ANDREW LEIGH:
Good morning. Thanks everyone for coming along. My name’s Andrew Leigh, the Assistant Minister for Competition, Charities, Treasury and Employment. I’m delighted to be able to talk to you today about the announcement of CHOICE’s second quarterly grocery price monitoring report.
Labor understands that Australians are doing it tough, and we want to help deal with those cost‑of‑living pressures. Getting information to the hands of shoppers means people can get the best deal at the checkout and stretch the household budget just a little bit further. And that’s why we funded CHOICE, the respected consumer group, to do a shadow shopper exercise, working out the price of a representative basket of groceries at the major supermarket chains. Their first report came out 3 months ago, and today we’ve got the results of CHOICE’s second shadow shopper report.
That involved sending shoppers into 104 different supermarkets across Australia, comparing prices across the major chains. Again, in common with the first report, ALDI is the cheapest supermarket, but now if you include specials, Coles has pipped Woolworths for second place.
This demonstrates the value of getting information out there. It doesn’t just allow consumers to get the very best deal, it puts pressure on the supermarkets in order to provide the best deals to their shoppers. Australia’s supermarket sector is one of the most concentrated in the world, and that’s why the Albanese government is committed to ensuring that Australian shoppers get the very best deal.
We’re also doing more across the competition space. This week, we’ve announced the release of the draft of the mandatory Food and Grocery Code of Conduct. This governs the supermarkets’ relationship with their suppliers.
Significant market concentration means that supermarkets might not just squeeze their consumers, they might squeeze their suppliers too. Unlike the Liberals and Nationals, for whom a voluntary code was good enough – for Labor, only a mandatory code will do, a mandatory code with multimillion dollar penalties that will see farmers, like families, get a fair deal.
We’ve also got the ACCC, the competition watchdog, doing a deep dive into supermarket competition, looking at how they can get a better deal for consumers. And alongside that, we’ve seen the ACCC launch action against Coles and Woolworths this week for what they claim is misleading claims of specials by the big supermarket chains. These claims will be tested in court, but if they’re proven, then the supermarkets deserve every penalty that’s thrown at them.
Alongside this, the government’s doing a power of work on the competition front. We’ve seen market concentration and markups rising under the Liberals, and we want to make sure the Australian economy is more productive and more dynamic. And so that’s why we’ve got the Competition Taskforce spearheading work, including the biggest shake—up of mergers in 50 years, work on reforming non‑compete clauses which can reduce wages and business formation. And the work we’re doing with states and territories to revitalise National Competition Policy.
Competition policy is good for consumers, good for workers and good for innovation. It’s at the heart of a productive and egalitarian society, and that’s why the competition agenda is front and centre in Labor’s economic focus and that’s why this week we’re turning the competition agenda to look particularly at what we can do to ensure that our supermarkets are as competitive as they can be.
Very happy to take questions, and I know your main focus today is on this CHOICE report. So, looking forward to answer answering as many questions you’ve got on that.
JOURNALIST:
Would you have hoped that the prices would have dropped more in the second report compared to the first one a couple of months ago?
LEIGH:
I was pleased to see that Coles basket is down. That does suggest that competition is working and also suggest that there’s a value to split basket shopping. Increasingly, when we talk to people in the market, they speak about consumers doing part of their shop at one store, part of their shop at another. Some of the work we’re doing with states and territories around planning and zoning will help ensure that supermarkets face that direct price competition. All of that is good for consumers, but it’s also good for the people who don’t shop around because it puts competitive pressure on the supermarkets to offer the best deal.
JOURNALIST:
The Woolworths basket went up though.
LEIGH:
We’re certainly going to see ups and downs there. We want to see Australian shoppers getting the very best deal and we encourage people if they’re not getting the best deal at one supermarket, walk down the road to a supermarket who’s prices are better.
JOURNALIST:
The Woolworth’s basket that has gone up, is that something that would be sort of prosecuted under the mandatory code?
LEIGH:
The mandatory code looks at the relationship with suppliers, so this is about farmers getting a fair deal. It puts in place a dispute resolution mechanism, an ability to lodge anonymous complaints with the ACCC, special arrangements for fresh produce suppliers who can be over a barrel in their price negotiations with suppliers. So, all of that work going on in the supplier side, making sure farmers are getting a better deal while at the very same time on the consumer side, we’ve got the ACCC work, and the CHOICE reports we’re announcing today.
JOURNALIST:
Can I ask you about negative gearing briefly? In 2017, I want to put this quote here. You wrote in an opinion piece ‘the capital gains tax and negative gearing are inefficient combining to drive down the home ownership rate and also inequitable.’ Is that still your view?
LEIGH:
We’ve got a housing policy. Negative gearing and capital gains tax changes aren’t part of that. We’ve been very clear that our housing agenda will increase supply. And right now, we’ve got parts of that agenda being blocked in the Senate by a coalition of the Liberals and the Greens. Including the Greens who went to the last election promising a shared equity scheme and are now voting against our shared equity scheme in the Senate.
They need to get out of the way and allow Labor’s ambitious housing agenda to proceed. We’ve already done a lot under Julie Collins and now Clare O’Neil. The social housing accelerator, the Housing Australia Future Fund. We’re committed to a target with the states and territories to build 1.2 million homes over the next 5 years. That’s our housing agenda, that’s what we’re committed to.
JOURNALIST:
Just on your view though, you said it’s ‘inequitable and inefficient’. Is that still your view?
LEIGH:
What we’ve got now is a housing agenda that is before the parliament. And if the Liberals and the Greens allow us to put through those housing reforms, that will be good for Australian home buyers, it will be good for those who are struggling to get into the market. Already we’re providing support to renters, the back‑to‑back increases in Commonwealth Rent Assistance, which have helped put downward pressure on inflation. We have a housing agenda; we’ve been very clear about that and we’re working to prosecute that agenda.
