Why Businesses Need Evidence Before Claiming The Carbon Tax Has Caused Price Rises

As the July 1 date for the launch of carbon pricing draws nearer, we're likely to hear many more businesses saying that they've been forced to raise prices because of it. The Australian Competition and Consumer Commission (ACCC) has reminded business operators that claims about price rises have to be backed by solid, business-specific evidence.

We've noted before that the ACCC has a straightforward approach to this issue: businesses can charge whatever they like, but they can't make misleading claims about the basis for those prices. If a business says that it has put up prices in response to carbon pricing, it needs to have a basis for that.

If a business claims that a price rise is linked to the carbon price, the claim must be truthful and have a reasonable basis. If a business decides to make a claim, it should be based on information that is relevant to that particular business. Businesses should be aware that the ACCC can ask for information to support claims about the carbon price.

The ACCC has issued updated guides for small businesses on what might constitute a reasonable claim, including a series of videos (one of which you can see above).

ACCC


Comments

    Yeah, it's going to be next to impossible to find a factor of production that has had its costs increased due to the tax...

      how do you figure?
      the tax has a measurable index, applied to measurable elements...
      to me that's like saying 'you can't calculate the GST effect on your products'... yes you can, it's on the invoice?
      people get paid everyday to interrogate company costs and figure out where their money's going... i really dont think that figuring out where the extra money is going is that hard?

        My children's not-for-profit child care centre is raising fees by $10 per day next month to cover, among other things, the effects of the carbon tax. You're crazy if you think every small/medium businesses are going to pay for a proper analysis to justify the cost hikes.

        I suppose we can file the additional cost of Carbon Tax Analysis under the law of unintended consequences. :)

    im just wondering how much more my wage can take with all the price rises that has been going on over the last few years. Anyone who says prices have stayed steady or gone down are delusional and kidding themselves.

    How many people have started using public transport to get to/from work even though it takes them longer (in some cases). What happens to peoples budget if interest rates start to rise. I would like to think that we wont have another 80's situation where it went upwards to 17%!

    I would also hope that my family wont have to freeze during the day because it has become prohibitively expensive just to have the heater on. If electricity and gas prices go up, how the hell are we meant to be able to do things like washing our clothes when the days are no where near warm enough for them to even dry outside because it is again become to expensive to use a dryer!! I don't see a good future at the moment because of the policy initiatives by the government in an effort to reduce global warming.

      Hang the clothes up inside on a clothes horse.

      Old fashioned, yes; but a method that has stood the test of time.

    "Businesses should be aware that the ACCC can ask for information to support claims about the carbon price"

    I would like to see that, the ACCC says a lot of things they dont mean.

    It'll be mayhem in the first few months. Every business that finds its costs have increased will probably assume that it's because of the carbon so-called 'tax'. The fact is that about 500 companies will have to purchase carbon credits (note the lack of an actual tax here). Those businesses will raise their prices to the extent they feel their market can bare in order to cover the additional costs. The businesses that are affected (and there will be many affected in the second round because of electricity prices) will then have to raise their prices. The issue is how much those secondary businesses can blame the carbon 'tax' on all future increases. Will the electricity companies be explicit about how much their price increases were as a result of the purchase of carbon credits? If they are, then secondary businesses will know how much of any increased costs THEY can blame on the new scheme. If they don't, then on what basis can the local pizza show say that their pizza price rise was the result of the carbon credit purchase of their electricity provider?

    The issue is that the Liberal Party have set everyone in the nation up to automatically assume that any change in price for anything after the 1st of July will be because of the carbon 'tax'. We've practically all fallen for the "great big tax on everything" lie. Extracting the actual effect on the price of pizzas will be much harder. We know that businesses who interact with the public always prefer to blame any price increase on someone else. The carbon 'tax' will be the perfect whipping boy for quite some time.

      Agreed Jason. Electricity suppliers have been "warning" us for months about the possible affects of the carbon tax, but then there was the report from the pricing regulator that estimated the carbon "tax" would only contribute about 16% maximum of the 35-45% price increase the electricity suppliers were warning of.

      I'm well aware the carbon price is going to make a difference to some companies directly, primarily industry and that it will have a flow on in electricity prices. But the electricity companies need to take responsibility for their prices- it has been 15 years since they did any decent infrastructure upgrading and now they're trying to blame it on the carbon price.

