The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

13 July 2011

Joint Press Conference with
The Hon David Bradbury MP
Parliamentary Secretary to the Treasurer
and
Peter Kell
Deputy Chair of the ACCC and Member of Enforcement Committee

Press Conference

Melbourne

13 July 2011

SUBJECTS: ACCC funding to deal with false claims relating to the carbon price; Latrobe Valley; Polls

TREASURER:

Welcome this morning. I'm here with David Bradbury who is the Parliamentary Secretary for Competition policy and of course with Peter Kell from the Australian Competition and Consumer Commission. Peter is the Deputy Chair of the Commission.

And as you would be aware the ACCC is our consumer watchdog. It's the body that is responsible for dealing with misleading claims that are made about prices from businesses in our community and of course it is going to play a critical role in dealing with misleading claims that are made about the price impacts of the carbon price.

So this morning I'm announcing very significant new funding for the ACCC to make sure we've got the resources to deal with false and misleading claims about the carbon price. And of course there are many being made already. So those who put in place price increases that are not justified will feel the full force of the law through the ACCC, and it will have the resources to prosecute with significant fines.

You may not be aware but we put in place very tough consumer laws from 1 January this year - the toughest consumer laws that Australia has had in 100 years, and these consumer laws are now national. So the ACCC has the power to deal with false and misleading claims about price impacts. Now I believe the vast majority of business will do the right thing, but for those businesses that don't do the right thing, they will feel the full force of the law and heavy fines if they don't do the right thing.

I'll ask David and Peter to say a few things in a minute, but it is absolutely critical that our consumer watchdog is active, and as active as possible, from 1 July next year when these changes are put in place.

Now the carbon price will have a very modest impact on the cost of living. It will impact on the inflation rate by 0.7 per cent when the scheme is introduced. It is a price which applies to the 500 largest polluters. It is not a tax on households, as is claimed by many, but it will have a small price impact in the supply chain and that is why we have put in place assistance for households, assistance households to ensure that they can meet those price impacts and for 6 million households the assistance will be there to meet the average price impact of the carbon price.

Food prices, for example, will be hardly affected and I note that Mr Abbott continues with his scare campaign making all sorts of outrageous claims about the impact on food prices. Nine out of ten households will receive some assistance, and as I said before, 6 million households will get assistance to cover the entire average price impact.

So the ACCC will be the cop on the beat out there to ensure that those that make these false claims are dealt with and dealt with the full force of the law. What I'll now do is ask David to say a few words and then ask Peter to say a few words. David.

BRADBURY:

Well thanks very much Treasurer. It's great to be here and great to join you Peter. As the Treasurer has indicated, from 1 January we have introduced the Australian consumer law which is not only the first national consumer law that our country has seen but also a law that has some of the toughest penalties that we've ever seen. Under the Australian consumer law, the regulators have been given greater powers to act faster and to get stronger and more effective outcomes with their enforcement. We've already seen some very good results in that regard.

Under the announcement being made this morning, the Treasurer has directed the ACCC to ensure that they give priority to enforcement matters that relate to the carbon price and its implementation. We know that there are a lot of claims that have been made and there will be a lot of claims that will be made about the impact of pricing pollution, but we have a very simple message to both businesses and consumers. To businesses we say; do not take advantage of this opportunity to jack up your prices unnecessarily. If you seek to use this as an opportunity to rip off your customers, then you will feel the full force of the law. Indeed, the full force of that law has become even stronger under the Australian consumer law with penalties of up to $1.1 million per contravention in relation to matters where consumers might be misled or provided with false information.

In relation to consumers we have a clear message as well and that is particularly at the moment, where the is not yet been implemented, if you find anyone out there seeking to tell you that they are increasing prices as a result of the introduction of the carbon price, then that is not true. Certainly at the moment we would call on all consumers to direct their concerns and their inquiries to the ACCC.

Even beyond the implementation of the carbon price, this should not be used by businesses as an excuse to increase their prices above and beyond the modest price increases that we expect from the carbon price. We expect that the majority of businesses will do the right thing and to those businesses that do the right thing, you'll have nothing to be to be concerned about.

But under this announcement we're providing $12.8 million over four years to the ACCC and those funds will go towards the establishment of a dedicated team which will involve more than 20 staff and their activities will be directed towards enforcement and towards education of businesses and consumers.

We are providing the ACCC with both the direction, the powers, and indeed the resources that they need to ensure that they crackdown on any false or misleading claims in relation to the carbon price. This is the ACCC's bread and butter, this is what they do best, and we know that we will be working very closely with them, and with other regulators to ensure that households and families around the country do not get ripped off by people seeking to use the carbon price as an excuse for jacking up prices unnecessarily – Peter.

KELL:

Thank you, Treasurer. Thank you, Parliamentary Secretary. The message from the ACCC to businesses is simple: don't mislead your customers about price increases or you will pay the price. As the national consumer protection regulator the ACCC is well placed and will be well resourced to swift enforcement action regarding false or misleading claims about the impact of the carbon price.

