Hamish Macdonald:
A question for you. Do you shop around for your groceries to get the best price? Or like me, are you just a bit of a creature of habit, going to the same shop every week, buying the same things because it’s a bit more convenient and you don’t have to think too much about it? This morning, the consumer advocacy group CHOICE has published their latest supermarket report comparing the price of an average basket of goods across a variety of stores. Andrew Leigh is the federal Assistant Minister for Productivity, Competition, Charities and Treasury. Andrew Leigh is here. A very good morning to you.
Andrew Leigh:
Good morning Hamish, great to be with you.
Macdonald:
So, the CHOICE survey cites 86 per cent of respondents are concerned about the rising cost of food and groceries. That tells you something, doesn’t it?
Andrew Leigh:
It sure does. Australia has got one of the most concentrated supermarket sectors in the world, and we have been putting the spotlight on the big supermarkets, giving more resources to the competition watchdog and funding quarterly grocery price monitoring from CHOICE. That’s about putting power in the hands of consumers to shop around by giving them accurate, up‑to‑date information on the cost of a representative basket of groceries.
Macdonald:
But that’s where I think this story gets really interesting, because Coles and Woolies remain so close on price. The price of a basket of goods varies between just 20 and 40 cents. Doesn’t that also tell us that maybe some of these concerns we have about competition are well‑founded?
Leigh:
Absolutely. And one of the things that the ACCC’s supermarket inquiry found earlier this year was a cycle of discounting on certain products between the 2 majors, in which certain products would be on special at Coles one week, then Woolies the next week. Then Coles one week, then Woolies the next week. And that looked pretty suspicious to many industry observers. The ACCC is going after the majors on dodgy discounts – discounts that weren’t. And also, we’re looking into the Unit Pricing Code as to whether we need to do better to tackle shrinkflation.
Macdonald:
Can you explain what those sale price patterns mean, like what are they doing? It sounds like it’s sort of gamified almost?
Leigh:
Yeah, it certainly looks that way. I don’t have any more information than what was in the ACCC report. They analysed around a billion prices and were able to do some kind of deep data analysis that just hasn’t been possible beforehand. So full credit to the competition watchdog for that report. We need to make sure our big supermarkets are held to account. Their market share is very high despite the entry of Aldi. The market share of the 2 majors hasn’t dropped, because while Aldi has grown, IGA and other smaller chains have shrunk so the majors have kept their market share. But this report…
Macdonald:
Does this report actually show that there are cheaper options, like if you are going to Aldi or the others, like can you do it cheaper?
Leigh:
Yeah, it sure does. So in New South Wales, Aldi prices are the cheapest of any Aldi chain across Australia. And so the cheapest basket of groceries across all states and territories and across all the supermarket chains is Aldi in New South Wales. And that is a basket of groceries, it’s about 5 per cent cheaper than Coles which comes in next. So, I think that’s going to be useful information for Sydney shoppers as they look to get the best deal at the checkout and just work out how much do you save by going to Aldi. Because often it takes you a little bit longer because you can’t get the full basket of goods so you’ve got to do what the boffins call ‘split basket shopping’ – get some of the essentials at Aldi and then go and get others at Coles and Woolies.
Macdonald:
Who has got the time for that Assistant Minister?
Leigh:
Many people do. Split‑basket shopping is on the rise.
Macdonald:
Is it?
Leigh:
Yeah. One of the interesting things that came out of the supermarket report Hamish, was the finding that almost all the Aldi stores are set up within 500 metres of a Coles or Woolies. So, it’s actually in their business model, encouraging people to do the bulk of the shopping there, but then top up with other items in the bigger grocery stores. And doing that puts competitive pressures on the majors, so when you shop around, you encourage the majors to produce the best deal for consumers.
Macdonald:
1300 222 702 is the number. Do you do this ‘split basket shopping’? I’d love to hear from you if you do. How creative do you get? Have you figured out what to get from the different supermarket offerings? I’m interested in the freshness part of this report Assistant Minister. I like a strawberry. But what I’ve learned is that the big supermarkets; Woolies and Coles have fresher fruit than the IGAs, for example. How does that happen?
Leigh:
Well, I guess it’s all about their supply chains and certainly in the case of strawberries, which is just one of the many fruits that you can do the freshness test on, Coles then turn out to be the winner. Day one, no punnets had signs of decay; day 5, about two‑thirds had no signs of decay. So that’s encouraging for people who like their fresh fruit and veggies, and it’s a big focus for many shoppers as people are looking to eat healthy and save money at the same time.
Macdonald:
Andrew Leigh is here, the federal Assistant Minister for Productivity, Competition, Charities and Treasury. Do you have a shorter way of saying what your job is Assistant Minister?
Leigh:
Assistant Minister for Treasury is basically what I go with. I put different titles and just sort of cycle them around Hamish!
Macdonald:
It’s a real mouthful.
Leigh:
Bit of a mix in that. You can do your Split‑basket shopping with my title if you like.
