TOM CONNELL:
Joining me live, Assistant Minister for Competition, Charities and Treasury, Andrew Leigh. Thank you for your time.
ANDREW LEIGH:
Pleasure, Tom.
CONNELL:
Interesting this government‑funded report, to sort of not compare the pair, but compare the 4 of them. I found out you like to, you shop around, you go to multiple supermarkets. So, were you not surprised by any of these results?
LEIGH:
Well, I was surprised by the quantum of the difference. Aldi comes out well ahead of Coles and Woolworths, and we’ve also seen that the basket with specials now favours Coles, whereas in the first report it favoured Woolworths. This provides 2 benefits, Tom. One is that Australians get a sense as to where they get the best deal, so we’re saving shoppers money. The other is that it puts competitive pressure on the supermarkets.
CONNELL:
Is it a fair comparison? Aldi has less, does it not, Australian made products? They tend to be a bit more expensive. And we also heard not so long ago, government sort of saying, you know, support Australian made. Is it a like‑for‑like in that sense?
LEIGH:
Well, Tom, CHOICE doesn’t release the particular products that they focus on because they don’t want supermarkets to game the system. I’d back them in doing these kind of shadow shopper exercises. They’ve got decades of experience in doing it. They’re a well reputed consumer organisation, which is why we chose to fund them to do this.
CONNELL:
But wouldn’t it be good as well for them to also reveal the Australian made products? This is something we’re told we should care about. If Aldi has much less in terms of Australian made, that should be factored in, shouldn’t it? That’s not quite like for like if that’s the case.
LEIGH:
I don’t know if that’s the case. You’d need to ask CHOICE on the methodology.
CONNELL:
You could say ‘CHOICE next time, could you let us know the Australian made content’?
LEIGH:
I’d certainly welcome others diving into this space. Our focus really has been on cost of living here, Tom. We want to make sure that Australians are getting the best deal at the supermarket and also that the supermarkets are giving farmers a fair deal. That’s why this week we released the draft of the mandatory Food and Grocery Code of Conduct.
CONNELL:
All right, well, there you go. There’s my suggestion. Maybe I’ll tell CHOICE that that’s what I’d be interested in.
LEIGH:
I’m sure they’d welcome it.
CONNELL:
Inflation, the trimmed mean is coming down, but that too was affected by these energy rebates, which, you know, it’s not a real reduction in prices, it’s a temporary one. Does that show that the fight against inflation isn’t going as well as these figures we saw yesterday suggest?
LEIGH:
Tom, we’ve got the lowest inflation in 3 years according to the monthly number. That’s very encouraging. And indeed, the inflation rate is lower thanks to Labor’s measures, thanks to what we’re doing with the increases in the Commonwealth Rent Assistance, with our childcare reforms, with the energy bill rebates, all of those putting downward pressure, pressure on inflation. We’ve got a little way to go before we get back into the target band with the quarterly figure. But having the monthly figure back inside that 2 to 3 per cent target band is encouraging. And Labor’s approach is to try and get back there without smashing the economy. I heard Angus Taylor out this morning saying we should follow the lead of Britain and New Zealand, both economies that have gone into recession over recent months. It’s shocking that the Shadow Treasurer’s approach to tackling inflation would be to throw the economy into recession.
CONNELL:
So, on the energy side of things, though, if there were no rebates, energy prices have gone up otherwise under Labor, haven’t they? That’s the reality there because that’s the longer term figure that matters. They have gone up without the rebates.
LEIGH:
Well, what the ABS figures very clearly show is that energy price increases have been lower as a result of our energy bill rebates. Energy bill rebates that weren’t supported by the Liberals. That $300 energy bill relief flowing to every house household is absolutely critical, following on the payments that were enacted at the end of last year.
CONNELL:
But that longer term inflation story, what also matters. What matters is what the real price is without rebates, doesn’t it? I mean, you know this stuff better than I do. The prices without the rebates have gone up.
LEIGH:
Well, the CPI itself also feeds into other measures and so a lower measured CPI has a positive effect. We are making a difference to inflation. We’re getting it down sustainably and we’re aiming to do it, unlike the way the Liberals would, without smashing the economy. We’re still at full employment. Those tax cuts for all Australian taxpayers are also an important part of our cost‑of‑living relief.
CONNELL:
There has been discussion on taxes on investment properties. Is that a discussion – good time to have it right now?
LEIGH:
We’ve got a big and ambitious housing policy, Tom, as you well know. A target to build 1.2 million homes over the course of 5 years. Working with states and territories. We’ve got more social housing investment than the Liberals did in their 9 years in office. We’ve got measures which are already taking effect, such as the Housing Australia Future Fund, where we’ve announced 14,000 of the homes and the measures that have been announced but are being blocked in the Senate by the Liberals and Greens.
CONNELL:
Well, the Greens might play ball, capital gains tax and negative gearing, that seems to be the discussion now. Are you glad that numbers are being crunched by Treasury and maybe this has been considered higher up?
LEIGH:
I’d be glad if the Greens voted for a policy they took to the last election.
CONNELL:
Question, though. Are you glad that this is now seemingly on the table to some degree by Labor, by the government?
LEIGH:
What’s on the table from Labor is our big and ambitious housing agenda. Australia has fewer homes per person than the OECD average. We need to build more. And the investment in skills we’re seeing, the fee‑free TAFE places, tens of thousands there. That ensures we’ve got the skills pipeline to build the houses.
CONNELL:
So, this is the thing. Despite that, when we look at the building sector, productivity plummeted in the past decade, it’s down 18.1 per cent. Is this the underspoken about issue with the cost of our houses? That’s a staggering figure, isn’t it?
LEIGH:
Well, it does suggest that all the talk from the Liberals and Nationals about the Australian Building and Construction Commission, it wasn’t focused on building sector productivity. Yes, we need to do more. And one of the things that Ed Husic has been leading is the work on modular construction, getting more efficient housing out there, ensuring that we’ve got the very best of the approaches.
CONNELL:
But that wouldn’t be bring down the cost of traditional construction, if that’s the alternative. I’m not sure if that’s the term, but doesn’t that need to be looked at? Why is productivity plummeted? Is it EBA? Is the sector sort of being able to just become less efficient? Do they walk off site when there’s a tiny bit of drizzle? What’s going on here?
LEIGH:
Well, what we need to do is to boost productivity right across the economy. Getting more competition into the market is important. That’s as true in the housing sector as it is anywhere else. Australia has too many industries dominated by too few firms. So, our competition agenda is about creating more competition, including in construction.
CONNELL:
This is, when you say it, like anywhere else, this productivity is worse than any other sector I can see. Does it need a specific look at in terms of what’s going on for things to be so dire?
LEIGH:
Well, I’ve talked to you about some of the measures we’re focusing on there, Tom. We’re getting the skills pipeline right. Through the increased numbers of apprenticeships, we’re focusing on the capital side and improving technology and modular construction.
CONNELL:
So, that’ll make a difference in future years. You’re confident?
LEIGH:
Absolutely. And, of course, what we’re aiming to do through Build to Rent, is to allow an innovative housing model to come onto market. Again, a sensible measure being blocked by the no‑alition of the Libs and Greens.
CONNELL:
Andrew Leigh. Thank you.
LEIGH:
Thanks, Tom.