SUBJECTS: Economy, GROCERYchoice website, unit pricing
NICOLE DYER:
It seems all roads led to the Gold Coast this week for the money men in Australian Federal Politics. Yesterday Shadow Treasurer Malcolm Turnbull was here, he was not backward in coming forward when it came to the Federal Government blaming it for a big fall in business and consumer confidence.
Today Federal Treasurer Wayne Swan will be guest speak at the Investment and Financial Services Association annual conference. The same conference Assistant Treasurer Chris Bowen is addressing.
Mr Bowen, welcome to the coast.
CHRIS BOWEN:
Good morning Nicole, good to be here.
NICOLE DYER:
What do you say to claims, firstly, by the Shadow Treasurer that the drop in confidence in the economy is your Government's fault?
CHRIS BOWEN:
Well Malcolm Turnbull would have you believe that Kevin Rudd's responsible for the drop in confidence in the United States, the United Kingdom and every developed country in the world.
You might not have noticed there's a world economic situation going on which has led to confidence falling around the world. There's also, in Australia, been the result of several interest rate increased in a row, which occurred under their watch. So there is no doubt there are confidence issues in the Australian economy at the moment. Our economy is affected by the international turbulence, but we are well placed to withstand it and we are well placed to get through it in reasonably good shape.
NICOLE DYER:
So what is your Government going to do about it?
CHRIS BOWEN:
Well our response has been a quite tough Budget to help the Reserve Bank put downward pressure on interest rates and to point out the fundamental strengths in the Australian economy and Mr Turnbull might want to do the same.
NICOLE DYER:
Well we heard that there was some criticism that perhaps the Federal Government's been putting too much pressure on the Reserve Bank to keep interest rates going up, in which case now we hear there may be a reverse; we could see interest rates go down. Has your Government been a bit conservative?
CHRIS BOWEN:
We don't tell the Reserve Bank how to do their job, they're independent, we don't speculate on their decisions. But I will say this – the Reserve Bank's made it very clear that they need to increase their interest rates to put downward pressure on inflation which is at a 16 year high and for the first time the budgetary policy which is in our control has been assisting them in putting that downward pressure on inflation which the Reserve Bank has acknowledged. So when you're putting downward pressure on inflation you need to have both levers of the policy mechanism moving in the same direction. Not having the budgetary policy working one way and putting all the pressure on interest rates on the other hand and that's what we've been doing.
NICOLE DYER:
Grocerychoice.gov.au – it was the website launch yesterday that compares the price of food baskets from major retailers and independents. It was one of the recommendations from the grocery price inquiry. The Retailers and Shopkeepers Association here in Queensland says that this website is political rubbish. The Government has spent $14 million of taxpayer money on a site that contains data that is one month old. How do you justify that expenditure on a website if the information's old?
CHRIS BOWEN:
Well this is a snapshot and I think that Mr Driscoll comment – Mr Driscoll's quite a political operator and has quite an agenda that he likes to run – but this is a snapshot which helps consumers find the better value groceries in their area.
Now, it will be more helpful for some people than others, but to take a few areas – wherever Aldi is operating, they are substantially cheaper and this provides a guide to people to give them that information. Now, people will make their own decisions based on quality, convenience and on choice. But this is one of the tools. We've announced several tools over the last couple of days, including unit pricing, which will give people a lot more information when they're at the supermarket. And freeing up the barriers to entry to get more competition into the Australian grocery market. So one mechanism by itself is not the only Government response. This is part of a range of responses that we've put out over the last couple of days.
NICOLE DYER:
Well, getting back to the website. $14 million is a lot of money – why have you chosen to lump major retailers and give them their own special column, and yet independents are all put in the one group.
CHRIS BOWEN:
Well you could have more details there, but that would increase the cost.
NICOLE DYER:
The cost of the website? But wouldn't that be worthwhile if it's giving consumer more choice, more information, so that they can get the cheapest groceries?
CHRIS BOWEN:
What we've tried to do is strike a balance. What we can't have is every supermarket in the country with every item in the country. What we've tried to do is strike a balance. So we'll see how it goes over the next couple of months. There were 850,000 hits on the website yesterday, there's obviously a lot of interest. We'll talk to the consumers and the sector about how it can be improved over coming months, which was always our intention, and to refine it as we go. But it is a useful tool for many people.
NICOLE DYER:
But even the Prime Minister Kevin Rudd; we just heard in ABC News at 9 that the website may need some changes following criticisms that it does not have enough information.
CHRIS BOWEN:
Well I said that on the day we launched it that we would monitor it to ensure that it was as useful as it could be.
NICOLE DYER:
Do you know what these changes would involve though?
CHRIS BOWEN:
Well, no, because we'll talk to the sector and consumers as we go and make refinements as we go. Look, the more information you put on the website, the more cost it is to collect so this is the balance that we've struck.
NICOLE DYER:
The website though is only 24 hours old and already an admission from our Prime Minister that changes will be made. Are you a little red-faced about this?
CHRIS BOWEN:
Of course not. I said when I announced the website that we would keep it under monitoring and I think the Prime Minister said something very similar this morning.
NICOLE DYER:
Scott Driscoll – going back to the Retailers and Shopkeepers Association – believes the Federal Government should be prohibiting international companies from entering the market.
Is the Government going to consider that?
CHRIS BOWEN:
Well I hadn't heard that, but that's an extraordinary thing to saying. Saying that we should have less competition in the Australian grocery market.
NICOLE DYER:
But the rationale for that comment is perhaps we should be supporting local supermarkets.
CHRIS BOWEN:
Well competition is how consumers benefit. I find it extraordinary that he would call for the Australian market to have barriers erected to stop other people competing for consumer's dollars.
NICOLE DYER:
But at the moment if you look at Franklins – South African, Aldi is a German company, then you've got the major retails chains who have joined forces.
Surely if you were supporting locally grown supermarkets, that would already add competition to what is a fairly competitive market?
CHRIS BOWEN:
Well consumers will make the choice about where they shop. Consumers should be given that right, it's not up to the Government to say 'you shall or shall not shop at an Australian-owned supermarket', it's up to consumers to balance what they want.
Aldi has been a competitive force for good in the Australian supermarket industry. They've put competitive pressure on prices. A lot of people love to shop there. Why should I or the Government say 'people should not be allowed to shop at Aldi because how could it be German-owned when they're creating Australian jobs, employing Australians in their supermarkets'.
NICOLE DYER:
Family First Senator Steve Fielding welcomes unit pricing, but has told the Australian that he's concerned that no start date has been announced. When will unit pricing begin?
CHRIS BOWEN:
Look we need to work with the industry through this. If we said unit pricing shall begin tomorrow there would be substantial compliance costs for supermarkets, particularly smaller supermarkets. We need to work through; the Government needs to work through with industry. The complexities are ranged in unit pricing. We'd like to see it in, in 12 to 18 months. Some supermarkets will choose to do it sooner than that, which I would welcome. But it is a useful tool for consumers, but it also doesn't come without a cost, which we need to work through.
NICOLE DYER:
Thanks very much for you time.