The federal government has directed the Australian Competition and Consumer Commission (ACCC) to undertake a formal monitoring role in preparation for the repeal of the carbon tax after July.
The direction will take effect from March 1 and remains in force until June 30, 2015.
The ACCC is to monitor prices, costs and profits to assess the general effect of the carbon tax scheme in Australia.
The focus of the direction will be on suppliers of regulated goods, namely natural gas, electricity and synthetic greenhouse gases, as well as corporations identified as liable entities under the Clean Energy Act 2011. There are approximately 400 firms subject to the direction.
The government also directed the ACCC to provide a report on its monitoring activities at the end of each quarter of each financial year for the duration of the direction, with the first report due at the end of July.
ACCC chairman Rod Sims said the ACCC welcomed the direction, as it allows the watchdog to understand the pricing practices of industries subject to it, prior to therepeal taking place.
“The price monitoring role will leave the ACCC well placed to tackle any price exploitation that may occur post-repeal,” Sims said.
“The ACCC is not setting prices; we are simply collecting information and monitoring the pricing practices of specific entities so we can fully understand the impact of the carbon tax both before and after the anticipated repeal.”
Under the existing carbon tax legislation, the Clean Energy Regulator is required to hold periodic auctions of carbon units. Three auctions were due to take place before June 30.
However, Environment Minister Greg Hunt cancelled the auctions by signing the Clean Energy Auction Revocation Determination 2014.
The revocation has been lodged with the Federal Register of Legislative Instruments.
“This gives business certainty that they no longer need to take part in carbon unit auctions,” Hunt said.
The ALP has supported the cancellation of the auctions, saying it was consistent with plans announced last year to accelerate the end of a fixed price on carbon by one year.