Carbon tax savings must be passed on: ACCC

What goes up, must come down.


That’s the message the consumer watchdog is sending to every company that increased prices when the carbon tax was introduced two years ago.

Now the impost is gone, the Australian Competition and Consumer Commission (ACCC) will check all entities – including airlines, energy companies and local governments – to ensure their prices drop.

Excuses will not be tolerated and ditherers will be aggressively pursued.

“We’re going to be extremely tough,” ACCC chairman Rod Sims told ABC Radio on Tuesday.

“We’re going to adopt a very cynical approach when people give us reasons why they can’t be lowering their prices.”

This puts the watchdog on a collision course with big companies such as Qantas, which claims it absorbed the cost of the carbon tax and has nowhere to move on prices.

Mr Sims is sceptical of this explanation, saying the airline introduced a specific surcharge when the carbon tax took effect in 2012.

Consumers could reasonably expect fares to fall if the surcharge was no longer needed, he said.

Qantas will have to provide evidence justifying why it should not lower fares, and talks between the airline and the ACCC will continue.

The airline is not the only entity in the ACCC’s sights.

About 20 councils signalled their rates would rise with the introduction of the carbon tax.

However, with waste and electricity prices set to drop, Mr Sims said local government rates should fall in line.

“We’ll be knocking on their door to make sure that those rates come down,” he said.

Electricity companies will have 30 days to explain why they think prices will fall.

The ACCC says it will watch this sector very closely, and legislation to repeal the carbon tax gives the agency powers to ensure savings from energy companies are passed on in full.

Electricity retailers have promised to adjust prices quickly and backdate those savings to July 1.

The Abbott government claims the average Australian household can expect to save $550 a year from the repeal of the carbon tax, though some consumer groups have challenged this figure.