Leon Delaney:
The federal government has today managed to have some important legislation passed which relates to unfair trading and traps. And the Assistant Minister for Productivity, Competition, Charities and Treasury also happens to be our local federal member for the seat of Fenner. Andrew Leigh, good afternoon.
Andrew Leigh:
Good afternoon Leon, great to be with you.
Delaney:
Well thanks for joining us today. Let’s start with this important legislation about unfair trading tricks and traps. And I know, of course, one of the big frustrations many people have is when they try to unsubscribe, often the process is made as difficult as possible. You’re hoping to change that?
Leigh:
That’s right. People get sick of having to take an afternoon to cancel something that only took 30 seconds to sign up for, and as a result of our legislation passing parliament, we’re getting rid of that. The legislation also cracks down on drip pricing, which is where you get to the end of the checkout process and there’s an additional compulsory fee that’s added and also puts in a ban on unfair trading practices which include these sort of dark patterns that try and steer you into choices you didn’t want when you’re shopping online. Now, all of that’s about trying to make sure that families get a better deal. Whether it’s subscribing, whether it’s shopping online, whether it’s getting a gym subscription, all of those practices will have to comply with our new laws.
Delaney:
I’m a big fan of the idea that the advertised price is the price. So all of these add‑on things that you suddenly discover when you have already made your decision to purchase – they’re basically just rude, aren’t they?
Leigh:
That’s right, yes. So, sometimes retailers will offer to add additional things but sometimes you’ll get to the end, and they’ll say, now there’s a compulsory processing fee. There’ll be no way of getting out of it, regardless of what platform you use to pay with. That will end. If there’s a mandatory per‑transaction fee, it’ll have to be disclosed up front, which is great for the retailers that are already doing the right thing. Right now, they’re competing with one hand tied behind their back because their competitors are hiding fees that they’re going to add later in the transaction, and they won’t be able to do that as a result of these new laws.
Delaney:
Yeah. Fantastic, and of course, it’s not long to go now until later this year, sellers will no longer be able to charge a fee for a credit or debit card transaction – EFTPOS transaction. That kicks in, I think, is it October?
Leigh:
It’s October. So, Visa and MasterCard and EFTPOS transactions will be fee‑free after that. The retailers won’t be able to add them on as a surcharge. And that reflects the commonsense notion that there is no way of payment that doesn’t incur some cost to the merchant. If you pay with cash, they end up having to pay to get the cash taken to the bank. If you pay with a credit card, they pay a surcharge. And so the idea that there’s these surcharges in place, I think it’s just gotten annoying for most people. And this takes away another annoyance from modern commerce and makes comparisons more straightforward.
Delaney:
Well, it’s one of those things that never made any sense in the first place because for a business they don’t charge you a fee if you choose to pay cash, but it actually costs that business more to handle the cash than it would cost if they were paying EFTPOS fees. So, how did they ever have the audacity and the temerity to charge a surcharge for those EFTPOS fees that were actually cheaper than the cost of handling cash? I’m pulling my hair out, Andrew!
Leigh:
Yeah, yeah. I mean, the cost of handling cash has certainly been going up for many retailers, and so I think your intuition is bang on there, Leon. We just want to make it easier for shoppers. A lot of people are under cost‑of‑living pressure and so these kinds of straightforward measures, along with banning supermarket price gouging, which we did on Wednesday, ensures that people are able to see their pay packet go further.
And of course for minimum wage and award wage workers, they’ve also seen a wage rise kick in from 1 July. And for all working Canberrans, they’ve seen a tax cut from 1 July. So all of those measures are about making systems fairer for Canberrans and particularly those who are doing it tough.
Delaney:
I was going to ask you about the supermarket thing because obviously a lot of people have noticed that prices at the supermarket tend to go up over time, and sometimes they go up more quickly than you’d like them to. But how do you determine that a supermarket is actually price gouging? What’s the definition of gouging?
Leigh:
Yes, it’ll be charging a price which is excessive when compared to the cost of supply, plus a reasonable margin. Now, the competition watchdog will be able to make comparisons across other chains. This applies to Coles and Woolworths, but they’ll be able to compare, for example, with Aldi and Costco to get some sense as to what the cost of supply is. They’ve got much better data than ever before in order to do this monitoring. We’ve given the competition watchdog more resources, and so they will be keeping a close eye on Coles and Woolworths. The competition watchdog has shown a willingness to go after the majors. They’ve brought cases, including one they won earlier this year against Coles for discounts that weren’t.
Delaney:
Hello, you still there?
Leigh:
Yes!
Delaney:
Oh, there you go! Sounded like you got cut off abruptly there. I know you’ve got to go in a moment, but I just wanted to finish that off with this price gouging thing for the supermarkets. Isn’t the object of any business to make the maximum possible margin? That’s what they’re there for, isn’t it?
Leigh:
Well, there’s always a risk if you’ve got monopolies that they’re going to gouge consumers or gouge suppliers. And so we put in place a mandatory supermarket code to make sure they don’t gouge the farmers. And we’ve got this increased price monitoring capability around price gouging in order to ensure that the supermarkets don’t gouge consumers. This is a risk if you’ve got highly concentrated markets. In this market, the big 2 have two‑thirds of the market share and the supermarkets report that the ACCC did made very clear that there was a risk that we had concentrated markets. Consumers and suppliers didn’t get a fair deal.
Delaney:
Andrew, thanks very much for your time today.
Leigh:
Thanks so much, Leon.
Delaney:
Thank you. Dr Andrew Leigh, the Assistant Minister for Productivity, Competition, Charities and Treasury, and of course, our local member right here in the federal seat of Fenner.