'Too high, too often': Price gouging report calls for government to step in
Australians are being overcharged by banks, energy companies, airlines and supermarkets who have exploited a lack of competition in crucial markets to push for bigger profits, according to a new report that has called on the federal government to step in and address price gouging.
The review, conducted by former Australian Competition and Consumer Commission (ACCC) chair Professor Allan Fels, found that "exploitative business pricing practices" have significantly added to inflation, and that new government policy is needed to remedy it.
"Australians are paying prices that are too high, too often," Fels said in a speech at the National Press Club this afternoon.
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Customers shop for essentials during the first Coles Community Hour at Coles Southland on March 18, 2020 in Melbourne, Australia. Martin Keep/Getty Images for Coles
"The cause is weak and ineffective competition in too many markets.
"Two policies are needed.
"First, the Australian government needs to act on high prices, to investigate their nature and causes and, where possible, their remedies. The remedies do not include price controls but there is much that governments could do.
"Secondly, greatly strengthen competition policy to remove or weaken market power, which enables excessive prices to be charged."
Fels' review examined a range of industries including supermarkets, banks, energy, childcare and car sales, and received over 700 submissions since being announced last year.
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The report looked at a range of industries, including airfares, car sasles, supermarkets and energy providers. Steven Siewert
After receiving over 750 submissions, Fels said reform needed to be implemented quickly.
"A significant part of the cost-of-living crisis has been caused by companies taking advantage of their market power and relying on gaps in Government policy to squeeze consumers and often suppliers to breaking point," he said.
"Reform to curb this is urgent."
He made 35 recommendations, including that Australia follow the European Union in outlawing excessive pricing, and the establishment of a new body to make up for the lack of government attention on high prices.
"I propose the establishment of an independent National Competition and Prices Commission, drawn from the Commonwealth, states and territories," he said.
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Fels made 35 recommendations in his report. SMH/Alex Ellinghausen
"It would implement the welcome decision by the government to revive the National Competition Policy, which attacks the many government restrictions on competition – and it would be combined with a standing price commission function.
"The former function is about removing restrictions on competition which cause high prices.
"The latter is about investigating high prices and the restrictions on competition which cause them."
The review is one of three reports into high supermarket prices during the cost of living crisis.
The others are a Queensland inquiry announced by Premier Steven Miles and an ACCC investigation commissioned by the federal government.
Economist and former Labor minister Craig Emerson has also been appointed to review the Food and Grocery Industry Code of Conduct.
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