Australians being price-gouged for childcare, electric vehicles and air travel, former ACCC head Alan Fels says

A scathing new report highlighting the exorbitant prices being paid for childcare, air travel and electric vehicles has been cited as ample reason for Australia to urgently introduce a price-gouging watchdog.

The sectors were just three being singled out by leading economist and inaugural Australian Competition and Consumer Commission chair Allan Fels in a new report, which found high prices were being driven by “weak and ineffective competition in too many markets”.

Professor Fels told the National Press Club on Wednesday he had “considerable reservations” about childcare prices, saying both the early childhood education and care sectors were “riddled with overcharging”, principally because of the market’s design and the difficulty for people to switch services.

“Both shaming and price regulation should be considered to rectify overcharging,” Prof Fels said in the report, commissioned by the ACTU.

It was just one example of Australians paying too much, too often.

He called for a national competition and prices commission, which could look into high prices. He explained the reasons behind several glaring examples.

He blamed unwarranted import restrictions on electric vehicles for Australians having to pay about $10,000 more for an EV than New Zealanders.

“New Zealand does not have it and its prices are far lower,” Prof Fels told the National Press Club on Wednesday.

“If we remove that restriction in Australia the price of electric vehicles would fall by about $10,000 and there would be beneficial emission and environmental effects.”

But the main factor for most of the excessive prices being paid by Australians came down to one thing.

“The cause is weak and ineffective competition in too many markets,” he said.

He called for a national competition and prices commission, which could look into high prices.

The commission could give effect to the government’s national competition policy and look at the reasons behind high prices, he added.

The government should also greatly strengthen competition policy to stop enabling price gouging, the economist said.

However, he criticised the federal government for failing to lead by example, citing its refusal to allow more Qatar flights into Australia as a case of it sanctioning very high prices - in that case, in Qantas’s favour.

The economist also called for legal powers to expose firms that charge excessive prices to be reinstated, after they were used by the Coalition in 2000 when the GST was introduced.

Governments should require bank accounts to be portable in the same way they years ago made mobile phone businesses let customers switch suppliers and retain their numbers, he said.

Prof Fels noted the government had accepted there was a strong case for an in-depth review of supermarket pricing, with Prime Minister Anthony Albanese announcing a year-long investigation into the matter by the ACCC in late January.