Qantas won’t pass on carbon tax repeal savings

Doubt raised over whether consumers will see Abbott’s promised $550 annual saving.
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01.Consumers left out in the cold again

qantas carbon tax toy qantas plane surrounded by money

Qantas has removed its "carbon surcharge" on domestic and international airfares in anticipation of the imminent repeal of the carbon tax, but consumers won't be better off.

The airline reportedly won't pass on savings to consumers because it hasn't been able to recoup the cost of the carbon tax due to competition in the airline industry.

The airline joins a growing list of companies that say consumers won't see much benefit from the government's repeal of the carbon tax. Virgin Australia and Woolworths have also made statements to that effect. Virgin, which didn't implement a a carbon surcharge when the tax was introduced in 2012, told Fairfax prices on its tickets won't fall, despite the lower operating costs, while Woolworths said: "Just as prices didn't increase when the tax was introduced we don’t expect any substantial change should it be repealed."

This news comes despite the fact that Prime Minister Tony Abbott said last month that households would "benefit to the tune of $550 a year" as a result of the repeal. He said: "This is a $550 a year windfall to every household in Australia."

What the ACCC says

The Australian Competition and Consumer Commission (ACCC) has been tasked with monitoring approximately 400 companies that have had to pay the carbon tax. A spokesperson says: “As part of its current price monitoring role to assess the general effect of the carbon tax scheme in Australia, the ACCC has sought information from a number of entities that had made public statements about the impact of the carbon tax on their prices, including airlines. The ACCC is currently assessing the information received.”

What CHOICE wants

Businesses were quick to pass on the costs of the carbon price to consumers when it was introduced, but with the carbon tax now on the way out, they’re not so keen on passing on the savings.

Savings made by the repeal of the carbon tax should be passed straight on to consumers. By refusing to do so, Qantas and others are taking advantage of a boost to their bottom line at the expense of consumers.



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