The Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (the Act) which received Royal Assent on 17 July 2014, gave the ACCC powers under the Competition and Consumer Act 2010 (CCA) to monitor prices and ensure cost savings attributable to the carbon tax repeal were passed on in the regulated industries.
In addition to its existing powers, the ACCC’s role and powers during the carbon tax repeal transition period, 1 July 2014 to 30 June 2015, included:
- monitoring prices of regulated goods (electricity, natural gas and synthetic greenhouse gases (SGG) and liable entities (price monitoring)
taking action against businesses supplying regulated goods that attempted to exploit other businesses and consumers by failing to pass through all of their cost savings from the carbon tax repeal (carbon tax price reduction obligation)
taking action against businesses that made false or misleading claims about the effect of the carbon tax repeal or the carbon tax scheme on the price for the supply of goods or services (false or misleading representations).
The ACCC was also required to issue carbon tax removal substantiation notices to certain suppliers of regulated goods to explain how the carbon tax repeal affected their input costs and how reductions in their input costs affected their prices for these regulated goods.
Electricity and natural gas retailers, and bulk SGG importers in turn were required to provide to the ACCC carbon tax removal substantiation statements. These set out details of their cost savings resulting from the carbon tax repeal that were, or would be passed onto customers. Electricity and natural gas retailers, were also required to send statements to their customers which set out estimated cost savings that would be passed onto them.
Post June 2015
The provisions under the CCA that prohibit misleading and deceptive conduct continue to apply to situations where businesses may be misleading consumers about the effect of the carbon tax, or its repeal, on their prices.
The ACCC was given formal monitoring roles in relation to the carbon tax repeal and was required to provide formal reports to the relevant minister.
Monitoring of prices, costs & profits to assess the general effect of the carbon tax scheme in Australia
Pursuant to the Treasurer’s February 2014 Direction under s 95ZE of the CCA, the ACCC was required to formally monitor prices, costs and profits to assess the general impact of the carbon tax scheme in Australia.
Carbon tax price reduction obligation
Following the repeal of the carbon tax, pursuant to s 60J of the CCA, the ACCC was required to report to the Minister for Small Business on its operations relating to the carbon tax price reduction obligation, including its monitoring role to assess the general effect of the carbon tax repeal on relevant prices.
Carbon tax price reduction obligation – publication