The Minister for Financial Services Joe Hockey today directed the ACCC not to approve any business initiatives on the GST that may increase prices by more than 10%.
"No prices will increase by more than 10% as a result of the GST.- that is our policy and that is the law.
"Any rounding that increases prices beyond the GST of 10% is unacceptable. And companies that try to profit from the introduction of the GST will face fines of up to $10 million.
Mr Hockey was responding to reported approvals by the ACCC of a Qantas Frequent Flyer price increase from $20 to $22 as a result of "approved" rounding.
The ACCC have informed me that they have had discussions with Qantas but no agreement was reached.
It was also suggested that rounding beyond a 10% price increase was acceptable provided that a company made no additional profit and rounding down occurred for similar products. This would deliver an "average" price movement for a particular product.
"This will create confusion and uncertainty for consumers and is not in line with our policy that no price will increase by more than 10% as a result of the GST."
"I have asked the ACCC to meet with Qantas and fix the matter so there will be no membership fee increase of more than 10% for Frequent Flyers.
Mr Hockey reaffirmed that if prices increase, as a result of the GST, it must be by 10% or less and many prices will come down as wholesale sales tax and other taxes are abolished on 1 July.
"Moreover $12 billion of income tax cuts means consumers will be better off with the new tax system.
Consumers come first and the ACCCÂ’s direction is clear.