The ACCC has a range of tools and remedies under the Australian consumer law. Importantly, we can require businesses to substantiate the claims they make about the impact of the carbon price on their goods and services. Businesses should be prepared to back up their claims when the ACCC comes knocking or otherwise they may face hefty penalties. We also know that 22 million Australian consumers will be on the lookout for businesses who use the carbon price as an excuse to falsely justify price increases.

The ACCC recognises the vast majority of businesses are compliant with the law and we will be working with industries right across the economy to provide guidance on this issue. So this is our two pronged approach. We will assist businesses and consumers to understand their rights and responsibilities and, if the need arises, the ACCC will deal swiftly with any business that tries to take advantage of consumers.

TREASURER:

Thanks very much Peter. Now I'll just take question on the ACCC and we'll go to other questions after that and Peter will leave. So questions on the ACCC.

JOURNALIST:

What kind of businesses have already made false claims and what are you particularly concerned about?

TREASURER:

Well, I'll throw to Peter in a moment, but we had a claim raised in the Parliament just the other day that turned out that it wasn't substantiated at all. There will be all sorts of false claims being made and of course Mr Abbott is running around the country making false claims every day. I think what Australians need to understand is that we've got a watchdog with very sharp teeth and from the introduction of carbon pricing they've got the resources and they've got the power to deal with false and misleading claims. That's the important thing.

JOURNALIST:

What kind of businesses are we talking about? (Inaudible)

TREASURER:

Well it will be the full range that the ACCC with deal with here. Peter might want to give you some sense with what the ACCC does at the moment because they do deal with a lot of consumer complaints across a wide variety of areas. He might want to give you some sense of what action they've taken.

JOURNALIST:

With the -

TREASURER:

Just a second. I'll just throw to Peter.

KELL:

Look as the national regulator we have responsibility for businesses right across the economy. I'm not going to provide a list today of claims that we might already be looking at, but I will say that we're ready right now to look at any business that makes a claim about the impact of carbon pricing, whether they made that yesterday, today or tomorrow and we'll be asking them to substantiate those claims if we have any questions about them.

TREASURER:

You might want to give the number.

KELL:

Indeed, and we would encourage consumers who are facing any claims of this sort when they go to purchase a product or service to call our info centre on 1300 302 502 or to visit our website www.accc.gov.au.

JOURNALIST:

The 20 staff that David mentioned are they going to be new staff or are you going to take them from other areas or a combination?

KELL:

There will be additional staff. They'll be in our info centre to deal with queries from the public. They'll be liaising with business to provide them with guidance about how to comply with the law. We will also have staff engaged in investigations and enforcement to deal with any misleading claims.

JOURNALIST:

How many new jobs do you expect to create?

KELL:

Once the program is ramped up, we're talking more than 20 new staff in the ACCC.

JOURNALIST:

Do you think the penalties are tough enough to actually stop gouging?

KELL:

We've been very pleased about the new penalties that we've recently received as a result of the consumer law reform. You may be aware that last week we obtained penalties of more than $5 million against Optus for misleading advertising. We've already seen a series of multimillion dollar penalties for breaches of the law when it comes to giving the consumers false information. Those are significant amounts. Those are genuine deterrents to misconduct in the market.

TREASURER:

Could I just add to that? I mean, that's why we say it's the watchdog with sharp teeth. These are very, very substantial penalties. There can be multiple penalties because there may be multiple offences by the same organisation.

Anyone else on the ACCC? No? Okay well, thanks Peter.

KELL:

Thanks.

TREASURER:

Right, more generally.

JOURNALIST:

(Inaudible) trip to the Latrobe Valley given what is happening there?

TREASURER:

Well, I know Minister Simon Crean has been down to the Latrobe Valley and in the past few months Minister Combet as well and I certainly will be moving around the country in the next few weeks and I imagine that I will be in the area as well.

JOURNALIST:

What would you say to the workers at Hazelwood?

TREASURER:

Well what I would say to all of the people who live in the Latrobe Valley and work in the power stations is that what we need is certainty for the future. The area has needed a plan for a long time. The absence of a carbon price has created great uncertainty in the area. Now that we have a carbon price and now that we have a plan for energy security we can deal with that uncertainty. And of course we've got a plan to retire 2000 megawatts of capacity over time. That will provide for certainty to deal with the issues of power generation in the Latrobe Valley.

JOURNALIST:

Are you able to (inaudible)?

TREASURER:

We can't indicate the future outcome in terms of what will happen with individual plants because what we must go through is the process that we outlined over the weekend. We will go through a bidding process in terms of removing 2000 megawatts of capacity. We will do that in conjunction with, and talking with, the power companies but of course that is a commercial-in-confidence process.

But we understand the uncertainty and the desire of people in the valley for certainty and we will work our way through these issues as quickly as we can. That's why we've put in place a range of measures for energy security to give people the certainty in the immediate period ahead. But most importantly, what will deliver the certainty for the long term is the finalisation of these plans.

