ACCC Issues its Second Carbon Monitoring Report
Wednesday 30 July 2014 @ 9.23 a.m. | Taxation | Trade & Commerce
Previously we posted (14 May 2014), that the Australian Competition and Consumer Commission (ACCC) has been acting upon a direction from the Federal Treasurer, the Hon. Joe Hockey MP pursuant to section 95ZE of the Competition and Consumer Act 2010 (Cth) (CCA), to monitor prices, costs, and profits across various sectors in order to assess the general effect of the carbon tax scheme in Australia. As we reported in that previous post a second report detailing the ACCC’s monitoring activities for the June 2014 quarter was to be provided to the Treasurer by 28 July 2014. Yesterday the ACCC by way of a media release (dated 29 July 2014) advised that the report had been delivered.
Background
The ACCC sent further information requests focused primarily on entities operating in the electricity, natural gas, synthetic greenhouse gas, waste and manufacturing sectors in the June 2014 quarter.
The ACCC advised it 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. The information gained from this will form the basis of future reports to the Treasurer.
The second report covers the period 1 April 2014 - 30 June 2014 and takes into account the effect of the carbon tax scheme.
Since that date of the report there have been a number of relevant developments, including the enactment of the carbon tax repeal legislation on 17 July 2014.
Carbon Tax Repeal and Future Monitoring
In it's media release the ACCC advises that it will be contacting firms which had previously represented to consumers that their prices had increased as a result of the carbon tax to see that their prices have now fallen. Also the ACCC advises that it will selectively monitor prices in a number of industries including transport and manufacturing, and will follow up complaints received from consumers with respect to prices not falling.
The media release quotes ACCC Chairman Rod Sims as saying:
“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, . . . ”
In terms of future monitoring of prices the ACCC sees its role shifting from monitoring and information gathering to enforcement of cost savings being passed on to the consumer.
In the media release ACCC Chairman Rod Sims says:
“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 goes on to indicate that the suppliers of regulated goods will be the ACCC’s main focus given the carbon tax's significant effect on the pricing of these products, and he also indicated that the ACCC was pleased to see the early commitment of energy retailers to pass through cost savings to consumers quickly, including back dating the savings back to 1 July 2014.
Further Information
Following is a link to the full copy of the report called: Monitoring of prices, costs & profits to assess the general effect of the carbon tax scheme in Australia.
For information on the obligations of business as a result of the passing of the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (the Act) (assented on 17 July 2014) and the effect of amendments to the CCA giving
the ACCC new powers as well as a continuation of its monitoring role,click here.
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