The Australian Competition and Consumer Commission (ACCC) has provided the second carbon monitoring report to the Treasurer, the Hon. Joe Hockey MP, in accordance with the Direction given to the ACCC on 18 February 2014. The report details the ACCC’s monitoring activities for the June 2014 quarter.
The ACCC has undertaken formal monitoring of the prices, costs and profits relating to the supply of regulated goods by corporations, and relating to the supply of goods by liable entities, to assess the general effect of the carbon tax scheme in Australia. This monitoring provides the ACCC with a snapshot of what was occurring before the carbon tax was repealed.
The ACCC is engaging with entities in relevant industries to understand how the carbon tax affected their prices, costs and profits, and the consequences of the carbon tax repeal. The carbon monitoring report details industry assessments and the ACCC’s expectations as to how the carbon tax repeal will affect different industries.
The ACCC will be contacting firms which represented to consumers that their prices had increased due to the carbon tax to see that their prices now fall. The ACCC will also selectively monitor prices in a number of industries including transport and manufacturing, as well as following up complaints received from consumers.
“The ACCC expects that cost savings arising from the carbon tax repeal will be passed through to consumers. The information obtained by the ACCC in its monitoring role, as well as through the new carbon tax removal substantiation notices and statements, will be used to assess any failure by businesses to pass through all carbon tax cost savings to customers,” ACCC Chairman Rod Sims said.
“With the repeal of the carbon tax, the ACCC’s role shifts to an enforcement focus. We are confident that we have the base pricing information and the appropriate enforcement powers to do the job assigned to us by the Government. We will be keeping a close eye on prices and where all cost savings are not passed through, or entities make false or misleading representations, the ACCC will use its enforcement powers,” Mr Sims said.
“Suppliers of regulated goods will be the ACCC’s main focus, as the carbon tax had a significant effect on pricing of these products. The ACCC is pleased to see the early commitment of energy retailers to pass through cost savings quickly including back dating these savings to 1 July 2014”.
A copy of the report is available at Monitoring of prices, costs & profits to assess the general effect of the carbon tax scheme in Australia
Information for businesses about their obligations under the carbon tax repeal legislation is available under Carbon tax repeal.
In the June 2014 quarter, the ACCC sent further information requests which focused primarily on entities in the electricity, natural gas, synthetic greenhouse gas, waste and manufacturing sectors. The ACCC will also soon issue carbon tax removal substantiation notices to relevant electricity producers (those selling into a wholesale electricity market or to a retailer) and electricity retailers, natural gas retailers and bulk synthetic greenhouse gas importers and expects to receive carbon tax removal substantiation statements from these entities. This information will inform future reports to the Treasurer.
The report has been prepared for the period 1 April to 30 June 2014 taking into account the effect of the carbon tax scheme. Since that date there have been a number of developments which are relevant, including the enactment of the carbon tax repeal legislation on 17 July 2014. Further developments are set out in the covering letter to this report.
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