Fed: Factors other than GST push up price of services, says Fels

AAP General News (Australia)
04-29-2001
Fed: Factors other than GST push up price of services, says Fels

CANBERRA, April 29 AAP - Steep increases in the prices of some services were often
due to factors other than the GST, Australian Competition and Consumer Commission (ACCC)
chairman Allan Fels said today.

New Australian Bureau of Statistics figures, published today in The Sun-Herald, showed
the cost of many services had risen by more than the 10 per cent GST.

House and car insurance rose by 38.5 per cent between July 2000 and March 2001, despite
the ACCC predicting only a seven per cent rise.

Sports fees went up 12 per cent, hairdressing costs 11.7 per cent, electricity 12 per
cent, public transport and taxi fares 11 per cent, takeaway and restaurant meals 10.4
per cent, and cigarettes 18 per cent.

"We were looking at the effect of taxes alone, not other factors, on prices, and as
we leave the GST behind us a bit other factors push up prices," Professor Fels told the
Ten Network.

"In the case of household insurance, I'm sure that was due to the floods and fires
that were generally known would push up household insurance premiums."

He said some prices, such as for clothing and footwear, ended up being lower than forecast
by the ACCC.

The ACCC's GST price watch finishes on June 30 next year unless extended by the government.

AAP fh/cdh/bwl

KEYWORD: TAX ACCC

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