CHOICE October 2022

When thinking about which issues CHOICE should work on today, I often reflect on the work of our founder Ruby Hutchison. A trailblazing West Australian politician from the 1950s to the 1970s, Ruby was not only the key force behind the establishment of CHOICE; she also campaigned for justice on a range of other issues, including the rights of Aboriginal people in WA to be treated as citizens. Having seen the strength with which she campaigned on these issues, I suspect she’d be disappointed with the progress we have made in the decades since. Over the past few months I’ve had the opportunity to talk with consumer affairs commissioners and advocates from across the country about the key problems they’re seeing in their work. These conversations have been littered with…

Energy companies shamed in Victoria The Victorian Essential Services Commission has obtained a court-ordered enforceable undertaking against AGL, following allegations the company denied customers relief grants and wrongfully disconnected them. The Commission says AGL restricted customers from receiving applications for government energy relief grants, and also disconnected a small number of customers after failing to provide them with bill assistance. “Retailers who fail to meet their obligations to support customers through the energy payment difficulty framework may exacerbate what can be already a stressful time for customers experiencing vulnerability,” says Commissioner Kate Symons. “Gas and electricity are essential to the health, safety and productivity of Victorians. Disconnection is the absolute last resort.” The alleged violations came before the tough new rules were introduced in December 2021, meaning AGL wasn’t subject…

There were more Australian super fund mergers last year than any previous year, with more funds still looking to merge. The decline in the number of funds can be a good thing for consumers – mergers can make the industry more efficient, resulting in people ending up with more retirement income. Greater scrutiny of fund performance has largely driven this merger activity. Of the four funds that failed the government’s performance test for the second year, three have entered into mergers. Funds have accepted that mergers are the best way to improve performance and lower costs. APRA’s publication of MySuper ‘heatmaps’ (which show how funds are performing on fees and net investment performance) may have also driven mergers. APRA has found that the wave of mergers since its first heatmap…

CHOICE, along with the Consumer Policy Research Centre (CPRC) and Consumer Action Law Centre (Consumer Action), made a submission to the Treasury in August, supporting higher penalties for businesses that breach the Competition and Consumer Act. If implemented, courts would be able to issue fines of up to: ● $2.5 million for individuals,● $50 million for corporations, or● 30% of turnover over the period the breach occurred. The fines for breaches of both the competition and consumer provisions in the Act will have a positive impact on consumers. Without enough competition in markets, consumers pay through higher costs and less innovation. According to the OECD, Australia has some of the weakest penalties in the developed world for breaches of competition laws. Without these proposed increases, big companies can simply price…

Waste company Bingo Industries has pleaded guilty to cartel behaviour after it was accused of price fixing for demolition waste services. It comes after the company was investigated by the ACCC and referred to prosecutors, accused of working with its competitors in 2019 to fix and increase the cost of supplying skip bins and waste processing services at building and demolition sites in Sydney. The matter will now be listed for a case management hearing in the Federal Court at a later stage. Meanwhile, the ACCC is promising to continue to investigate reports of cartels as they arise, saying such conduct is bad for the economy: “When companies arrange to fix prices, they usually do so to increase their profits, and it is consumers that pay the increased cost,” says ACCC…

Used car prices are a persistent anomaly of the COVID-19 ‘new normal’. Once upon a time, new cars depreciated in value by up to 58% over three years. But with the pandemic causing a supply constraint of new cars, the price of used cars has gone up 79% since early 2020. So it’s no surprise that car insurers’ valuations are, conveniently perhaps, lagging behind the rise in used car prices. CHOICE member John recently told us “my 2007 Mazda 3 was insured for maximum ‘Agreed Value’ of $5720, with ‘Market Value’ a little less, but to replace that 2007 Mazda 3 model will cost me a minimum of $10,000 for an inferior model with a lot more kilometres, and a 2007 Mazda 3 with less kilometres is $13,000.” There are…