Firms that Mislead Customers on Carbon Tax Face Up to $1.1 Million Fine

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By Vittorio Hernandez | May 28, 2012 1:33 PM EST

Australian Competition and Consumer Commission (ACCC) Deputy Chairman Michael Schaper warned Australian firms on Monday not to use the carbon tax, slated to be collected beginning July 1, as their excuse to jack up prices.

He said the ACCC has the power to file lawsuits against companies that mislead customers or use the carbon tax deceptively to increase their prices. Mr Schaper said violators could be fined up to $1.1 million.

"If you say to customers we're moving our prices and we're moving them because prices have gone up full stop, then we're not really worried about that because that's how prices normally move up.... But if someone says they've jacked up their prices by 20 per cent and it's all due to the carbon tax, that's the (concern)," The Canberra Times quoted Mr Schaper.

The ACCC official disclosed that the agency has received about 250 complaints this year related to carbon tax or inquiries how the new tax would affect them. He said the ACCC is expecting the number of similar calls and queries to rise by the second half of 2012 when the Gillard government begins to impose the initial $23 per tonne carbon price.

He suggested that consumers who find price increases unreasonable to return to the company and ask them to explain the components of price hike if it includes the carbon tax.

When the government hiked the general sales tax (GST), the ACCC probed about 7,000 GST-related complaints from 1999 to 2002 which led to $21 million refunds to 2 million consumers. The watchdog also filed court action against Aussie firms 11 times.

"A degree of honesty is important, especially for long-term customers... you might as well be upfront," he added.

Mr Schaper, however, admitted that it would be more difficult to monitor price increases for the carbon tax than it did for the GST.

"The GST was a mathematical exercise - you take out the wholesale tax and put on the GST and the price should be X.... Here we're dealing with 500 or so big carbon polluters paying the carbon tax, and the flow-in effect through the economy is much harder to predict," Mr Schaper told The Australian.

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