refrigerant gases – all of which may be directly affected by the carbon price in some way.
The ACCC notes there may be some confusion arising from reports about the variety of cost pressures that impact on businesses and why prices may rise. For example, a price may increase partly due to the carbon price and partly due to other, unrelated factors. What might look like a carbon price representation at first glance often turns out to be something different.
The ACCC urges consumers to shop around, think twice and ask questions about these claims.
Businesses have rights when dealing with their suppliers and the same rules, to not mislead in relation to the carbon price, apply to suppliers. The ACCC has published a series of Business Snapshots including one on dealing with suppliers.
An interactive online webinar for business on the subject will be hosted on the 16th of August. Interested parties may register via the ACCC website.
Background
Landfill: Complaints have been received in relation to price increases
The ACCC notes that calculating pass through costs associated with the CPM in relation to landfill is a very complex issue faced by local councils and landfill operators. These calculations are affected by factors, such as size of the operation, use of abatement mechanisms, any discount rates that may apply and the price of emissions in the future. Calculations are further complicated by the forty year decay period on landfill during which the operator is liable for emissions produced. As with energy retailers, the ACCC has been in contact with a number of local councils and industry associations to understand their approach.
Building and construction: Complaints have been received in relation to price increases
The price of materials used in the construction of residential and commercial dwellings varies from year to year with or without a carbon price, therefore isolating the effect of the carbon price may be difficult. The building and construction industry will face the CPM through the use of a number of materials that have a high carbon intensity (e.g. steel, glass and concrete) however the industry will also be compensated in some areas. The ACCC has and continues to have discussions with industry associations and particular building businesses about the claims they may have made.
Refrigerant gases: Complaints have been received in relation to price increases
The price of Synthetic Greenhouse Gases, or refrigerant gases, increased significantly from 1 July, as an equivalent carbon price applies to SGGs listed under the Kyoto Protocol. There are also indicators that price increases may be due to reductions in supply, increases in raw material costs, growing demand for refrigerant gases in emerging economies and some refrigerants having been targeted for usage reductions. The ACCC is considering the issues and will watch closely for price increase representations that attribute the entire increase to the carbon price.