Plan for how you pass on carbon tax: lawyers


Warning that 'carbon cop' armed with broad powers will be on the lookout and could well behave like it did with GST

By Rob McKay | November 14, 2011

Businesses thinking of passing on carbon tax costs should be planning now, according to a Brisbane
law firm.

And they can expect that the Australian Competition and Consumer Commission (ACCC), which is policing business behaviour related to the tax, to use tactics similar to those displayed when the Goods and Services Tax (GST) came into effect.

"During the implementation of GST in 2000, the ACCC adopted an extremely aggressive approach and conducted a number of high profile investigations, most notably of Franklins Supermarkets," Hopgood Ganim Lawyers says.

"Franklins was found to have engaged in price exploitation by charging GST on a number of GST-free products, and suffered the embarrassment of national corrective advertising and being forced to sell the items in question at discounted prices across all its supermarkets for a three week period."

Peak trucking bodies have urged members to pass on such extra costs, given that low margins in the industry can make swallowing them financially fatal for operators.

Partner Michele Muscillo, Special Counsel Brett Bolton and Special Counsel Justin Byrne warn that that, as "carbon cop", the ACCC can be expected to use provisions in Australian Consumer Law (ACL) and to focus on:

 

  • representations by businesses about the future impact of the carbon tax on their prices
  • exaggerations of the impact of the carbon tax on a business's pricing, such as where a business attributes a $10 price increase to the carbon tax when the true impact was only $3 pricing
  • false attributions of a price increase to the carbon tax when no part of the increase can be attributed, such as where a business selling a product exempt from the carbon tax attributes any price increase to it.

Those firms making future impact claims will be assumed to have been misleading and will be required to show that they have had a reasonable basis for the the claims.

The ACCC will be able to fine companies a maximum $66,000 per infringement but can also issue multiple infringement notices for related breaches.

 

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