The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 11/07/2007

Interview with David Speers
Sky News

Wednesday, 11 July 2007

10.00 am

 

SUBJECTS: Grocery prices, inflation

TREASURER:

Well it is poorly thought out of course and again, he hasn’t done his homework.  The Australian Bureau of Statistics has been monitoring grocery prices for decades and they do that for the purposes of compiling the Consumer Price Index.  And what that monitoring shows is under the Labor Government prices rose 5.2 per cent a year and under the Coalition 2.4 per cent.  That is, prices rose twice as fast under Labor.  Kevin Rudd obviously hasn’t done his homework.

SPEERS:

But apparently prices rose 15 per cent in the last three months for fruit and veg. 

TREASURER:

We have had a number of one-off factors, including the cyclone that pushed up the price of bananas.  But when you take out all of the prices over a 10-year period, they have risen 2.4 per cent, and under Labor the increase was double.  Labor is the party of high grocery prices and Labor is the party of inflation. 

SPEERS:

But is there anything wrong with the idea of publishing on a special website at a regular interval what is happening with grocery prices so that we all have a better idea?

TREASURER:

Well the Australian Bureau of Statistics does publish what is happening with prices.  It is the most comprehensive publication that is done.  That is not a new idea.  That has probably been going on for 70 years.  And unfortunately for Mr Rudd, when you have a look at it, what it shows is prices rise twice as fast under Labor.  Now, the question is, what you want to do with this information – another point Mr Rudd hasn’t thought of by the way.  Where there has been evidence in markets of misuse of market power or of collusion, the ACCC has taken action – action in relation to the bread market, and it took action in relation to the liquor market already, just to name two cases.  So this is all being done, it has all been in the courts and prosecuted.  Kevin Rudd hasn’t done his homework and it is not a new announcement.

SPEERS:

Well Woolworths is tipped to announce a record profit of $1.3 billion, can you understand consumers looking at that and saying, ‘gee, that is a bit rich’?

TREASURER:

Well, look, it depends on how much they sell and it depends at what prices.  I will make this point: that if you can get a price, a better price than Woolworths, people will take it.  And that is what happens in a competitive market. 

SPEERS:

But when there is only two major players…

TREASURER:

Well I don’t think that is right either.  I think in the retail market there are alternatives, and of course, where you get competition you get lower prices.  This is all about producing a competitive market.  But we have been monitoring prices through the Australian Bureau of Statistics and in markets where there has been misuse of power through the ACCC for decades.  Where has Kevin Rudd been?

SPEERS:

Does it frustrate you that instead of focusing on unemployment, on inflation, on the macro figures, Kevin Rudd keeps appealing to the hip-pocket, on petrol, on housing and now…

TREASURER:

He doesn’t appeal to the hip-pocket at all.  What is his tax policy?  What is his family policy?  He doesn’t appeal to the hip-pocket, what he does is he discovers that we have been monitoring prices through the ABS and the ACCC and he announces it as if he has found some new seam of gold.  What he shows me is a classic case of somebody who hasn’t done any policy work, doesn’t understand the economy and is going to get through on media events.  And I think you are going to see a lot more of them.  But you see, the people of Australia are more intelligent than that.  Here is a question for Mr Rudd: do the price monitoring that the ABS is doing show that prices rise twice as fast under Labor as they do under the Coalition? 

SPEERS:

Well, Labor may say in response to this, that you are standing up for the big retailers – Woolies and Coles – what would you say to that?

TREASURER:

We don’t stand up for any particular companies.  What we do is we produce an environment in which people can get jobs and business can be profitable.  We don’t want unprofitable business because we need them to employ average Australians.  And we don’t intervene for or against any company.  So what we do is we keep prices low.  And look, here is 10 year assessment of prices.  Over 10 years – that is ironing out every wrinkle – prices rose 2.4 per cent under Coalition and 5.2 per cent under Labor.  In other words, if you want to go for the Labor Party you will be going for double price increases that you have seen over the last 10 years. 

SPEERS:

Treasurer, thanks for your time. 

TREASURER:

Thanks very much.