NO.037

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.

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

CANBERRA

30 June 1999

For further information contact Niki Savva on 02 6277 7340.