On 12 November, the Australian Parliament passed the Trade Practices Amendment (Clarity in Pricing) Bill 2008. This will affect the use of component pricing in advertising, such as "$20 a month for 12 months" or "$1,000 plus delivery and GST".

Once the Bill receives Royal Assent, advertisers may continue to use component pricing, but only if they also include in their advertisements (and other promotions) the Single Price for the product.

That Single Price is the total amount a customer would pay to the seller to obtain the product.

  • The Single Price must include the price for all components that are quantifiable. A component price is quantifiable if it can be calculated.
  • If there are some components the price for which can not be quantified, the Single Price need not include that component, but the advertisement must make it clear that the customer will have to pay the Single Price and the cost of this component (otherwise the advertisement would be misleading and deceptive).
  • A component is not unquantifiable if it simply varies from place to place or transaction to transaction. In these cases, the advertiser must include in the Single Price the minimum cost of that component and promote the Single Price using language such as "from $1,500.00".
  • The Single Price does not need to include – and should not include – the price of any optional product features or additional goods or services the consumer may choose, but must include all amounts a costumer must pay in order to obtain the goods or services. For example, if customer must pay by credit card, the compulsory surcharge must be included in the Single Price.
  • Where the customer must pay delivery, delivery charges may be included in the Single Price, but need not be. If they are not included in the Single Price, the delivery charge must be featured in the advertisement separately.
  • If the cost of delivery varies, the advertiser must feature the minimum amount payable for delivery. To avoid being misleading and deceptive though, the advertisement must clearly state that this is the minimum, stating something like "delivery from $35 in metro areas".
  • Stating the minimum delivery charge or the minimum price of the product (where the Single Price includes the cost of components that cannot be quantified) does not prevent the seller negotiating a lower price with the customer. Negotiating a lower price will not breach the TPA.

The Single Price must be featured as prominently as any component is featured in the advertisement or promotion.

These changes do not apply to purely business to business transactions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.