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Monday, 2 April 2001
Page: 26221

Mr Fitzgibbon asked the Treasurer, upon notice, on 8 November 2000:

Mr Fitzgibbon Has his attention been drawn to claims that paragraph (2)(c)(iii) of section 75AU of the Trade Practices Act significantly reduces the prospects of a successful action against GST price exploitation; if so, what is the Government's reaction to the claims.

Mr Costello (Treasurer) —The answer to the honourable member's question is as follows:

The Government introduced the Price Exploitation Code to prevent the possibility of consumer exploitation and excessive profit taking in the transition to the New Tax System. In drafting the Code, the Government was keen to ensure that it operated in a fair and just manner, affording affected parties the opportunity to justify legitimate pricing decisions. In particular, the Government was conscious of the range of factors that influence the pricing decisions of a business. For that reason, paragraph (2)(c) specifically allows a Court to consider any matter relevant to determining the price for supply in assessing whether there has been any price exploitation.

On 20 October 2000, the ACCC released a report on the outcome of its latest survey of price movements of commonly purchased household items since the introduction of the GST. The survey confirms there is no evidence of widespread opportunistic pricing intended to raise margins immediately after the tax changes. In the relatively small number of cases where the ACCC has had concerns, these have generally been addressed by the business taking action to resolve the matter, such as by offering suitable compensation to affected customers.