Ross Solly:
The latest CHOICE survey looking at supermarket prices has been released. What does it tell us in this moment of cost-of-living crisis, et cetera? Andrew Leigh is the Assistant Minister for Productivity, Competition, Charities and Treasury, and he joins us this morning. Dr Andrew Leigh, good morning to you.
Andrew Leigh:
Good morning Ross, great to be with you. And I’m cock‑a‑hoop like you are!
Solly:
Yes, and are you feeling a bit cock‑a‑hoop to be up and about this morning? Is there any fog where you are, Andrew Leigh? That’s what I want to know this morning.
Leigh:
No, I was out running this morning, it was fog‑free, but very icy.
Solly:
Yes, very icy. There is a bit of fog around apparently in some parts of our listening area, so do take it easy.
So what’s the latest CHOICE survey telling us, Andrew Leigh? I mean, normally we see the independents are doing pretty well. Is that the situation this time round?
Leigh:
If you take into account specials, CHOICE has Aldi’s basket at $68.60, Woolies coming in next at $76.82 and Coles with $78.50, and then IGA is $86.33.
So this time round we’ve got Woolies ahead of Coles, which is good news for them and also of course, a reminder that Aldi is still the cheapest, as it’s been in each of these surveys that CHOICE has done, funded by the government.
Solly:
So Andrew Leigh, given all the publicity, given all the negative publicity, and all the – you know, there’s been inquiries, there’s been fines, there’s all sorts of stuff – what do you take away from this? The fact that there’s – I mean it’s less than – it’s about a $10 difference. Does it show that the message has got through to the bigger supermarkets now?
Leigh:
I think the big supermarkets are certainly on notice with our price gouging laws kicking in at the beginning of July, so just a couple of weeks away now. That’s on top of the work we’ve done on shrinkflation, providing more resources to the ACCC to go after misconduct and you’ve seen already Ross, the cases they’ve taken against both Coles and Woolworths for discounts that weren’t. And then also making sure that we’re doing more to allow new supermarkets to enter by providing access to land which has been an issue for grocery competition in the past.
Solly:
What does this mean for – it’s interesting the latest inflation figures have just come out, Andrew Leigh and they’re – actually inflation’s on its way down, although the underlying inflation figures apparently, to those in the know, are still problematic, and I see that there are still economists around now saying we’re still probably going to get a rate rise before the end of this year. Is that your reading of the economy as a man who studies it for a living?
Leigh:
Oh look, I think yesterday’s results were welcome but we certainly know that inflation’s too high. Of course the main driver of that is what’s going on in Iran and the challenge that the economy has faced. We came to office with trimmed mean inflation close to 5 per cent and rising. We’ve now got that moderating but the cost‑of‑living relief that we’re rolling out and the work that we’re doing into making savings in the Budget is all about making sure that we’re putting downward pressure on inflation.
Solly:
So do you think though that another rate rise is possible – I mean there’d be a lot of people listening thinking, well surely if inflation’s coming down, how can they justify an increase? Do you think it’s still possible, Andrew Leigh by the end of this year?
Leigh:
Oh Ross, I think you’d look to the markets to get an estimate of that. It’s not my job to be telling the Reserve Bank what to do or speculating on that. There’s market estimates of probabilities out there.
What we would say is that as a government we’re focused on getting inflation down. The work we’re doing with CHOICE, with price gouging is all about putting downward pressure on prices, making sure that shoppers are getting a fair deal at the checkout and at the same time making sure that farmers are getting a fairer deal through our new Mandatory Code of Conduct that helps farmers in their dealing with the big supermarkets.
Solly:
19 past 7. Just on the deal that your government did this week with the Greens to get the capital gains tax changes through, or to get their support. There are reports today that investment properties which are jointly owned by a couple will lose that grandfathered exemption from capital gains tax and negative gearing in cases where one of owners dies or there’s a divorce and the other half of the house is transferred to the surviving member of the marriage or the recipient in a divorce. Is that your understanding, Andrew Leigh?
