The Australian Competition and Consumer Commission today issued a small business pricing kit to help small business to identify cost savings as a result of the New Tax System changes.
"The kit helps small business to adjust their prices and ensure benefits are passed through to consumers, as well as ensuring that pricing decisions take into account overhead costs", ACCC Chairman, Professor Allan Fels, said.
This free small business initiative includes:
- Compliance Guide for Small Business;
- Cost Savings Estimator;
- Retail Price Adjustor; and
- the ACCC Price Exploitation Guidelines.
The kit comes in a business card-sized CD ROM.
The Compliance Guide for Small Business explains in plain English what small business must do to comply with the ACCC price exploitation guidelines. It provides many practical examples and tips.
The Cost Savings Estimator is for small business with an annual gross revenue of less than $10 million. It allows them to enter information from their profit and loss statement and get an estimate of the likely cost savings from the New Tax System changes.
The New Tax System will cut business costs from July 2000 by abolishing Wholesale Sales Tax and other indirect taxes, as well as reducing excise on petrol and diesel. Businesses must pass these savings on in full to consumers.
The Retail Price Adjustor assists small retailers to adjust their retail prices taking into account cost savings in overheads, the removal of wholesale sales tax and adding GST. It also calculates the amount of WST in stock on hand.
"It is my experience that most businesses want to do the right thing, not only in complying with the law, but also for their customers", Professor Fels said.
"Businesses must pass on any savings from the New Tax System in their prices. They should also know how their suppliers are passing on the savings to them. The guide and savings estimator will assist in both these areas".
The cost savings estimator and retail price adjustor software are provided as an aid to small business. The ACCC does not consider it compulsory for businesses to use them.
The ACCC is committed to helping small business - firstly, by ensuring that suppliers' savings are reflected in the prices they charge their business customers, and, secondly, by providing information and guidance. The small business pricing kit is part of this assistance. The ACCC will continue to produce News For Business information sheets and checklists on specific topics to help small business deal with the transition to the New Tax System.
The Trade Practices Act 1974 makes it an offence for business to engage in price exploitation. Failing to pass on net savings resulting from the New Tax System is likely to constitute price exploitation. The ACCC has shown that it will act quickly to stop any illegal conduct by taking action against those who do not comply with the law (thereby gaining an unfair advantage).
The kit for is free to small business. The Small Business Compliance Guide will also be available in a booklet. The booklet and CD ROM can be obtained by calling the GST Price Line on 1300 302 502.