The Treasurer, Mr Peter Costello, today announced the appointment of Dr David Cousins to the Australian Competition and Consumer Commission as a full-time member for a three year term commencing on 14 July1999. This appointment is the final stage in arrangements for the Commission to monitor and enforce a transitional price oversight regime with the introduction of the GST.
Dr Cousins is a former Chairman of the Prices Surveillance Authority and is currently a Director with KPMG Management Consulting Pty Ltd. He has recently been engaged as a consultant by the Commission to assist with the drafting of pricing guidelines for the GST implementation.
The Government is establishing a transitional price oversight regime, under legislation that amends the Trade Practices Act 1974. This will give the Commission special powers to ensure that price changes are consistent with the tax rate changes. The Government is keen to ensure that consumers benefit fully from reductions in indirect tax and that businesses do not engage in price exploitation during the transition to the New Tax System.
To give effect to this policy, the Government will provide the Commission with an additional $28 million over the next three years and the Commission proposes to engage approximately 40 new staff.
In performing its new role, the Commission will be able to: provide information to market participants; monitor price movements; investigate complaints and issues of public concern; obtain information about prices and pricing decisions; report publicly on its oversight role; issue a notice specifying maximum prices to aid in the prevention of price exploitation; issue a notice of price exploitation and undertake court enforcement action.
Penalties for breach of the proposed price exploitation provisions will be substantial, including fines of up to $10 million for corporations and $500,000 for individuals.
The Commission has issued preliminary draft guidelines as to when prices may be regarded as being in breach of the price exploitation provisions. The Commission, with the assistance of Dr Cousins, has been consulting closely with business and consumer associations in the further development of these guidelines.
Dr Cousins has had considerable experience in dealing with price oversight issues during his time as Chairman of the Prices Surveillance Authority. This, in combination with Dr Cousins private-sector experience will provide valuable additional capacity to the Commission.
Background
This appointment follows the announcement, on 4 June, of the appointment of ten other persons and brings to 21 the number of persons appointed to the Commission. The full-time members from 14 July will be:
- Professor Allan Fels (Chairman)
- Mr Allan Asher (Deputy Chairman)
- Mr Sitesh Bhojani, Dr David Cousins, Mr Ross Jones, Mr John Martin and Mr Rod Shogren