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Carbon tax price-gougers may go unpunished

Carbon tax price-gougers may go unpunished

The Australian Competition and Consumer Commission (ACCC) cannot be expected to properly police price-gouging under the carbon tax if it is not given specific legislative powers to do so,…

The Australian Competition and Consumer Commission (ACCC) cannot be expected to properly police price-gouging under the carbon tax if it is not given specific legislative powers to do so, according to a competition lawyer.

Murray Deakin, the head of Middletons' competition and regulatory group, told Lawyers Weekly that businesses may look to exploit the imposition of the carbon tax by bumping up prices for goods and services.

However, unlike the federal government's position when the goods and services tax (GST) was introduced in 2000, the Gillard Government has not yet indicated whether the ACCC will be given specific powers to investigate those businesses it believes may be engaging in price-gouging.

"What's missing in the current carbon tax debate is any meaningful ability or legislative means by which the ACCC could investigate and prosecute companies that are intent on price-gouging consumers with the imposition of the carbon tax," said Deakin.

"Back in the year 2000, the ACCC had quite specific powers to regulate the pricing in relation to the interaction of the GST in part 5(b) of the old Trade Practices Act. It specifically prohibited price exploitation in relation to the GST. The ACCC had the power to investigate any company that it believed might be engaging in price exploitation, and it had a number of specific elements that needed to be satisfied in order to determine whether a company was engaging in price exploitation."

Deakin said that thus far, the Government has not raised this issue in debate, though added that we may not know the full reach of the powers under the carbon tax legislation until the draft bill is released at the end of July.

While there are longstanding prohibitions against misleading and deceptive conduct or representations that are false or misleading in relation to the price of goods or services under the Competition Consumer Act, Deakin said this still leaves a very wide scope for companies to increase their prices without making any representations as to what triggered the price rise.

"They could do so with impunity from any actions that the ACCC might have available to them as the law is currently framed," he said.

"The Government seems to be 'empowering' the ACCC to police the marketplace against price-gouging without really providing it with any meaningful ability to do so, except where a company will increase its prices with an accompanying explanation that the price rise is because of the carbon tax.

"If that proves to be false or misleading, the ACCC would have the means of prosecuting that particular company. But absent a carbon tax-related representation, there doesn't appear to be any real ability on the part of the ACCC to prosecute a company which is taking advantage of the tax to increase prices."

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Carbon tax price-gougers may go unpunished
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