Leigh:
Well Ross, the existing arrangements in the tax system cover the acquisition of assets. We’re not changing those arrangements. There will be a range of complex arrangements –
Solly:
But they’re grandfathered, aren’t they? They are grandfathered – those existing acquisition arrangements. Sorry, the existing ownership arrangements are grandfathered. If the person is just inheriting half of a house which they own with their partner who’s died or in a divorce, are they going to lose the grandfathering protection that’s in there for others?
Leigh:
Ross, I wouldn’t want to be giving tax advice to what sounds like quite a specific question there. There is not a change to the general arrangements which have to do with inheritances and assets. There’s certainly no change in inheritance taxation as part of these rules. Fundamentally, they’re all about making sure that people have more of a chance to break into the housing market.
Solly:
Yeah, no I get that. I’m just wondering, and I respect that you shouldn’t be handing out advice but I’m just wondering, if that is the case, do you think that sounds fair? That others who are already taking advantage of the system and have taken advantage of the system and are benefitting from the grandfathering clauses that are being put in there, that they continue to enjoy those benefits but somebody whose partner dies and then they take over the full ownership of the house, that they will be exempt from the grandfathering protection. Do you think that sounds fair? Does that sound right to you?
Leigh:
Well Ross, the fundamental unfairness is a generation of young Canberrans struggling to break into the housing market –
Solly:
Yeah, no, no, no I get that. I do get that, but I’m just wondering about this grandfathering situation with people whose partners die or in a divorce case they might get full settlement and full ownership of the house?
Leigh:
Well look, this is how the existing arrangements in the tax system currently work in the acquisition of assets. We’re not making changes to those, and you know, I do want to be careful about giving what sounds like specific advice for quite a detailed situation –
Solly:
Yeah, I –
Leigh:
Fundamentally, this is a package which gives all of the revenue back through tax cuts for working Australians, including a new Working Australians Tax Offset and changes which are seeing already first‑home buyers getting into the market where for a generation they’ve been crowded out by investors.
That’s a fundamental fairness question for Labor. We want to see the home‑ownership rate going back up rather than going down as it’s been doing for decades.
Solly:
Interesting. Indeed. Good to have you on the show this morning, thank you Dr Andrew Leigh. Are you going to go down tomorrow and watch the Socceroos by the way, Andrew Leigh? What do you reckon? 1 o’clock in Civic, I think it’s going to be.
Leigh:
I don’t know if I’m going to be down in Civic, Ross but certainly looking forward to watching them.
Solly:
Yeah, go the Socceroos. Just out of interest, do you think the Socceroos – do they reflect how monoculture would be wonderful in Australia? Or is that a great reflection of multicultural Australia, Andrew Leigh, just out of interest?
Leigh:
They’re a wonderful reflection of multicultural Australia, Ross and I think soccer possibly is the most multicultural of sports. It draws Australia together and it reminds us of the strength and diversity. We’re a nation which has benefitted so wonderfully well from immigration. It doesn’t just bring us people, but you also get those different styles of play that come into the game.
Solly:
Yeah.
Leigh:
And in some sense it’s a microcosm of the benefits that migration brings to an economy.
Solly:
Yeah.
Leigh:
Workplaces that work better when someone says, ‘Hey, this is how we used to do it in Vietnam’ or ‘This is how we do it in the United States’ or ‘This is how the UK does things’. All of that diversity strengthens us. Monoculture’s slow and tepid and fundamentally, you know, the sort of authoritarian sense around the monoculture debate really troubles me.
Solly:
Yeah I mean, and I thought the Socceroos are a great example of multicultural Australia. Which is why I can’t get my head around when Pauline Hanson said yesterday that this is a great example of what a monoculture Australia would look like. And I’m still battling away trying to understand that all. Appreciate your time this morning Andrew Leigh, thank you.
Leigh:
Thanks so much Ross.
Solly:
That’s Dr Andrew Leigh, the Minister for Productivity, Competition, Charities and Treasury.