NO.034

COMPONENT PRICING – AMENDMENT TO THE TRADE PRACTICES ACT

1974

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.

MELBOURNE

21 April 2005

Contact: Amanda Kennedy

(03) 9650 0244