    @Marty You will see an increase in your take home wage because the income tax brackets are changing significantly. You can use that extra money to cover the cost of price rises.
    Also, you can dry your clothes in the same way that everyone else in the world dries clothes without a dryer (believe it or not, people lived without clothes dryers for 1000s of years). We stick ours over the ducted heating. Timing your washing for sunny days is also a good strategy.

      true cbp, but many of us don't have ducted heating :D

      However, your point stands. You can get double your money's worth by heating a small area, such as a lounge, where people can be warm AND you can put your clothes on a clothes horse to dry them.

      This is not the US people- it is not necessary to use your dryer except in emergencies (no dry clothes at all) or for shrinking clothes, for which they work well. I speak from experience- I live where at the moment it doesn't get above 10 degrees during the day, but I still manage to dry clothes outside or inside.

    Can the honesty-enforcing ACCC have a word to a certain Ms. J Gillard of Canberra? She was caught out lying about the carbon tax two years ago!

    "The Commonwealth Government’s Clean Energy Scheme commences 1 July 2012 and may result in price increases as detailed in your Retail Electricity Agreement. For more detail, contact your Account Manager listed above. "
    We average 600-800kWh PER DAY. Electricity price is going to go up, therefore manufacturing cost is going to go up. Now try telling me I can't pass that back down to my customer?

      Exactly. It's not Liberal scaremongering. there will absolutely be a flow-on effect.

        It's fine, the government are giving assistance to Those Who Need It Most (TM).

          Shame that assistance doesn't go to hard working singles or couples that are kidless.

    Excuse me but Julia lie through her teeth when she swore there would be no carbon tax? Why is she allowed to lie with impunity but everyone else is guilty until prooven innocent by a modern day Spanish Inquisition?

    what a joke. Business like mine have been holding costs while watch our margin shrink just to keep market share. This is the opportunity for many companies to just have a hike. All our transport costs will be increased for sure. There is no way they can enforce this. It's a stupid Tax from a stupid government, tenuously holding power with the support of the greens, wanting to show how committed they are to reducing the miserable carbon footprint Australia makes upon the earth while the worlds factory China just laughs in the face of it all. Seriously !!??

    I believe the Carbon Tax will effect prices greatly, an example is power companies. I do not believe that the cost of this tax should be passed on to hard working tax payers.

    I have 100% wind power with Origin. My bills show zero emissions but Origin claims my costs have increased partly due to the carbon tax. Che?

    Anyway... The carbon tax will add a negligible amount to power bills, even excluding the multi billion dollar compo for the generators.

    Aussies, we really are a lame pack of whingers.

    Once again it degenerates into a "why should we have to pay it - stupid tax" whinge fest - anyone remember the idea behind the carbon tax? To incentivise investment in green energy and push companies to become carbon neutral etc? We all know the planet is getting more screwed up... but apparently no one wants to pay for it! This is how we can all help pay towards it in a "mostly" fair system - so quit bitching!

      I don't believe we need to go carbon neutral, you are assuming carbon dioxide is bad...

        Um...yes, yes we are Christian. It has been scientifically proven CO2 is building, leading to climate change, leading to higher temps, leading to less water, less food and rising sea levels, all which make it hard to live.

        You're assuming CO2 is GOOD? Oh, right, you''re a troll...

          I guess only someone who posts four times to a single article, and then calls other people trolls, could believe the carbon tax has anything to do with green energy or will make the slightest difference to the world's climate.
          I'm sure it's difficult coming to terms with the reality that Global Warming(TM) is dead when you're obviously so emotionally attached to it. My condolences.

            @Christian - don't take seven_tech's comment to heart. Climate evangelists get testy when anyone tries to engage in a rational discussion. When they say the science has been decided, they have blinkers on - they refuse to acknowledge scientists who have doubts.

              That's all great guys. I've no problem in you believing in non-climate change.

              Meanwhile, I'll follow the rest of the world's governments who've been advised otherwise.

              Cheers!

        I would say more like compare Australia's emissions to the rest of the world... carbon tax for us means fsck all in the scheme of the environment and just increases our costs. Investment in replacing existing infrastructure is way too high, but fair enough on new/future installations. Look at Russia and China for starters, they have enough trouble getting their citizens to pay tax in the first place, let alone one more whacked on top of all the others lol. And then the oligarchs would find a way to rort the system anyway.

      +1 Get over it. You're not likely to feel it badly and if you do, stop wasting so much power. Cause I guarantee you are.

      I am right now. I need a laptop, or tablet, this desktop is too expensive to run. Finally! An excuse!

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