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Prices surveillance authority -inquiry into effects of exchange rate appreciation on prices of consumer goods



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TREASURER

EMBARGO ---

RELEASE NO.

COMMONWEALTH PARLIAMENTARY LIBRARY MiCAH

STATEMENT BY SENATOR THE HON NICK BOLKUS MINISTER ASSISTING THE TREASURER FOR PRICES

PRICES SURVEILLANCE AUTHORITY - INQUIRY INTO EFFECTS OF EXCHANGE RATE APPRECIATION ON PRICES OF CONSUMER GOODS

The Prices Surveillance Authority today has been instructed to conduct a public inquiry into why the benefits of the recent appreciation of the Australian dollar are not widely evident in consumer prices.

When the Australian dollar suffered a significant depreciation there was little hesitation in prices for ' certain goods and services increasing. Now that there has been a significant and sustained appreciation of the Australian dollar, there should be some benefit to consumers.

The benefits of the higher value of the currency have been passed on in petrol prices, an area under regular review by the PSA. I would like to see other savings associated with a higher exchange rate passed on through lower prices.

Because of this I have directed the PSA to conduct a wide-ranging inquiry which will run for six months. The PSA will soon publish details of the inquiry and invite public submissions.

The Government wants to ensure that consumers benefit from the recent appreciation. It is not equitable for some people in the community to use a rise in the exchange rate to take unjustifiable short-term profits by keeping prices high when

costs have decreased.

The Government believes that economic management and social justice considerations demand any benefits arising from exchange rate movements are shared by all Australians to the greatest extent possible.

The PSA has also been asked, in conjunction with the Independent Airfares Committee, to pay particular attention to the contribution of aviation fuel costs to airfares.

CANBERRA 22 November 1988