Customers happy to cop GST rises, group finds

Shopkeepers appear to be playing fair, but consumers are annoyed by the actions of utility companies since GST was raised to 15 per cent.

Consumer customer adviser Maggie Edwards told the Herald subscribers seemed to be happy to absorb the GST price increases imposed by retailers from October 1, as they had been clearly flagged.

But many were angered by the behaviour of utility providers.

"People are understanding of the small retailers, but certainly they feel stung by the power and telephone companies," Ms Edwards said.

Power companies were criticised after charging the new GST rate in early October for power used in September.

But while that might seem unfair, Consumer says the companies are within their rights as the increase applied to all invoices dated from October 1.

"Although your electricity was supplied to you in September, the law says the date of supply is the date of the invoice," according to the Consumer website.

Retailers Association chief executive John Albertson said his organisation had warned members if they were going to raise prices because of GST, that was the only increase they could make.

"Our advice to members was, 'If you are going to talk about a price rise because of GST, it has to be just GST'."

If they intended to raise prices for any other reason, they needed to be open about it, he said.

And the Commerce Commission agrees with Mr Albertson's position.

"Businesses risk breaching the Fair Trading Act if price increases are misleadingly represented as being due to the GST increase," a spokeswoman said.

"When a business claims an increase in price is due to the increase in GST, when the increase is far greater than the cost of the GST rise, it potentially breaches the Fair Trading Act."

But while retailers were free to put any price they wanted on an item, many prices remained the same after October 1, Mr Albertson said.

"Across the market there have been many price points that have stayed exactly where they are."

It had been important to keep consumers informed about price rises, and as a result there had been few complaints about opportunistic retailers, he said.

Though the Commerce Commission was unable to give figures for complaints directly related to the October 1 GST increase, it had received more than 200 complaints with the phrase GST in the description, the spokeswoman said.

"Most of those complaints have been assessed as unlikely to breach the Fair Trading Act, or not meeting enforcement criteria for further action.

"In many cases consumers were simply moaning about the tax increase, and raising no specific Fair Trading Act issues."

Of the cases brought to the commission's attention, about 30 were awaiting assessment, eight were completed and one still active.

Four compliance letters and three warnings had been issued.

Mr Albertson said he was not aware of any firms still holding off on imposing the new 15 per cent rate.

A month on, businesses taking delivery of new stock would have received the goods "priced to the market conditions of today", meaning GST would have been added to the wholesale price.