LEON DELANEY:
The Australian Competition and Consumer Commission’s Supermarket Inquiry public hearings have begun today. Joining me now, Assistant Minister for Competition, Charities, Treasury and Employment, not to mention our local member here in the seat of Fenner, Dr Andrew Leigh. Good afternoon.
ANDREW LEIGH:
Good afternoon, Leon. Great to be with you.
DELANEY:
Now, this inquiry has been much anticipated. The public hearings are underway from today. What will the hearings be told?
LEIGH:
Well, we’re hearing about Labor’s measures to get a fair go for farmers and families. We’re putting in place a mandatory Food and Grocery Code of Conduct, fighting against shrinkflation and providing Australians more information about where to get the best deal. Some of the information that’s been coming up in the inquiry today from organisations like CHOICE and the Indigenous Consumer Assistance Network is pointing to the decline in trust in the major supermarkets, big differences in pricing from city areas to remote areas, and challenges of unit pricing and shrinkflation.
DELANEY:
There have been a couple of things here. First of all, there’s the consumer experience, where many shoppers get the impression, they’ve been taken for a ride in terms of price gouging. But at the other end of the spectrum, you’ve also told me in the past that the inquiry will be looking at the way the big supermarkets treat suppliers, including farmers. How difficult has it been for Australia’s farmers?
LEIGH:
It’s been pretty tough. I mean, particularly for those fresh produce suppliers. Imagine you’re a berry producer, Leon, you’ve got a load of berries, you’re ready to take it off to one of the major supermarkets and suddenly they say, well, it’s not up to our quality standards. You don’t have any right to appeal or to object. All that happens is you’ve got to dump the berries. And so, with only a couple of buyers, that really puts many farmers over a barrel. That’s why we’re strengthening the Food and Grocery Code and particularly putting in provisions for some of those fresh produce suppliers.
DELANEY:
It’s been reported that the supermarkets also squeeze the producers on price. They might accept the produce, but they say, no, no, we will only pay you this much for it. There’s a clear power imbalance there, isn’t there?
LEIGH:
Spot on. That’s what economists call monopsony power, which is the evil twin to monopoly power. It’s when a big company not only squeezes its consumers but squeezes its suppliers too. And so, we’re tackling both of those, making sure we get a fairer deal for families and a fairer deal for farmers. And those additional resources we’re giving the competition watchdog will allow it to have anonymous complaints from farmers, which will be better than farmers going through the existing voluntary code where they’re too scared of reprisals to make complaints.
DELANEY:
Now, how long will this series of public hearings continue?
LEIGH:
They’re running until the 22nd of November. So, today and tomorrow, we’ve got consumer advocacy groups. Then Aldi, Metcash, Woolworths and Coles will successively appear in front of the inquiry. It’s a big and serious inquiry. The competition watchdog brought down its interim report in August. It’s due to bring down its final report by the end of February. We’ve got a great competition regulator and they’re taking action here in a very public way, and so everyone can see the issues.
DELANEY:
Are suggestions that the government should legislate to create some sort of divestiture power, are those suggestions still worth considering or not?
LEIGH:
Well, no major competition review has argued for them. The Hilmer Review, Harper Review, Dawson Review, Emerson Review, none of them recommended for it. The National Farmers Federation and the ACTU haven’t pushed for it. We don’t see it as being the key answer, and when you look around the world, Leon, you don’t see countries breaking up their supermarkets. So, what we’re focused on is strengthening the unit pricing code, the mandatory Food and Grocery Code, more information for consumers, making sure the competition watchdog knows about every single supermarket merger under a better merger regime.
DELANEY:
The argument I’ve heard, though, is that you wouldn’t necessarily need to use divestiture powers. Just the fact that they exist in the first place might act as a serious deterrent. Is that not worth considering?
LEIGH:
I don’t see much evidence of that when I look around the world. An unused deterrent doesn’t seem to have an impact. Countries with divestiture powers don’t seem to see those systemic benefits that people have talked about. Instead, we’re going where the experts have suggested. You ask the head of the competition authority what she says needs to be focused on. She says the number one competition priority is getting our merger laws through the Parliament. So, that’s where our attention is focused right now.
DELANEY:
Also today, your colleague Stephen Jones is introducing the legislation for the Scam Prevention Framework. What will that require of businesses and social media platforms?
LEIGH:
Yeah, so Stephen’s already introduced to the Parliament the Scams Bill. Really important to have that one‑stop shop for people who were the victims of scams. We know that scams are costing huge amounts to Australians. Scam losses went up before we came into office. They have not increased in 2023 as they had under the previous government, in fact, they’ve gone down a little. But we do understand the importance of ensuring that the responsibility falls on the right people. Often can be a combination of social media platforms where people first hear about the scam, and then the bank through which they transfer the money. So, a Scams Prevention Framework needs to appropriately apportion liability between parties who haven’t met their obligation.
DELANEY:
And speaking of social media, the Prime Minister has also announced today that the government will seek to impose a ban on children under 16 from accessing social media platforms. Is such a ban really practical? Is it really possible, feasible to enforce such a thing?
LEIGH:
Yes, it is. And I know this will be welcomed by many Canberra families who are tearing their hair out and dealing with social media and its pernicious impacts, whether that’s in the body image of young girls, whether it’s on the mental wellbeing of young people, whether it’s on violence in our schools. We know that social media is doing harm to young people. We’re calling time on it. This isn’t the only solution, but it will make a difference. It requires national leadership. So, at the National Cabinet meeting tomorrow, the Prime Minister’s going to seek endorsement from first ministers to set 16 as the minimum age for social media.
DELANEY:
Some experts have suggested this is not the solution and in fact, it would be far better to teach, engage with young people from an early age how to manage and how to deal with social media. What’s wrong with that approach?
LEIGH:
Well, with tobacco and alcohol, we also have education programs, but we have age limits because we understand that those age limits help to restrict the harm that they do. Social media is no different. We’ve seen a significant decline in the mental wellbeing of young Australians since smartphones and social media emerged in that period, 2007 to 2010. And there’s a lot of robust evidence around suggesting that that is a causal effect. Whether it’s the randomised trials, whether it’s the effect of Facebook rolling out across US universities with the mental health drops that that caused, or whether it’s the fact that the mental wellbeing of girls has dropped more, and we know girls are heavier users of social media. All of that points towards a causal impact of social media on the adverse mental health outcomes of our young people.
DELANEY:
Finally, I have to ask you, how do you feel about the result of the United States presidential election?
LEIGH:
Well, the Americans will make their decisions. So obviously, we’re in a world in which more will be changing than would have been the case if the same party had stayed in the White House. But the relationship with the United States has survived wars, lasted for decades. It will endure through this presidency as it has past presidencies. We’re looking forward to strengthening those engagements with the incoming administration.
DELANEY:
Yeah, but how’s that going to work when we’ve got a Prime Minister who has in the past admitted that he’s been scared? Well, he’s had the excrement scared out of him by Donald Trump, to paraphrase the actual quote. And also we have an ambassador to the United States, who has also been, shall we say, fairly frank in some of his past comments.
LEIGH:
I don’t think any of their comments would be any stronger than those of the incoming vice president with regard to the incoming president. So, you know, people make comments, but our main focus is going to be on working with that incoming administration in the interest of all Australians. Australia benefits from an open trading order. We benefit from engagement in the international community. We’ll continue to pursue those values as we look to engage with a new administration in America.
DELANEY:
Andrew, thanks very much for your time today.
LEIGH:
Real pleasure, Leon, thank you. Thank you.