Government comes down hard on ‘hidden fees’ in cost of living blitz
Cost of living seems to be the government buzz topic for 2024, as households continue to struggle in the face of rising interest rates, utilities, food and inflation.
Australia’s inflation rate was recorded at 4.1% over the year leading up to December 2023, with the consumer price index (CPI) continuing to rise in 2024. This inflation has driven up the prices of groceries, rent, and energy, placing extreme financial pressure on many Australian households. Grocery costs rose by 9% between June 2023 and June 2024? – with supermarket chains Coles and Woolworths copping heat from the ACCC for price gouging.
According to the Australian Bureau of Statistics (June 2024), Selected Living Cost Indexes, Australia, all five Living Cost Indexes (LCIs) rose between 1.2% and 1.4% in the June 2024 quarter.
Insurance and financial services and Food and non-alcoholic beverages were the main contributors to the quarterly rises across all LCIs, with housing was also a main contributor for all LCIs apart from Self-funded retiree households.
The cost of utilities, including electricity, water, and gas for a standard apartment, averages around AUD 304 per month, while internet services can cost around AUD 82?. Transport expenses have also increased, with the average one-way local transport ticket costing approximately AUD 4.89 and monthly passes at around AUD 168?.
These statistics highlight that while general inflation has slowed slightly, the cost of essentials like housing, food, and utilities continues to place significant pressure on households across the country.
In response Prime Minister Albanese, along with treasurer, Jim Chalmers, announced a federal government crack down on “dynamic pricing” of concert tickets, “dodgy” trading practices and hidden fees and subscription “traps” for online shopping, gym memberships and airline tickets.
It’s the next stage in the latest consumer-focused competition and pricing changes proposed by the government, with a recent ban on debit card fees promised along with an investigation by consumer watchdog into excessive card costs – all highlighted as cost-of-living relief.
“From concert tickets to hotel rooms to gym memberships, Australians are fed up with businesses using tricky tactics that make it difficult to end subscriptions or add hidden fees to purchases,” Albanese and Chalmers said.
“These practices can distort purchasing decisions, or result in additional costs, putting more pressure on the cost of living.”
Ticketing giants Ticketmaster and Ticketek previously defended the controversial dynamic pricing model – arguing that it is set by artists and that it helps stamp out the influx of ticket scalpers.
Commenters on the Guardian article about the practice argued:
“…it’s the new form of price gouging. It is used by online retailers to adjust the price you see when you visit their site. They can do this because by tracking your spending they can work out how much you can afford… For instance the tech exists for a large fast food chain to remotely adjust prices when sales increase at a particular store or multiple stores as they get busy, say between 7 and 8 am to catch the crowd on their way to work. It could be applied to petrol stations or super markets. It needs to be outlawed across the board not just for concert tickets…”
While another added, “It’s extraordinary that we ever accepted “dynamic pricing” also known as “how much can we get away with”. Yes, of course, people are free not to buy. But fundamentally, if you enter a queue with an expectation of a price range and it’s way beyond, it moves from normal consumer experience to exploitation… Unfortunately, these ticketing companies have so abused their position, that government intervention is required. Truly shameful.”
In response to the Prime Ministers recent purchase of a $4.3m home, the Australian Greens Party made a statement on their Instagram page, writing, “Millions of people across this country are struggling right now to afford a place to live. We urgently need real action on the housing crisis like scrapping negative gearing and the CGT discount, freezing and capping rent increases, and creating a public developer to build homes to buy and rent at prices people can actually afford.”
“The Labor government should read the room right now and come to the table to negotiate a plan with the Greens that will actually tackle the scale of this crisis.”
Do you think these recent promises by the Labor government are enough to impact cost of living pressures?
