Inquiry to examine profits of energy and food sectors
Former ACCC boss Alan Fels says Australia needs stronger competition laws. He's chairing a union-backed inquiry into price gouging which has heard evidence big business is using inflation as a cover to drive prices higher. Mr Fels says companies found to be profiteering will be named and shamed.
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00:00 Danielle has seen all her bills rise this year, including a 40% increase on her home
00:07 insurance even though she hasn't made a claim.
00:10 There's been no significant reasoning or justification around the bill hike, which has been for me
00:16 really distressing.
00:18 She's one of 600 Australians who've written submissions to the inquiry. The Chair, Professor
00:23 Alan Fell, says he wants to get to the bottom of what's driving up prices.
00:27 There's evidence that profit mark-ups have gone up in Australia and globally, and there's
00:34 evidence that competition has been reduced.
00:42 World events like the war in Ukraine and the pandemic have been used as an excuse to keep
00:46 prices high, he says.
00:48 High inflation makes it easier for businesses to edge up their prices and not be questioned
00:55 about them.
00:57 The inquiry heard more than half of price rises above inflation have been due to profits,
01:02 while labour costs account for a third.
01:04 Firms across these sectors have more than simply passed on high input costs to consumers,
01:10 they were actually amplifying the costs.
01:13 Big Business says that's not true, and the only sector showing any strength in profitability
01:18 is mining.
01:19 The idea that companies are price gouging, that this is driving profitability, that this
01:23 is adding into inflation, there's very little evidence for that.
01:27 Professor Fell already has some recommendations he hopes to take to the Federal Government,
01:32 including strengthening price surveillance laws, giving more power to the consumer watchdog
01:37 the ACCC to investigate prices, and stronger merger laws to block anti-competitive deals.
01:44 An interim report will be released by the end of the year.
01:47 [BLANK_AUDIO]