About 90,000 prices of household items commonly purchased in Tasmania will be collected as part of the Australian Competition and Consumer Commission's moves to prevent price exploitation during the introduction of the New Tax System, the ACCC Goods and Services Tax Commissioner, Dr David Cousins, said today in Hobart.
The ACCC will take action against any business that increases prices unreasonably in relation to the New Tax System changes.
"Businesses will quickly learn that there are also nearly half a million consumers in Tasmania alone to rein-in law-breakers", he said.
"A large ACCC survey of a wide range of goods and services across Australia includes price collection in metropolitan Hobart and Launceston, as well as several major regional centres throughout Tasmania. The ACCC is not disclosing all towns where price monitoring is taking place.
"A total of seven surveys of supermarkets and pharmacy products, alcohol and tobacco, household appliances and services will be carried out between now and June 2002, covering supermarkets, department stores and smaller shops. Monitoring extends to motor vehicles, TV's, stereos, electrical appliances and financial services."
"The updated Pricing Guidelines issued recently by the ACCC highlight when price exploitation is considered to occur. The guidelines provide strong protection to consumers but are fair to business and simple, clear and easy to understand.
"In short the Guidelines explicitly state that no price may increase by more than 10 per cent because of the New Tax System changes.
"In general terms, if tax changes cause taxes and costs to fall by $1, then prices should fall by $1. If, after taking into account tax and cost falls from the new system, the business's cost rises by $1, then prices may rise by no more than that amount.
"On one hand consumers are protected as business cannot add to profits as a result of the tax changes, and on the other, the rule is fair to business because it can recover any net tax and cost increases, and maintain existing profits.
"Retailers must be careful not to mislead or deceive their customers during transition to GST-inclusive pricing. While some prices will fall as a result of the New Tax System changes, some will rise and many will stay the same.
"Price monitoring will enable the ACCC to identify any unjustifiable price movements that may lead to prosecutions.
"The ACCC Price Exploitation Hotline [1300 302 502] lets consumers and businesses alert the ACCC about any unjustified price increases, or seek more information about the law prohibiting price exploitation.
"Complaints received via the Hotline are analysed daily and any business found to be raising prices now in anticipation of the GST faces severe penalties.
"The ACCC is drawing on many sources of information about price changes in carrying out its economy-wide monitoring".
An extensive Australia-wide survey of prices of goods subject to the recent drop in Wholesale Sales Tax that occurred in July last year shows that most prices have fallen in line with expectations.
In Tasmania the results of the fall in WST from 32 to 22 per cent, were broadly consistent with the rest of Australia, with a fall in prices of five to seven per cent.
"Gains to consumers were not limited to metropolitan areas, with regional centres throughout Tasmania also benefiting from these price reductions on goods such as television sets, video players, cameras, photographic equipment and watches", Dr Cousins said.
The ACCC Price Exploitation Hotline is 1300 302 502 and open 8.00 a.m. to 9.00 p.m. Monday to Friday.