Chalmers drags feet on establishing ACCC airfare price gouging probe

The reinstatement of airfare price monitoring promised by Treasurer Jim Chalmers cannot commence because he has not filed the relevant paperwork.

The consumer watchdog is unable to restart a probe into airline price gouging because it is still waiting on the Treasurer to file the relevant paperwork.

In a media statement released on October 18, Treasurer Jim Chalmers announced he would instruct the Australian Competition and Consumer Commission (ACCC) to recommence monitoring of airfares.

However, more than two weeks after a press release entitled ‘ACCC to monitor Australia‘s air passenger services’ was distributed, no such direction has been made.

“The Albanese government will direct the Australian Competition and Consumer Commission to monitor domestic air passenger services to help ensure Australians see the benefits of a competitive airline sector,” the media release read.

Despite previously promising to reinstate airfare price monitoring, Dr Chalmers is yet to issue the relevant paperwork. Picture: NCA NewsWire / Martin Ollman

Under Australian consumer law, the treasurer is empowered to give the commission written direction to monitor prices.

In a statement, the ACCC confirmed the direction had not been received.

“The ACCC is currently engaging with Treasury on the details of the airline monitoring direction,” an ACCC spokesperson said.

The price monitoring regime was established by former treasurer Josh Frydenberg during the pandemic to ensure healthy competition in the aviation industry after Virgin Australia entered administration.

Mr Frydenberg, who directed the competition watchdog to commence airfare price monitoring in June 2020, did so on the same day he announced the measure.

In June, the Albanese government allowed the program to lapse after it refused to fund its extension. The decision was made despite the ACCC’s final report, which found the airline industry was behaving as an “effective duopoly”.

With the busiest period of air travel ahead, the consumer watchdog is still unable to commence the monitoring. Picture: NCA Newswire / Gaye Gerard

Under the program, routes, capacity, pricing, passenger loads and financial performance, were detailed in quarterly reports.

In documents tabled to a Senate inquiry in early October, it was revealed the Treasurer’s office had no in-principle objection to the continuation of the ACCC price monitoring, provided its extension was a priority for Transport Minister Catherine King.

ACCC boss Gina Cass-Gottlieb has previously called on the government to examine competition in the aviation sector.

“We do see a case for reinstatement of a direction that would look to the status of competition, and survey prices, costs and the manner of operations,” she told The Guardian in September.

The Treasurer’s office was contacted for comment but did not respond on the record.