ACCC to Adopt Price Monitoring Role on Carbon Tax Repeal
Tuesday 11 March 2014 @ 9.31 a.m. | Taxation | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC) has received a Direction under Part VIIA of the Competition and Consumer Act 2010 (Cth) from the Government to undertake a formal monitoring role in preparation for the repeal of the carbon tax post July 2014. The Direction takes effect from 1 March 2014 and remains in force until 30 June 2015.
What Does the Direction Cover?
The Direction covers the supply of regulated goods - natural gas, electricity and synthetic greenhouse gases – as well as corporations identified as liable entities under the Clean Energy Act 2011, approximately 400 in total. It does not, however, include a price setting role.
The ACCC is to monitor prices, costs and profits to assess the general effect of the carbon tax scheme in Australia. The focus of the Direction will be on suppliers of regulated goods, namely natural gas, electricity and synthetic greenhouse gases, as well as corporations identified as liable entities under the Clean Energy Act 2011.
The Government also directed the ACCC to provide a report on its monitoring activities at the end of each quarter of each financial year for the duration of the Direction, with the first report due at the end of July.
The Chairman of the ACCC Rod Sims said the ACCC welcomed the Direction, as it allows the ACCC to understand the pricing practices of industries subject to the Direction, prior to the repeal taking place.
The ACCC Chairman said:
“The price monitoring role will leave the ACCC well placed to tackle any price exploitation that may occur post-repeal … The ACCC is not setting prices; we are simply collecting information and monitoring the pricing practices of specific entities so we can fully understand the impact of the carbon tax both before and after the anticipated repeal."
The ACCC will engage with the relevant businesses and be reasonable in its requirements for information.
Background to the Bill
On 21 November 2013 the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 (the Bill) passed the House of Representatives.
The Bill amends the Competition and Consumer Act 2010 and provides the ACCC with new powers to:
- Monitor prices in key sectors;
- Take action against businesses in key sectors that attempt to exploit other businesses and consumers by charging a price that is unreasonably high having regard to the carbon tax repeal; and
- Take action against businesses that make false or misleading claims about the effect of the carbon tax repeal or carbon tax scheme on the price for the supply of goods or services.
However, as the Bill has not passed the Senate (Senate negatived at Second Reading Speech stage on 3 March 2014), in the interim, the Minister has exercised his discretion to direct the ACCC pursuant to Part VIIA to undertake a monitoring role in relation to the carbon tax scheme.
A Part VIIA Direction requires the ACCC to monitor the prices, costs and profits relating to the supply of goods and services by persons in a specified industry and to give the Minister issuing the Direction a report on the monitoring at a specified time or at specified intervals within a specified period.
In preparing any report, the ACCC must have regard to the need for commercial confidentiality. The ACCC must also make copies of the report available for public inspection as soon as practicable after it gives the Minister the report.
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Sources:
ACCC Media Release NR 030/14
Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and Explanatory Information as reported in TimeBase LawOne Service
