Consumer Pulse Results: May 2016
The Consumer Pulse Report shows a sharp increase in consumer concern about savings or investments, leaping from 57% in December 2015 to 67% in March 2016. Consumers of all ages are concerned about the cost of essential medicines (63%) and the cost of visiting their GP (55%). Coupled with the recent private health insurance price hike, health cost pressures are starting to hit home.
The report also found electricity remains the number one cost concern at 77%, followed by food and groceries (72%) then health or medical expenses (68%).
More can, and should, be done to make sure that consumers get a fair deal, especially on essential services. With the election coming up, CHOICE has written to politicians to let them know what they can do to fix these big consumer problems.
CHOICE has called out five things political parties can promise consumers that will help with cost-of-living issues and give people greater confidence in the financial system.
1: Reform health insurance
Health insurance now costs a lot more than it used to. There has been a 48.3% cumulative rise in premiums since 2009 and a rise in the number of 'junk' insurance policies that cover less than 1% of services at hospitals but are still eligible for tax concessions. Consumers need better information to navigate this complex market, including information about the actual fees charged by doctors and benefits provided by insurers. .
CHOICE has called for political parties to support a range of measures to make health insurance better and fairer. We think the Private Health Insurance rebate and the Medicare Levy Surcharge shouldn't apply to low-value junk policies. Consumers should be given more transparent information earlier about premium increases to provide more opportunity to switch products, and the process of switching needs to be smoother, removing paperwork barriers so consumers can easily drop dud policies.
2: Fund the finance regulator, ASIC
After years of scandals that have seen banks put profits first and consumers last, it's hardly surprising that 87% of people support stronger protections and regulations against the finance and banking sectors.
The Australian Securities and Investments Commission (ASIC) needs to be properly funded to fight the big banks and at a minimum successive cuts to its budget should be reversed.
There's also an option to have the big banks and financial institutions cover the costs of regulation; 74% of people agree that banks, investment firms, insurers and financial advisers should have to pay to cover the costs of regulating their industries. We know similar systems work well across parts of Europe, including the UK, but any industry-pays funding model needs to make sure banks and finance companies can't influence how ASIC does its job.
CHOICE wants political parties to commit to an industry-pays funding model for ASIC that leads to secure, increased and non-conflicted funding in the long-term.
3: Give consumers their data to compare products
CHOICE wants all parties to back an open data policy to give consumers access to the information businesses hold about their behaviour and preferences so they can compare products and get a better deal.
Right now your data is used by big companies to refine their marketing. Imagine if instead, you could use your data to help you shop around and find the best product for your needs.
This already happens in the United Kingdom and CHOICE thinks a similar system could be a game changer for the Australian electricity, health insurance, telco and banking sectors. Both the Federal Government and the Labor Party have issued statements of support for an open data system but can go further by committing to timelines and funding.
4: Clean up the credit card market
There are major problems in the credit card market. The cost to banks to provide credit is decreasing but consumers are paying increasingly more in interest and annual fees. CHOICE has called on the political parties to change the National Consumer Credit Protection Act to help consumers compare, save and switch. We want to see new laws that will:
- require card providers to let consumers cancel credit cards online
- require monthly statements and marketing to clearly disclose interest rates and annual fees
- to make card providers alert consumers when they are about to face drastically high fees because a balance transfer deal is about to end.
CHOICE has also called for formal investigations into credit card number portability, so consumers can take their details with them when they switch, and into standardising and increasing minimum monthly repayments so people aren't stuck only paying off interest for decades.
5: Make it easier to find fuel-efficient cars
CHOICE wants the next Federal Government to introduce mandatory fuel efficiency standards to help people find cars that are cheaper to run. Australia is the only major advanced economy without mandatory standards for vehicle fuel efficiency or greenhouse emissions. The result is that Australian consumers pay more to run their cars and there is a broader risk that our market will become a dumping ground for inefficient, costly-to-run vehicles.
It's also really difficult to find out how much fuel your car will actually use. While new vehicles must display a Fuel Consumption Label on the front windscreen, research from CHOICE and our UK counterpart Which? shows a large and growing gap between claimed fuel consumption and the real-world performance of vehicles. This means Australians cannot make meaningful decisions about the costs of running new vehicles, and are paying hundreds of dollars more than anticipated every year.
CHOICE wants political parties to commit to establishing fuel efficiency standards by 1 July 2017 and to change the way cars are tested to give consumers accurate information about real-world fuel costs.
May Consumer Pulse Results