The government’s carbon repeal bill will resurrect an old offence of “price exploitation” and give the Australian Competition and Consumer Commission new powers to investigate and impose fines on companies — a remarkable backflip by the Coalition on its stance in opposition.

As part of its campaign against the carbon price in 2011, the Coalition dramatically warned about carbon cops that were going to enforce the Gillard government’s draconian Clean Energy Acts and how Australian businesses would be “gagged” by the ACCC from telling customers they had to raise prices because of the carbon tax, under threat of fines of $1.1 million.

The tone of the Coalition’s attacks in 2011 bordered on hysterical. “The Gillard government’s plan to use the Australian Competition and Consumer Commission to gag small businesses from informing consumers of price increases due to the carbon tax is a further attack on the struggling sector,” then-opposition spokesman Bruce Billson lamented.

As Crikey explained at the time, the government had given itself no new powers under the Clean Energy Act to do anything — it merely said the ACCC would be given some extra funding and already had a power to crack down on false and misleading conduct by businesses under Australian Consumer Law.

Some even criticised this as inadequate at the time because for the introduction of the GST in 2000, the ACCC had a temporary additional power, provided by the GST legislation, relating to “price exploitation” — that is, charging an “unreasonably high price”, separate from engaging in false or misleading conduct about that price. But price exploitation wasn’t among the offences that had been codified at the start of 2011 when Labor overhauled the Trade Practices Act, which became the Competition and Consumer Act — supported by the Coalition.

So when the Coalition introduced the GST, it was happy to give the ACCC extra-tough powers to crack down on charging “unreasonably high prices”, but when Labor said the ACCC would be using existing powers to check on price rises relating to the carbon price, it was an attack on business.

Given Australia is now “open for business” and the government is committed to slashing red tape, presumably the Coalition’s repeal of the carbon price will include no gagging of businesses with threats of $1.1 million fines, no threats to use the “false and misleading conduct” sections of the Consumer Law, no carbon cops?

Well not quite.

Environment Minister Greg Hunt’s carbon price repeal bill, released yesterday as an exposure draft, repeats the Howard government’s approach and re-establishes within the Competition and Consumer Act the extra GST-era power to pursue price exploitation, under which not merely is it an offence to “make a false or misleading representation … concerning the effect of the carbon tax repeal” but it becomes an offence to “engage in price exploitation in relation to the carbon tax repeal” — which is selling gas, power or other identified goods for an “unreasonably high” price.

The ACCC is specifically empowered by the bill to monitor prices for the purposes of pursuing price exploitation, including forcing companies to provide information about their internal activities. It can also hand out infringement notices (i.e. the equivalent of speeding tickets) to companies for price exploitation, and if they’re not paid, take them to court to face fines of up to $1.7 million (that’s the current equivalent of the old $1.1 million fine, after Commonwealth penalty units went up this year) or just over $1.1 million for breaching the “false and misleading” sections.

The Gillard government’s mechanisms for checking false and misleading claims by business about the introduction of the carbon price pale in comparison with those proposed by the Abbott government for its repeal.

Business groups have previously warned the Coalition against aggressively vetting pricing after the carbon price is repealed. Peak bodies contacted by Crikey this morning said they were still considering the exposure draft.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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