The ACCC has finalised its formal carbon tax repeal monitoring role under Part V of the Competition and Consumer Act 2010, with its final carbon report provided to Minister of Small Business Bruce Billson.
The report provides an update on the remaining industries under assessment in the June 2015 quarter and summarises the ACCC’s key findings from its monitoring activities since March 1, 2014.
“As a result of its monitoring activities, the ACCC is satisfied that all electricity and natural gas suppliers, and bulk synthetic greenhouse gas [SGG] importers, have passed through to customers all cost savings attributable to the carbon tax repeal,” ACCC Chairman Rod Sims said.
“The ACCC is pleased with the high levels of compliance with the price reduction obligation, and therefore has not needed to take any enforcement actions relating to the price reduction legislation.”
The price reduction legislation’s focus on the regulated sectors and transparency requirements to substantiate cost savings, entities’ cooperative approach, proactive industry engagement and the assistance that the ACCC received from many agencies contributed to the high level of compliance that the ACCC observed.
The ACCC believes that, given all the available information, the commonwealth Treasury’s estimated $550 cost savings to households is reasonable. The ACCC has calculated direct cost savings, ranging from $153 to $269, that have been passed through to customers by electricity and natural gas retailers.
In relation to SGGs, average prices after the carbon tax repeal, depending on the SGG type, range from approximately $8/kg to $34/kg at the bulk import level, compared with average prices of $38/kg to $109/kg during the carbon tax period. At the wholesale level, average prices after the carbon tax repeal, depending on SGG type, range from $14/kg to $33/kg, compared to average prices of $47/kg to $182/kg during the carbon tax period.
In addition to these cost savings, the ACCC has also seen cost savings across a number of sectors such as landfill, council rates and charges, food manufacturing, water charges, aviation fuel, liquid petroleum gas (for non-transport use) and transport (off-road vehicle, sea and rail fuel).
The ACCC expects these cost savings will flow down the supply chain throughout the economy over time and be passed through to customers as part of the usual market process.
The ACCC will be reporting to parliament by August 17 that no entities were found to have engaged in price exploitation following the carbon tax repeal and, accordingly, no penalties were payable pursuant to section 60CA of the CCA, and that compliance with the carbon tax removal substantiation statement obligation has been strong.