The Treasurer announced today that the Australian Government would be making an amendment to the Trade Practices Act 1974 (the Act) to respond to the increased use of component pricing in a number of industries.
Component pricing occurs when a trader advertises a price in its component parts rather than as a single, all-inclusive figure.
The Government intends to amend the Act to make it clear that when advertising or quoting a price for a product or service, the business must include a prominently displayed single-figure price at which the product or service can be obtained. This single-figure price should include all costs that consumers, including business consumers, are required to pay to the trader to obtain the product or service. The Government does not anticipate that the proposed amendment will prohibit businesses from including component prices providing the total price is also prominently displayed.
This amendment is an excellent outcome for consumers because it will ensure that they are not required to undertake any form of calculation to determine the total price that must be paid for goods or services. This will make it easier for consumers to identify and compare prices readily for goods and services in a range of industries.
The amendment is also consistent with goods and services tax (GST) policy that displayed prices should include any GST payable.
The amendment follows a request from the Australian Competition and Consumer Commission to address the issue of component pricing.
To ensure that the response to component pricing is consistent in all jurisdictions, the Australian Government intends to liaise with state and territory governments for equivalent amendments in all jurisdictions. This issue will be discussed at the meeting of the Ministerial Council on Consumer Affairs tomorrow and the Commonwealth will be encouraging the states and territories to make similar amendments to their fair trading legislation.