A former consumer watchdog boss will dig into the thorny issue of big business price gouging via a union-backed inquiry.
Esteemed economist and former Australian Competition and Consumer Commission chair Allan Fels has been given the task of investigating the extent of price-gouging in the Australian economy.
The inquiry has been set up by the Australian Council of Trade Unions, which has been concerned excessive corporate profits are doing more to fuel sky-high inflation than rising wages.
Inflation started surging last year and has triggered a series of interest rate rises to bring it under control, putting Australian households under financial pressure.
ACTU secretary Sally McManus said working people were feeling the effects of higher prices.
“It’s only right we take a look to see what’s fuelling these rises and what can be done about it,” she said.
The role of corporate profits in the inflation outbreak has been hotly debated, with Treasury and Reserve Bank analysis suggesting profits were not significantly driving up prices, with the exception of the mining sector.
The Australian Chamber of Commerce and Industry chief executive officer Andrew McKellar said the union movement was angling for an outcome that fitted in with its narrative.
“The ACTU is on record of making many unsubstantiated claims of unjustified, inflation-fuelling price increases, but the evidence simply does not stack up," Mr McKellar said.
But Professor Fels said it was time to investigate the matter.
"It’s time to take a serious look at what is a serious problem - does Australia have a price gouging problem, and if so, to what extent?" he said.
Deloitte Access Economics partner Stephen Smith said the discussion about the influence of corporate profits on inflation had been driven by dogma rather than fact.
"The reality is that it's somewhere in the middle," he told AAP.
Mr Smith said it was debatable price gouging was a major source of Australia's high inflation, but at the same time, a lack of competition in key sectors was contributing to higher prices than should otherwise be the case.
The economist said a competition expert was the ideal candidate to lead such an inquiry, with market concentration an issue in sectors such as banking, airlines, supermarkets, insurance and telecommunications.
But Mr Smith was worried a union-commissioned inquiry may not produce any tangible outcomes and said a lack of competition should be a higher priority for governments than it had been in the past.
"We should be aiming for an economy that is hyper-competitive," he said.
"We should be seeking as much competition throughout the Australian economy as possible, across all sectors, for the benefit of consumers, and to ensure that we're innovating and have an economy running as efficiently as possible."
The inquiry will hear from the public and any other parties interested in lodging a submission.
