ACCC has companies' carbon tax repeal savings in its sights

Australia’s consumer watchdog will continue to monitor and investigate power suppliers and other entities to ensure savings from the repeal of the carbon tax are passed on to consumers.

On Tuesday the Australian Competition and Consumer Commission released its second monitoring report on the effects of the carbon tax repeal on wholesale and retail electricity, natural gas and synthetic greenhouse gas.

While the commission has no role in setting prices in these industries, it can investigate and use its enforcement powers to make sure entities have passed through cost savings from the repeal of the carbon tax.

These enforcement powers are limited to electricity and gas suppliers, but the ACCC is able to oversee a much broader array of businesses in a monitoring role.

The latest report set out a series of expectations for retail and wholesale suppliers to pass on the cost savings from the repeal to consumers.

The ACCC chairman, Rod Sims, said: “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.”

The ACCC will also also seek information from entities in other industries that may be able to pass through savings to consumers, including landfill operators, constructive material suppliers, and companies in the sewage, food and dairy industries. The commission will monitor entities that make public statements about the impacts of the carbon tax on their costs.

“With the repeal of the carbon tax, the ACCC’s role shifts to an enforcement focus,” Sims said. “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.”

The ACCC will also collect prices from electricity, gas and synthetic greenhouse gas suppliers at quarterly intervals.

“Suppliers of regulated goods will be the ACCC’s main focus, as the carbon tax had a significant effect on pricing of these products,” Sims said. “The ACCC is pleased to see the early commitment of energy retailers to pass through cost savings quickly including backdating these savings to 1 July 2014.”