ACCC Targets Australian Companies Over Scrapped Carbon Tax; Orders Virgin, Qantas to Explain Why No Savings to Give Back to Consumers
By Esther Tanquintic-Misa | July 30, 2014 2:40 PM EST
The Australian Competition & Consumer Commission (ACCC) has started targeting companies now that the carbon tax has been scrapped. It has specifically ordered airline companies Qantas and Virgin to explain why they cannot pass on to travelers the supposed savings they generated from implementing the said tax.
A passenger walks past a Qantas Airways emblem at the Sydney International Airport terminal July 18, 2014. Australia's Qantas Airways said on Friday it had shifted the flight path for its London to Dubai route over Ukraine some 400 nautical miles to the south several months ago. A Malaysian airliner was brought down in eastern Ukraine on Thursday, killing all 298 people on board. REUTERS/David Gray (AUSTRALIA - Tags: TRANSPORT DISASTER BUSINESS LOGO POLITICS)
The two airlines will be directed to provide internal documents that will show ACCC how they price their tickets if only to prove their claims they have no savings from the repealed carbon tax.
Both Qantas and Virgin said they chose to absorb the carbon tax instead of passing it on to the consumers.
"When the tax came in they made a big thing about putting a surcharge on that was between $2 and $6 per passenger per journey, now they're saying they never passed it on," Rod Sims, ACCC chairman, said. "Frankly, we're sceptical."
"They're going to have to provide a lot of evidence to convince us of their point of view."
But Sims cautioned Australian consumers they will only receive half of the claimed $550 drop in prices from carbon tax's abolition.
"About half of it people are going to see, in their electricity and their gas bills, but the other half they won't see but it will be there."
The ACCC expects that cost savings arising from the carbon tax repeal will be passed through to consumers.
On this, Sims said companies would need to justify why they cannot lower down their prices or why they don't have savings to give back.
Both Qantas and Virgin Australia jacked up their fare prices following the implementation of the carbon tax in 2012, with Qantas from $1.80 and $6.90 per flight and Virgin, $1.50-$6 per flight.
If found they are practicing unfair business, they could be fined a whopping $1.1 million each for deceptive conduct.
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