The Australian Competition and Consumer Commission has finalised its formal carbon tax repeal monitoring role under Part V of the Competition and Consumer Act 2010 (CCA) on 30 June 2015, with its final carbon report provided to the Minister of Small Business, the Hon. Bruce Billson MP.
The report provides an update on the remaining industries under assessment in the June 2015 quarter and summarises the ACCC’s key findings from its monitoring activities since 1 March 2014.
“As a result of its monitoring activities, the ACCC is satisfied that all electricity and natural gas suppliers, and bulk synthetic greenhouse gas (SGG) importers have passed through to customers all cost savings attributable to the carbon tax repeal,” ACCC Chairman Rod Sims said.
“The ACCC is pleased with the high levels of compliance with the price reduction obligation, and therefore has not needed to take any enforcement actions relating to the price reduction legislation.”
The price reduction legislation’s focus on the regulated sectors and transparency requirements to substantiate cost savings, entities’ cooperative approach, proactive industry engagement and the assistance that the ACCC received from many agencies contributed to the high level of compliance that the ACCC observed.
The ACCC believes that, given all the available information, the Commonwealth Treasury’s estimated $550 cost savings to households is reasonable. The ACCC has calculated direct cost savings, ranging from $153 to $269, that have been passed through to customers by electricity and natural gas retailers.
In relation to SGGs, average prices after the carbon tax repeal, depending on the SGG type, range from approximately $8/kg to $34/kg at the bulk import level, compared to average prices of $38/kg to $109/kg during the carbon tax period. At the wholesale level, average prices after the carbon tax repeal, depending on SGG type, range from $14/kg to $33/kg, compared to average prices of $47/kg to $182/kg during the carbon tax period.
In addition to these cost savings, the ACCC has also seen cost savings across a number of sectors such as landfill, council rates and charges, food manufacturing, water charges, aviation fuel, liquid petroleum gas (for non-transport use) and transport (off-road vehicle, sea and rail fuel). The ACCC expects that these cost savings will flow down the supply chain throughout the economy over time and be passed through to customers as part of the normal market process.
A copy of the July 2015 report is available: Carbon tax price reduction obligation: the ACCC's operations June 2015 quarter
The ACCC will be reporting to Parliament by 17 August 2015 that:
- No entities were found to have engaged in price exploitation following the carbon tax repeal and accordingly, no penalties were payable pursuant to s 60CA of the CCA.
- Compliance with the carbon tax removal substantiation statement obligation has been strong.
On 17 July 2014 the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (the Carbon Tax Repeal Act) was passed by Parliament. The Carbon Tax Repeal Act amended the CCA, providing the ACCC with new powers as well as a continuation of its monitoring role, which commenced under a Direction issued by the Treasurer.
More information about the ACCC’s role in relation to the carbon tax repeal is available: Our role in carbon tax repeal.
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