An inquiry into price gouging in Australia has seen big business accused of using rising inflation to disguise their increasing profits while households struggle to make ends meet during a cost-of-living crisis.

The inquiry, commissioned by the Australian Council of Trade Unions (ACTU), is examining price gouging across a range of industries, including banks, insurance companies, supermarkets, and energy providers.

Professor Allan Fels, a former boss of the Australian Competition and Consumer Commission (ACCC), was appointed to oversee the inquiry.

He said the goal of the inquiry is to determine what has caused prices to significantly rise in recent months while millions of Australian households were impacted by the high cost of living and companies reaped substantial profits. 

"There's endless expert discussion about inflation and interest rates and fiscal policy and wages, never do they talk about the prices themselves, the effect on our cost of living and on us as consumers and how prices are actually set by business. That's always left unsaid," Professor Fels said.

"There's evidence that profit mark-ups have gone up in Australia and globally, and there's evidence that competition has been reduced here and globally."

Professor Fels said world events, including the war in Ukraine and the COVID-19 pandemic, have been used by big business as an excuse to keep prices high.

"Industry feels at the moment they can get away with things without anyone probing."

Since it was announced in August, the inquiry has received 600 submissions, which Professor Fels said reflected the "high degree of public concern" about the cost of living, including food, energy, banking, and insurance.

If there was sufficient evidence of companies engaging in profiteering or price gouging, Professor Fels said they would be publicly named, but if there were "significant doubts" they could be referred to the government.

'People are crumbling'

One of those 600 submissions received by the inquiry was from Melbourne nurse Danielle, who asked for her surname not to be published.

She has seen all of her bills rise this year despite being conscious of her usage and expenses, including a 40 per cent increase on her home insurance without having made a claim.

"There's been no reason or justification around the bill hike, which for me has been really distressing," she said.

Danielle already works full time, but is considering getting a second job to make ends meet.

"It's really overwhelming, and a really difficult position to be in. I never thought I'd be considering whether I pay for a family member's medication or whether we can go to the doctor," she said.

Speaking at the inquiry in Melbourne on Thursday afternoon, Danielle told Professor Fels she felt "a little bit vulnerable" to share her experience, but was grateful for the inquiry and the opportunity to speak.

"I feel it's important to be part of this inquiry and to let people know the struggles that people are dealing with every day," she told the hearing.

"People are crumbling and the pressure of it all is absolutely significant."

She told the inquiry that she has to compromise other areas of her life to pay for items that she would have never previously considered "luxuries".

"I get really distressed when I'm invited to a birthday party, or invited to a restaurant or cafe for lunch or dinner because they're luxuries now," she said.

"I feel fortunate because I know here are people that are doing it a lot worse than I am and are having to make more critical decisions, but there are times where I've worn shoes with holes in them, I've skipped meals or I've lived off toast for a little bit.

"There's so many people suffering who are being told because of this price gouging, they have to suffer some more."

Danielle told the hearing while her bills have increased by an extra $8,700 a year, her wage has only risen by $102.

"So that's $2 a week and I'm trying to find at least $168 a week to meet that huge deficit.

Higher wages not to blame for price rises

The inquiry heard increased costs for businesses, like wages, are not the cause of recent price spikes since they've grown less than inflation.

Annual inflation reached a 30-year high of 8.4 per cent in December before easing to just under 5 per in July, but remains well above the Reserve Bank's target range of 2-3 per cent.