- Australians have been hit by large rises in grocery, energy, transport, child and aged care prices, only adding to other cost of living pressures.
- The inquiry, which released its final report on Wednesday, is one of four examining price rises.
Prices vs inflation
How prices are set
- These practices helped raise prices and were “exploitative”, the inquiry found.
- A lack of transparent pricing information caused a poor understanding by consumers of how prices were set.
- While market concentration was a major issue, the inquiry found prices in Australia are way higher than in many other less competitive markets.
- The inquiry found both wholesale and retail electricity pricing strategies were responsible for these increased prices.
- The report noted the “price bidding system” was largely responsible for increasing wholesale electricity prices.
- SUPERMARKETS Supermarket prices have received the most attention recently with the main providers being accused of price gouging.
- The report noted that supermarkets increased prices when there was a shortage or cost increase, but the opposite did not happen easily when supplies were plentiful and prices were cheaper.
Issues common to all sectors
Among the issues common to all sectors were weak competition, a lack of price transparency, the difficulty consumers face switching between suppliers and providers, a lack of pricing policies and a lack of consumer awareness. While the price rises imposed by service providers and retailers were not unlawful, the increases in all sectors were significant and were hurting everyday Australians.
Fels’ recommendations
- Many of the recommendations were sector-specific, but the one that applied to all areas related to the lack of regulation and pricing policies.
- The ACCC should be empowered to investigate, monitor and regulate prices for the child and aged care, banking, grocery and food sectors, the inquiry found.
- For example, the government should use the current aviation review to remove international and domestic restrictions on competition.
Change is needed
- The current pricing practices for all business sectors must improve for greater transparency and to protect Australian consumers from unfair pricing.
- Implementing the recommendations will improve fair and transparent pricing practices and may help Australians get relief from the cost of living pressure in future.
Sanjoy Paul does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