JOURNALIST:

Is Julia Gillard's job safe given today's Galaxy poll and yesterday's Newspoll?

TREASURER:

Julia Gillard is a leader of conviction and she is a leader of courage. This country has been putting a price on carbon for almost a decade. In the last Parliament it was voted down by the Liberals on three occasions. The failure to put in place a price on carbon in this country is leading to great business uncertainty, uncertainty in communities such as the Latrobe Valley as well.

The most important thing we can do for our country, for economic certainty, for investment certainty, and also for the sustainability of our environment is to put a price on carbon and Julia Gillard is showing extraordinary courage and conviction in putting forward this plan which will ensure our long-term prosperity and environmental sustainability. I believe that at the end of the day the Australian people will reward that courage and that conviction and they will punish the scare mongering and the policy vacuum that lies at the core of the modern Liberal Party led by Mr Abbott. His Chicken Little routine has been found to be absolutely hollow. He doesn't have an effective plan to deal with carbon pollution in Australia. He only has a plan for a new $720 slug on Australian households.

What we have is a plan for the future, a plan to reduce carbon pollution, to put a price on carbon for our largest 500 polluters, to assist households through tax reform, tax reform Mr Abbott has said that he will go out there and wreck, increases in pensions and family payments which Mr Abbott says he'll withdraw. I believe there will be a very clear and stark contrast at the next election between the courage, the conviction, and the leadership of Julia Gillard and the shallowness of Mr Abbott.

JOURNALIST:

Is it realistic to expect that 25 per cent of Victoria's power (inaudible)?

TREASURER:

Well, I think what we have to do over time nationally, including in Victoria, is to make sure that we produce power more efficiently, more cleanly, and make the move into more efficient forms of power such as gas and move over to renewable energy. These things take time and they've been put in the too hard basket for far too long. That's why our plan does deliver certainty. It delivers the investment certainty so business can look at what alternatives there may be for power generation in a cleaner way, gas and other combinations of power, along with renewable energy.

JOURNALIST:

Victoria's got the biggest manufacturing industry in Australia. Is it realistic to think that heavy manufacturing could be powered by these alternatives energies? Tony Abbott is saying that that's actually impossible.

TREASURER:

Well, Tony Abbott doesn't have a plan for energy security in our country at all. He doesn't have a plan to deal with the dirtiest power stations either. We have to put in place a plan for energy security, we have to produce our power in a cleaner way and we have to make the move to cleaner power sources and over to renewable energy. You can only do that with a price on carbon. You can only get the investment in innovation to deliver those outcomes through a price on carbon. Mr Abbott hasn't got a plan for any of that at all and indeed doesn't understand how serious a problem we are dealing with here and has no solution. And I think people in the Latrobe Valley absolutely understand that there isn't a solution with the Liberals.

JOURNALIST:

(Inaudible)?

TREASURER:

The cleaner energy package that we have put forward is Labor to the boot straps, Labor to the boot straps. A fundamental economic reform which secures our future prosperity and means that we will be powered into the future by clean energy. You can't have, in the 21st century, a first rate, first world economy, unless you're powered by clean energy. Mr Abbott simply doesn't understand that. We do.

So, we have been through history the Party that has put in place the big reforms that have made our economy strong. And of course when you put in place big, hard reforms you lose some paint along the way. That was the case in the '80s and the '90s when far sighted Labor governments put in place big reforms. We lost a lot of paint along the way but we did the right thing by Australia and Australia is living with benefits of those reforms now. Just as my children and grandchildren will live with the benefits of pricing carbon in 20 and 30 years, but what it requires is far sighted leadership.

I don't know what I would say to my children or my grandchildren in 20 years time if I decided that we shouldn't go down the road of pricing carbon because I was fearful of bad opinion polls. That's not leadership. What we're seeing from Julia Gillard is leadership, courage, and conviction.

JOURNALIST:

What would you say to a bread winner in the Latrobe Valley worried about losing their job?

TREASURER:

I would say that our plan will give them the best possible opportunity given the circumstances that exist in the Valley. It's a plan for the future. It tackles head on the challenge that we have with dirty power stations. It's a fair dinkum plan that will move energy production in this state and around the country to cleaner energy sources whilst looking after the work force, because we're a Labor Party and when it comes to jobs that's the basis of security in our community.

Everything we've done since we've been in Government has been about jobs, more jobs, the security of jobs, and the jobs of the future. And the jobs of the future will be in manufacturing but they will also be in clean energy production. There will be green jobs of the future as well. That's why we're moving in this way, to look after all of our communities whilst putting in place the fundamental economic reforms that secure prosperity for the future.

JOURNALIST:

Are you giving those workers in the Latrobe Valley a timeline though? (Inaudible).

TREASURER:

The absence of a carbon price has meant great uncertainty for those workers and they know that, great uncertainty. What we're about here is putting in place a plan for the future that will deliver the certainty and deliver a future. That we're doing. The absence of a plan has been the worst of all worlds. Thanks very much.