Macdonald:
I want to talk to you about the Productivity Commission because they’ve announced a review into the GST deal that WA receives. Independent economist and mornings regular here, Saul Eslake, talks about it a lot. He’s got a very strong set of opinions about the way the GST lands for Western Australia.
[Excerpt]
Saul Eslake:
These changes are now estimated to cost the federal budget almost $60 billion over 11 years, compared with the original estimate that it would cost $9 billion over 8 years.
[End of excerpt]
Macdonald:
So, given that the Productivity Commission is going to review this, does that then mean that the federal government is open to the notion that maybe WA got too much of a slice of the pie?
Leigh:
Well, we’re not contemplating any changes to the current arrangements Hamish. This is a review that was legislated in 2018 when the goods and services tax distribution system was changed. That said the operation of the changes had to be reviewed by the Productivity Commission by the end of 2026, and that’s what’s happening here. So, it’s about making sure that the arrangements are delivering the best value for states and territories.
Macdonald:
But is it fair? I guess that’s what I think we in New South Wales want to know, is it being divvied up fairly?
Leigh:
Well, the purpose of doing a review is not to pre‑empt it. We’ll see what they come back with, and those decisions are taken at arms‑length from the government under the Commonwealth Grants process and under the legislation that was passed in 2018. I’ve got a lot of respect for Saul Eslake. He makes his arguments cogently, but this is an arms‑length review being done by the Productivity Commission and the government’s minded to let the Productivity Commission do its work.
Macdonald:
I want to ask you about one of your opponents. The Shadow Home Affairs Minister, Andrew Hastie has been making a lot of headlines. Former Sydney boy ended up in Western Australia, touted as a future Liberal leader. He has been vocal in the past week, talking about migration, talking about manufacturing. He wants to revive domestic car industry it would seem. But he also says Australians feel like – and this is a quote – ‘Strangers in our own home’. Do you think he’s tapping into something, an undercurrent of resentment perhaps in the community?
Leigh:
Nine out of 10 Australians believe that multiculturalism is a good thing Hamish, and apart from Indigenous Australians, all of us were either born overseas or are the descendants of migrants. So I think Andrew Hastie is badly out of step with Australian public opinion, and he’s missing the fact that in the case of housing, for example – a quarter of construction workers are migrants. Migrants aren’t just mouths to feed, they’re muscles to build and minds to inspire. One of our most recent Nobel laureates, Brian Schmidt, was born overseas, and so with migration, we bring in talent and diversity. Obviously, we need to get that mix right, and that’s why we brought down migration from its peak numbers under the former Coalition government to a more manageable level.
Macdonald:
I suppose what we hear though, from Sydney listeners day in day out when we discuss these issues is that even if someone might accept all of the things you said about the positives of migration, they can see, maybe feel in their local communities, some of the pressures that come when governments don’t get the numbers right. When they don’t plan for the numbers that arrive, and obviously Sydney bears much of the burden of this, particularly Western Sydney, because the planning et cetera, doesn’t necessarily keep up with the migration intake?
Andrew Leigh:
Yeah, we’ve certainly got to be doing a better job as a nation on housing. That’s one of the reasons we set the 1.2 million home target with the states and territories and why Clare O’Neil is working so assiduously to tackle that thicket of regulations that has stymied building and getting a greater abundance agenda. But I think tackling those problems at the source is the answer, not scapegoating migrants. We know that migrants play a significant role in the supply side of the economy as well as the demand side, and I just have to reiterate – migration numbers have come down 37 per cent since their peak numbers under the former government. We’ve done that in managing it because we understand the importance of a strong public support for a migration program. That public support remains strong in Australia, quite different from where it is in many other countries.
Macdonald:
Andrew Leigh is here, the Assistant Minister for Treasury as he puts it, but has a range of other titles. A text I want to put to you, because we’re actually going to talk very soon about Harry Styles running the Berlin marathon in secret in under 3 hours. Now, I’ve had a text saying, ‘Love Andrew Leigh. Might we say he runs like the wind up Mount Ainslie, which is obviously in Canberra. So, you’re a runner. Under 3 hours, Harry Styles – pretty good?
Leigh:
It is pretty amazing. And Berlin is a phenomenal course. I had one of my better runs there, did a 2:43 a number of years back. And it is just a remarkable run because you go right around the city, and you come back to the beginning. And at the end, you pass through the Brandenburg Gate, and the first person to run through the Brandenburg Gate was actually Aussie Steve Moneghetti, who won the Berlin marathon in the first year after reunification, the first year where you could run through the Brandenburg Gate. So, in running Berlin, there’s a special thing as an Australian because you really feel as though you’re running…
Macdonald:
Connected?
Leigh:
Running in those footsteps.
Macdonald:
2:43 Andrew Leigh! What’s your fastest marathon time?
Leigh:
2:42 in Tokyo.
Macdonald:
Unbelievable! Thank you for your time Andrew Leigh.
Leigh:
Thanks so much Hamish, lovely to chat.