Coalition to grant ACCC powers to crack down on businesses not passing on savings from scrapped carbon tax

The Australian Competition and Consumer Commission will be given extra powers by a Coalition government to make sure businesses pass on savings to consumers if the carbon tax is scrapped.

When the carbon tax was introduced last year the consumer watchdog had previously policed businesses for upping their prices and blaming it unfairly on the carbon tax.

The ACCC will also receive a $16 million cash injection so it can perform its extra duties.

Opposition Leader Tony Abbott said in a statement yesterday the initiative would ensure the benefits of lower prices are passed on to consumers.

“We will provide $16 million to support a significantly expanded enforcement role for the ACCC associated with the repeal of the carbon tax.

“Labor’s carbon tax has increased electricity prices by 10%, gas prices by 9% and has impacted prices more generally,” he says.

But Council of Small Business of Australia executive director Peter Strong told SmartCompany small businesses should be largely unaffected.

“I ended up having a talk with the policymakers around this and I expressed my concern that this is scaremongering when it’s not really a problem.

“From what I was told the only ones which really need to worry about it are the businesses which said at the time they put their prices up because of the carbon tax. If you didn’t specifically say this, I wouldn’t worry about it,” he says.

Following the carbon tax’s introduction on July 1, 2012, the ACCC started policing businesses which were blaming the carbon tax for their price rises.

Bakery chain Brumby’s was caught by the ACCC when its former managing director Deane Priest sent a memo to its franchisees telling them to increase their prices as early as June and “let the carbon tax take the blame”.

The Coalition says it will also work with the Australian Energy Regulator and with state-based price regulators to make sure electricity and gas prices are regulated accordingly.

Should the Coalition come into power, businesses which don’t pass on the cost savings from the axing of the carbon tax will face penalties of up to $220,000 for individuals and $1.1 million for corporations.

SmartCompany contacted the ACCC for comment, but no one was available prior to publication.

Strong says there were only a small number of small businesses which could have passed on costs from the carbon tax to consumers.

“Some businesses which would have been affected were those which use large fridges and gas, and also the businesses in manufacturing.

“I don’t recall any saying their prices were going up specifically because of the carbon tax. However, around this time many said their costs were going up for a number of reasons and they would have to manage it,” he says.

Strong says the biggest issue for many businesses was the cost of power, which was driven upward by the carbon price; however, other issues such as rent prices and wage costs were also factors for small businesses

“We don’t need scaremongering when there isn’t a problem and there won’t be a problem. We want to change the way small businesses are talked about because we’re not causing any problems,” he says.

The first business to cop a fine from the watchdog for blaming the carbon tax for price rises was a Genesis Fitness Club franchise in the Melbourne suburb of Berwick.

The business paid an infringement notice of $6600 after it sent members contract extensions at their current rates saying this would help members avoid future 9-15% price rises because of the carbon tax.