Submission to the ACTU Inquiry into Price Gouging and Unfair Pricing Practices

September 22, 2023

Progressive Economics

The last few years have been extremely rough on Australians. After a decade of wage stagnation, inflation has eaten into real wages and hardship has increased particularly for those on lower incomes. Alongside that loss of purchasing power, the global pandemic, severe weather events, disruptions to supply chains, and energy shortages, have all contributed to increases in the prices of everyday essential items. Determining what constitutes a reasonable price in these circumstances is not easy for the everyday consumer. To what extent are price spikes due to external factors and resulting supply chain disruptions, and to what extent are they due to firms taking opportunistic advantage of these circumstances? This is not entirely clear, and it’s near impossible to determine at the checkout.

What is clear, as data on sales, revenues, prices and profits for the past few years has highlighted, is that Australian competition, consumer, and industrial relations law are not working as they should. Whilst this period has been unusually challenging, we should not assume that we live in extraordinary times. In the coming decades our planet will experience an increase in extreme weather events. This will bring, alongside other devastating consequences, increased economic disruption. Simultaneously, stability in trade relationships and arrangements is in decline.

Our submission discusses how the state of competition in Australian industries, particularly those which we rely on for essential items and services, can harm consumers and workers, and fuel inequality. It advocates for expeditious reforms to our consumer and industrial law, to empower consumers and workers, and lessen the effect of future shocks.