JOURNALIST:
Could negative gearing be made more equitable or more efficient?
LEIGH:
I appreciate your tenacity on this, but I’ve been very clear we have a housing agenda. It is a good and ambitious housing agenda. It would benefit from its implementation in full, which requires the Liberals and the Greens to stop blocking and let Labor start building.
JOURNALIST:
Just on the grocery code, David Littleproud said a couple of days ago the maximum penalty you can impose is $187,000. Do you know where we may have gotten that figure from?
LEIGH:
When it comes to these issues, David Littleproud is all hat and no cattle. He was part of a government that for 9 years, decided that a voluntary code of conduct was good enough. But they didn’t just set it up as a voluntary code of conduct. Let’s be clear. They reviewed it and they decided it needed to stay a voluntary, toothless code of conduct. Labor is now legislating that code, where the maximum penalties going into the multimillion dollars, going up to up to $10 million. So, where David Littleproud makes his mistakes, you’ll have to ask him and let him figure that out for himself. What Labor is doing is getting on with the job of supporting farmers in a way David Littleproud and the Nationals in government never did.
JOURNALIST:
On the ACCC court case, does that in your view give support to the ACTU and their claims that price gouging been driving up inflation?
LEIGH:
I think gives credence to what Labor did when we first came to office, which was increased the penalties for anti‑competitive conduct. One of the first bills we passed through the parliament in 2022 was to raise those penalties so the maximum penalty in dollar terms went up from $10 million to $50 million. And as the share of turnover, and up from 10 per cent of turnover to 30 per cent of turnover. Both higher penalties apply for the latter period of the alleged infringement by Coles and Woolworths. So stronger penalties make a strong difference in terms of deterring bad behaviour. That’s been Labor’s focus, on our ambitious competition agenda, focused on productivity on what’s good for consumers and workers, and working across a range of fronts with the experts to deliver for Australians.
JOURNALIST:
(Inaudible)
LEIGH:
What we’re seeing with the inflation is a range of different pressures here, largely the supply chain issues which, as the Reserve Bank governor has said, are being worked through. We’ve seen inflation coming down now to about half of where it was when we took office. The figure out yesterday on monthly inflation puts inflation at its lowest level in 3 years. And backed by that, are the measures that Labor is putting in place. Inflation would be higher today if it wasn’t for the energy bill relief, for the childcare work, for the housing assistance that Labor is providing. We are doing our part on getting inflation down. The competition work is a key part of that and that’s working alongside what the Reserve Bank’s doing. They’ve acknowledged how those 2 agendas work together. Surplus budgets from the government and the work that the Reserve Bank does for interest rates.
JOURNALIST:
Minister, half a dozen of your Labor colleagues have said they’re open to a discussion on negative gearing. Would you be willing to hear those concerns, have a discussion, or are you completely satisfied with the settings as they?
LEIGH:
I talk to my colleagues all the time, particularly about policy. I’m a bit of a policy nerd, and my Labor colleagues – and frankly everyone else in Canberra – knows how keen I am to talk about the work that we need to do in housing. But when it comes to tax reform, our main focus is on the multinational tax changes we’ve made. We have been the most ambitious government in Australian history when it comes to multinational tax reform. We’ve done a lot on the multinational tax loophole closing and transparency work. That’s our focus when it comes to tax reform.
JOURNALIST:
On groceries, does the price discrepancy, or lack thereof, between Coles and Woolworths, what does that say to you?
LEIGH:
Well, it’s a matter for the Coles and Woolworths to speak to consumers about their prices. What we need to do as a government is to get that information into the hands of consumers, those who are insiders may well know exactly what’s going on. But for outsiders, they benefit when the government funds these shadow shopper exercises, telling people where the cheapest basket of groceries can be found.
JOURNALIST:
Last time around, the very, very slight price difference was a matter of sense last time was labelled as collusion. Do you think that’s fair?
LEIGH:
It’s up to those supermarkets to explain their prices. It’s not up to me to sit there justifying how they price their baskets, but my role as the Assistant Minister for Competition is to get those settings right, so that in this market and in many others, we’re seeing more dynamism, more competition, greater number of startups. When I first got the portfolio of competition for my party, someone said to me, here’s an exercise for you: how many industries can you name in Australia that are not dominated by a couple of big firms? It ends up being a fairly short conversation. This isn’t just a story about supermarkets, it’s about the whole Australian economy where we’re trying to get more dynamism, more competition right across the economy.
JOURNALIST:
You mentioned before that one of the focuses with closing loopholes for multinational tax corporations. I do want to go back to negative gearing. In 2016 you said that Labor’s then policy was about closing a loophole on negative gearing. Are there loopholes around negative gearing that need to be closed?
LEIGH:
Well, the policies we took to 2016 and 2019 election are no secret. Neither is it the secret today that we are pursuing enthusiastically a massive housing agenda. 1.2 million homes over the next 5 years is an ambitious target, we’re working with states and territories in order to put that into place. We want to work with the minor parties in the Senate, it is pretty extraordinary that for all their talk about affordable housing that the Greens are out there right now, opposing a shared equity scheme that would help more young Australians into homes.
One final comment on inflation. I found it remarkable this morning to see Angus Taylor in the media arguing that Australia should follow the example of the UK and New Zealand in dealing with inflation. He would know exactly what that means. The UK and New Zealand have been in recession. Their approach to dealing with inflation involved driving their economies into recession. So what Angus Taylor is effectively telling Australians, is that his strategy for dealing with inflation is to throw the economy into recession. It demonstrates once more that Angus Taylor is as hapless and reckless as anyone who has ever held the job of Shadow Treasurer in Australia.
Thanks very much.