Andrew Leigh:
Good morning, my name is Andrew Leigh – the Assistant Minister for Productivity, Competition, Charities and Treasury.
The Albanese government wants Australians to get a fair go at the checkout, and our big supermarket duopoly has significant market power. Coles and Woolworths between them control about two‑thirds of our supermarket market in Australia. The Australian Government wants to ensure fairness from paddock to pantry. Last year, we put in place a mandatory Food and Grocery Code of Conduct to ensure the big supermarkets do the right things when they’re dealing with suppliers. Over the objections of the Coalition, we put in place a system which has multi‑million‑dollar penalties for those who don’t do the right thing by suppliers.
And now we’re using that same instrument – the Food and Grocery code – to crack down on price gouging at the checkout. Australians don’t want to be paying too much for their groceries and the Albanese government has their back. Excessive pricing rules exist in other jurisdictions, including the United Kingdom and the European Union. Our approach will draw on what has been done in other countries, and we will put in place a backstop of fairness. These new rules will apply to supermarkets with more than $30 billion of turnover, which currently means it’ll capture Coles and Woolworths. This duopoly has significant market share, and it’s important to ensure that they are doing the right thing by Australians.
If the supermarket duopoly do the right thing, they have nothing to fear from transparency and enforcement. Excessive pricing rules will be judged by courts using information such as the cost of supply plus what is a reasonable mark up, or comparisons with prices in competitive markets. This will ensure Australians get a fair deal. That the system is fairer for farmers and fairer for families.
We know many Australians are feeling under pressure from the cost of the weekly shop, and our price gouging laws which are out for consultation today will ensure that we look after consumers. We’re looking to hear from people, whether that’s shoppers, supermarkets or suppliers. The consultation period will close on November 3, with the aim of having these rules in place by the end of the year and ensuring that Australians get a better deal at the checkout. Happy to take your questions.
Journalist:
Sussan Ley is about to give a speech on her plans for tax cuts. What have you seen? What do you think? And is it enough to sort of detract from the distraction that is Barnaby Joyce?
Leigh:
Well, the Coalition at the last election went to the Australian people promising to raise their taxes. So, the first thing Sussan Ley could say would be that they got it wrong when they went to the Australian people as the party of higher taxes. But if all you’re going to do is simply say you’re in favour of lower taxes as a principle – well, that’s a thought bubble, not a plan. Australians want to know what the Coalition would actually do, so unless Sussan Ley’s proposal comes with specific tax cut proposals, unless it’s actually properly costed, then all it is just another broad statement of intent.
We need an apology from the Coalition for what they did and a precise plan as to what they would do if they came back to office. Right now, we’ve got a Coalition that is looking more like a bad soap opera than a good Opposition that the country needs.
Journalist:
What’s on the line for the Prime Minister tomorrow in Washington, and what is the government hoping to get out of the meeting?
Leigh:
Well, it’s an important meeting following on from a whole series of telephone calls and the brief face‑to‑face meeting the Prime Minister had with the US President in New York, It’s a good opportunity to continue one of our strongest relationships with an important trading partner and national security partner.
The Prime Minister will be in the Oval Office making the case of Australian interest as he always does, with respectful engagement as other Ministers have been doing in Washington, D.C. over the course of the past week and months. This is an ongoing conversation with an important security ally and trading partner, and I expect the meeting will go warmly. It will be an important meeting as part of an ongoing engagement with the US.
Journalist:
Do we expect to deal on critical minerals?
Andrrew Leigh:
I don’t want to pre‑empt anything that will be discussed. But obviously, critical minerals are an important part of a strong relationship between Australia and the United States.
Journalist:
Assistant Minister Leigh, what doyou think about Barnaby Joyce potentially looking at leaving the Coalition?
Leigh:
Well as I said before, the Coalition isn’t the good Opposition the country needs, it’s a bad soap opera. Barnaby Joyce now looks at the compass and decides the way the Coalition has been pointing is towards One Nation, so he’s going to head off there. Well, that says an awful lot about where the Coalition is right now. Let’s be clear, their fight is over net zero – a policy put in place by Scott Morrison with the support of every major business group and every state and territory.
