More than 150 accommodation providers in holiday destinations throughout rural and regional Western Australia have been the subject of a major Goods and Services Tax investigation completed by the Australian Competition and Consumer Commission, ACCC Chairman, Professor Allan Fels, said today.
"Complaints from consumers about excessive price increases by resorts and other holiday accommodation providers from 1 July 2000 prompted the investigation by the Perth office of the ACCC", Professor Fels said. "Many of the holiday destinations were promoted in a 'Winter Breaks' brochure distributed widely throughout the state.
"Thirty-five accommodation providers were found to be quoting price increases of more than 10 per cent from 1 July 2000. Under legislation administered by the ACCC businesses are prohibited from using the introduction of the New Tax System as an opportunity to engage in price exploitation. This legislation requires businesses to pass on the full benefit of any savings associated with the New Tax System and limits price increases to levels that will maintain net dollar profit margins.
"Hotel and motel accommodation prices are expected to increase by an average of between 7.5 and 9.0 per cent with the introduction of the New Tax System.
"Fifteen of the accommodation providers investigated by the ACCC acknowledge that their price increases had been excessive and have undertaken to amend prices to ensure the full benefit of any tax savings are passed through to consumers. A further 12 providers have substantiated the price increases due to factors unrelated to the New Tax System.
Eight are still to substantiate their proposed increases.
"This investigation serves as a reminder to all businesses that savings associated with the New Tax System must be passed through to consumers.
"The investigation also confirms that action will be taken by the ACCC to ensure compliance with the Trade Practices Act in rural and regional Australia.
"The ACCC is pleased with the cooperative response from the accommodation providers involved in the investigation and welcomes the lower prices that will be paid by consumers".