Reductions in Wholesale Sales Tax last July have delivered cheaper-than-expected TVs, videos, clocks and hi-fi's with average prices falling by more than 7%, the Minister for Financial Services & Regulation, Joe Hockey, said today.
This exceeded the ACCC's expected price falls of 5-7%.
The figures are contained in the Australian Competition and Consumer Commission's first quarterly report into the implementation of the new tax system, released by the Minister today.
"Some prices will go down and some prices will go up. Even where prices rise the ACCC expects that many should rise by less than 10% as a result of the GST," the Minister said.
"Competition in Australia is ensuring that tax cuts are passed through to consumers and the ACCC report is proof of that.
"This augurs very well for the full implementation of the new tax system on 1 July," the Minister said.
The ACCC had handled over 2500 complaints via its GST hotline and had investigated 175 of these matters, the report found. The ACCC's enforcement activity had focused on insurance, motor vehicles and building industries.
The report said the ACCC's price monitoring will continue until July 2002, with four main surveys comprising 9,000 outlets across Australia, and cover 3 million prices.
The report also names people and businesses investigated by the ACCC.
The Minister again warned businesses of the big penalties of not passing on the WST tax cuts.
"The report sends a clear message that anyone who profiteers from the introduction of the GST will face fines of $10 million for companies and $500,000 for individuals."
The report is available on www.treasury.gov.au