It’s a marker of how extreme the Coalition has become, that they are debating whether to get rid of a Scott Morrison climate policy of net zero by 2050. Where Barnaby goes is going to be Barnaby’s choice, but ultimately it says a lot about the dysfunction and about the increasing rightward tilt the Coalition that has come badly out of touch with Australians, as depicted by the fact that they barely hold many seats in urban Australia any longer.
Journalist:
Do you think that this is a bit of an alarming prospect? Obviously, we haven’t seen where this whole Barnaby Joyce thing goes, but people are talking about potentially some kind of fracturing of the Coalition and maybe a new right‑wing party emerging – is that an alarming prospect?
Leigh:
The Australian people simply want a strong opposition to hold our great government to account. That’s all that people are asking of the Opposition, but they don’t seem to be able to deliver that. Everything is about them; their positions, their roles, their infighting. None of it is about the Australian people, what the Australian people want and how the Coalition would meet their hopes and dreams.
If the Coalition really wanted to be considered seriously as a government, they would be appealing to middle Australia, rather than debating how extreme they can be and how they can outdo one another in their inflammatory rhetoric. Australians want an Opposition that will bring the country together, not look to try and inflame tensions and tear it apart.
Journalist:
A question on Healthscope. Is it right for a for‑profit health network to turn itself into a charity so it can get tax advantages, including farming salary packaging benefits for nearly 20,000 staff?
Leigh:
Yeah, look I read your colleague Dan Ziffer’s piece this morning. It’s certainly concerning allegations that are being made around Healthscope. What I would say is that charitable status is there for the benefit of the public, and if it’s to be used for private or commercial gain then entities stand to lose not only the trust of the public, but also their charitable status.
We have a strong regulator in the form of the Australian Charities and Not‑for‑profits Commission that works alongside the Australian Tax Office. They will look into any allegations of this nature. We’ve got legislation in parliament which also allows them to speak more openly about investigations they’re conducting. At the moment, the rules are quite restrictive about the charities commission’s ability to speak out about its investigations, but they are the regulators in place and they will look into allegations such as these.
Journalist:
Regarding the supermarkets, the Prime Minister invited a United Arab Emirates supermarket chain to Australia. Do you have any updates on this deal and what effect this could have on the market?
Leigh:
Yeah, one of the things we’ve done through National Competition Policy is to set up a $900 million productivity fund, working with states and territories. And one of the issues there is ensuring planning and zoning rules are welcoming any potential new entrant.
We had Aldi coming into the market, which has been a dose of competition. But we also had Kaufland put its toe in the water and then decide that it wasn’t able to get the sites. We don’t want to see that happen again, so we need the planning and zoning rules to be right for new entrants as well as entreaties such as those the Prime Minister made in the UAE. We’re doing a lot on the competition front and a lot on the supermarkets front. We’ve got the Unit Pricing Code review to crack down on shrinkflation, we’ve given extra $30 million to the competition watchdog for enforcement of supermarkets.
Every supermarket merger has to be notified to the Treasurer under the big merger shake up that we put in place last year, and we’ve got CHOICE to do grocery price monitoring to ensure Australians get a fair deal at the checkout. Our crackdown on price gouging is just the latest step of many important measures we’ve made to hold the supermarkets to account and ensure Australians get a fair deal at the checkout.
Journalist:
Under the excessive pricing laws, what is the biggest fine the supermarkets could face?
Leigh:
The fines are $10 million dollars; 3 times the ill‑gotten gains, or up to 10 per cent of turnover. So, for multi‑billion‑dollar companies, these are significant fines. Of course, the penalty for price gouging right now is zero. We’re putting in place a system which will punish supermarkets who do the wrong thing with multi‑million‑dollar fines. But let’s be clear, we don’t want to see supermarkets get punished, we want to see Australians get a fair deal at the checkout. And I’m hopeful the supermarket duopoly will do the right thing by shoppers.