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Prices meet expectations

COMPARING pre- and post-GST prices showed that between May and July the overall average price change was +1.8 per cent for commonly purchased goods and services.

The ACCC is investigating cases where prices either didn’t fall by as much as was expected, or increased more than expected.

For example, the price monitoring showed that some prices in cafes, takeaways and restaurants were a problem, and our concern was reinforced by calls to the ACCC’s GST Price Line.

Prices in some cafes, takeaways and restaurants had risen by more than 10 per cent, and there were complaints that some food outlets were not displaying GST-inclusive prices on their menus, which they must do by law.

To ensure that consumers are not being exploited, the ACCC advised more than 16,000 cafes, restaurants and takeaways that there was a problem with their prices and explained how they could rectify it.

Businesses must remember that all prices should be GST-inclusive. By law, where a price is quoted, it must be clear to the consumer exactly how much they will be expected to pay for a good or service.

Businesses also need to pass on all their savings under the New Tax System to their customers.

Anecdotal evidence suggests that the education campaign has worked well, and there are fewer complaints from customers.

If you would like more information about prices or how the ACCC can help you with the New Tax System, visit the ACCC website at http://gst.accc.gov.au or call the ACCC’s GST Price Line on 1300 302 502 for the cost of a local call.

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

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