Oops! Oz Voters May Not See Lower Grocery Costs Promised When Carbon Tax Repealed
Food and grocery prices may not fall when the carbon tax is repealed and struggling food manufacturers could be forced to continue to pay the tax in their power bills for 18 months after compensation schemes offered by the former Labor government had been abolished.
The warning, from the Australian Food and Grocery Council, comes after cautions from electricity generators and retailers that they can’t guarantee domestic power bills will fall by Tony Abbott’s promised 9% and from the Australian Industry Group and the Business Council of Australia that other prices might not fall immediately, or by as much as the public has been led to expect. Given all the factors that feed into final prices, the AFGC concludes grocery prices “may or may not” fall over time.
Tony Abbott has repeatedly insisted that households will be on average $550 a year better off after the carbon price is repealed, with electricity bills falling by 9%, gas bills by 7% and price reductions flowing through the rest of the economy.
But in its submission on the eight carbon tax repeal bills that will be the first legislation introduced by the Abbott government when parliament resumes next week, the AFGC says the “government and the community may have expectations that food and grocery prices will come down immediately after abolishing the carbon tax”. It says that where the carbon tax was passed on, it would be rolled back, but most businesses had been unable to pass it on and therefore “there will not be an across the board reduction in food and grocery prices once the carbon tax is repealed”.
EDIT
http://www.theguardian.com/world/2013/nov/06/food-prices-may-not-fall-carbon-tax
= new reply since forum marked as read
