ACCC’s role clarified

THERE are misconceptions about the ACCC’s role in relation to the GST which I would like to clear up.

It is not a question of having thousands of ACCC-employed inspectors checking prices.

Rather, the ACCC’s objective is to achieve a result whereby prices increase by no more than they need to because of the tax changes and where prices fall by as much as they should as a result of reductions in sales tax and other cost savings related to the GST.

In many parts of the economy this will happen without government intervention or checking.

In addition, the ACCC has taken steps other than just checking to get results – a strong law applies, with high fines and provision for corrections and refunds.

The ACCC has issued guidelines and an Everyday Shopping Guide, as well as a price line to hear information from consumers.

The ACCC believes that where there is over-charging there is a significant consumer issue which business must resolve.

There must be quick corrective action, refunds or compensation for consumers, and systems put in place to prevent repeated over-charging.

While it is too early to predict the final outcome for consumers, initial results suggest that most businesses have been responsible in setting new prices.

The fact that the ACCC’s price line has not been bombarded with millions of calls is one indication that most businesses have acted responsibly.

Although the ACCC has been very busy in recent times with GST matters there are other areas that have our constant attention.

For example, agreements between competitors to fix, maintain or control prices are illegal. These agreements are commonly known as ‘price fixing’.

Such an agreement does not have to be in writing.

It could be just a ‘nod and a wink’ understanding that could take place anywhere – in the pub, at an association meeting or a social occasion.

The important point is not how the agreement was made, or even how effective it is, but that competitors are determining prices collectively and not individually – as should be the case.

While the ACCC has played a pivitol role in policing the implementation of the GST, it undertakes a range of activities that benefit all types of consumers.

These include business consumers, because business has an interest in being supplied competitively and efficiently and, also, in selling into markets where there is competition for its product.

Some of the ACCC’s success in identifying law breakers and helping bring them to justice will be outlined in later columns.

For information about ACCC activities visit the website at To make a complaint or for information about price exploitation ring the GST Pricing Line on 1300 302 502 or visit the GST website at

n Professor Allan Fels is chairman of the Australian Competition and Consumer Commission.

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