24 March 2009

Interview with Leon Delaney, 2SM

SUBJECTS: Unit pricing, 2009 Budget, global economic conditions

LEON DELANEY:

Federal Assistant Treasurer Chris Bowen, good morning.

CHRIS BOWEN:

Good morning Leon.

DELANEY:

How are you today?

BOWEN:

I'm doing fine thanks - how about you?

DELANEY:

Not bad at all. A couple of things to go on with today, first - just how long is a roll of toilet paper, and does it matter if it is one-ply or two-ply?

BOWEN:

[Laughs] Well, it is one of the great questions of life Leon that one of our newspapers is contemplating this morning. All to do with unit pricing, we are introducing unit pricing in supermarkets. It will be compulsory for large supermarkets from the first of December this year.

What this means is when you go shopping there will be an element on the shelf, a sign on a shelf, which will let you know the price per unit. So as well as the total price, you will be able to compare value - per hundred grams or per metre as is the case. Now there is some dispute about how we do it with products that are on a roll – like toilet papers - our proposal is that we do per sheet, some of the retailers think it should be done per roll. It is not really one of the big issues that is confronting the government at the moment.

We will work it through with the industry and with consumer groups, and work out what is the best model; we have a paper out of consultation at the moment.

DELANEY:

Unit pricing is certainly a good idea, but when it comes to something like toilet paper, I mean it really is a question of, some rolls have 100 sheets, some have 300 sheets, some have one or two or three ply, even the actual size of the sheet can vary.

BOWEN:

The view I have taken is it is best to do it per sheet, because that is the best comparison, but really as I say we will work it through. When you look at all the items in supermarkets, and there can be up to 20,000 items in a supermarket, there are sometimes questions that need to be posed. Now we have taken the view that the best unit of measurement will apply across the board - and that's per 100 g - but there is some cases that we might need a different unit of measurement.

Herbs and spices, saffron for example, we will do per 10 g along with all the other different herbs and spices. Fresh meat per kilogram, fresh vegetables again per kilogram, cheese per kilogram, milk per litre.

So look there is different measurements which will be most appropriate for some items rather than others.

DELANEY:

And of course taking a purely quantitative approach like that leaves no consideration of quality does it?

BOWEN:

It would really be impossible for the government to have a system to compare quality. Really consumers are in charge of comparing quality, we are about making it easier for consumers to compare prices.

People can look at the prices and think "well that one is a lot cheaper, and it might be slightly less quality but not enough to justify me paying a lot more for the other one".

Really every consumer is going to make their own choices on quality, and of course different people have different views about quality of goods. You more like one particular product, might prefer a different one. But we should be able to compare the prices quite easily, and that is what unit pricing is about.

DELANEY:

Indeed, and certainly it is a great idea which will help simplify shopping for everyone.

BOWEN:

Thanks Leon and I think it will. You know when you are doing your shopping sometimes you have kids in tow, you're trying to concentrate on just getting in and getting out, and some units of measurement are very complex, you might have a 575 gram tin, and you might have a 625 gram tin, and you're standing there scratching your head….

DELANEY:

you need a pocket calculator!

BOWEN:

….trying to work out which one is cheaper – that will all go, because you will have the comparison right there in front of you on the shelf and also in catalogues and other advertisements. You might be planning your shopping at home, and you can do the comparison before you go.

DELANEY:

There are warnings today that in framing the budget the government may be considering ditching its election promises - now obviously you can't tell us what is or is not in the budget this year, but should we be concerned that the government might be about to break an election promises?

BOWEN:

I saw that report, and I thought it was a bit unusual.

You always get the lot of speculation around this time of year about what is going to be in and out of the budget. You get some leaks, some of them might be on the money, and some of them are way off the money in terms of what the government is even contemplating, and you can imagine that the government in going through and framing budget, the previous government and we are no different, looks at a range of options and considers what is the best way to go.

This is a tough budget there is no doubt. The world circumstances mean that we need to be very careful about how we are framing this budget, but we have, we can assure your listeners from the Prime Minister down, we have a very solid view of election commitments. If we promised to do it there has to be a very, very good reason for us to revisit that. And as I say I think a lot of speculation in the media around this time of year is often misplaced.

DELANEY:

So there will be no broken promises in the May budget?

BOWEN:

Well, when you look through our promises, the vast majority of them have already been implemented, and those that remain to be implemented we will implement. Now there are things like paid maternity leave for example, which we promised to have a very good look into and we have done that with the Productivity Commission report, and we are considering that in terms of the budget. We have also promised, we didn't do this as an election commitment, we have said this since the election that we will examine the issue of long-term pension reform, and we will.

We are taking all those commitments very, very seriously - and if there is an election promise which can't be implemented you need to have a very good reason or justification for not proceeding down that road, and that's not something that is being considered.

DELANEY:

Is Australia in recession?

BOWEN:

Well ,we are certainly in a slowdown around the world. There are different definitions of recession, the technical definition is two consecutive quarters of negative growth - we haven't gone there – but we do have, we are seeing, a slowdown and the Prime Minister has made it very clear, and I agree with him of course, that avoiding recession will be difficult. But we are doing our level best to make sure that our growth and jobs, that are the most important thing, are as robust as possible; that we don't lose any more jobs than we need to. We have said all along this crisis will wash over Australia, it will have an impact, but our job is to make the impact as small as we possibly can.

DELANEY:

Thanks very much for your time today.

BOWEN:

Good on you Leon, it is always nice to talk to you.

DELANEY:

Thanks for that, Chris Bowen, the Assistant Treasurer.