Provides information to businesses on the carbon tax price reduction obligation and explains the consequences of a failure to comply.
On 17 July 2014 the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 amended the Competition and Consumer Act 2010 (the CCA) to include a new Part V – Carbon Tax Price Reduction Obligation. The main objects of the new Part V are:
- to deter price exploitation in relation to the carbon tax repeal at each point in the supply chain for regulated goods, and
- to ensure that all cost savings attributable to the carbon tax repeal are passed through the supply chain for regulated goods (s.60AA of the CCA).
The intention of Parliament, in enacting the new Part V of the CCA, is to ensure that all cost savings attributable to the carbon tax repeal are passed on to consumers of regulated goods through lower prices (s.60AA(2) of the CCA).
Regulated goods are:
- natural gas
- synthetic greenhouse gas, or
- synthetic greenhouse gas equipment (s. 60B of the CCA).
The carbon tax price reduction obligation requires suppliers of regulated goods to pass through all cost savings relating to the regulated supply that are directly or indirectly attributable to the carbon tax repeal (s.60C of the CCA). In determining whether a supplier has charged a price that fails to pass through all the cost savings, regard will be given to the supplier’s costs and other relevant matters that may influence the price.
The purpose of this guidance document is to provide information to businesses on the carbon tax price reduction obligation and explain the consequences of a failure to comply with the carbon tax price reduction obligation.
The examples given in this document are simplified illustrations of a principle and should not be read as actual scenarios. Suppliers of regulated goods and other businesses will be subject to a wide range of factors affecting their input costs and the prices they charge.