James Glenday:
Let’s get more on the supermarket report. And we are joined now by the Treasurer, Jim Chalmers, who is at Parliament House in Canberra. G’day, Treasurer. Good morning.
Jim Chalmers:
Morning, James.
Glenday:
Now, this report says Coles and Woolworths are among the most profitable supermarkets in the world. Are they gouging us?
Chalmers:
That’s not the conclusion of the ACCC, but the ACCC does say that there’s a lot of market dominance.
What we need here and what we’re delivering here as a government is more scrutiny, more information and more competition.
The report’s really welcome because what it shows is that there are things that we can do and there are things that we are doing to crack down on the supermarkets.
We’re all about a fair go for families at the checkout and for farmers at the farm gate. This will help us put in place the right protections for people.
The government is already acting on a number of recommendations of this report. We made the Food and Grocery Code mandatory. We’ve funded the ACCC and empowered them to crack down on dodgy practices in the supermarkets. We’re reforming the unit pricing code, which is all about that sneaky shrinkflation that drives people crazy. We’re working with the states and territories on planning and zoning to make it easier for new competitors to come in and compete with Coles and Woolies.
All of these are the things that we’re doing. The ACCC has been really helpful in this report and before that, and they will be subsequently in helping to inform that agenda.
Glenday:
Your government’s had this report for about a month. Is there a reason you can’t commit to more of the 20 recommendations?
Chalmers:
We’re committing to all of the recommendations in principle, and as I just said, we’re implementing a bunch of them already.
Whether it’s unit pricing, competition, planning and zoning, the Food and Grocery Code, empowering and funding the ACCC, we’re also funding the supplier groups to empower them, to strengthen their arm in their negotiations with the big supermarkets – this is all about cracking down on the supermarkets.
We know that people are still under a pressure and a lot of that pressure is felt at the checkout. And so we are doing what we can to keep the supermarkets in check at the checkout. And this ACCC report will help us go about it.
Glenday:
Just on the suppliers. I think it’s just under $3 million going to be allocated over 3 years in Tuesday’s Budget. Do you think the industry will be satisfied with that? Because some have said that they need a lot more to ensure that they can negotiate fair terms for their produce.
Chalmers:
Respectfully, industry groups always say that they would like more. I understand that. That’s a story as old as time, James. But what we’re doing here is we are funding those groups to train up and tool up to be able to engage more effectively in those negotiations. It’s a really important step, but it’s also not the only step that we’re taking. An extra $30 million we gave the ACCC to empower them and all of the other policy steps that we’re taking.
We are cracking down on the supermarkets because we know that there is market dominance. We know that people are under pressure. That’s why the Budget’s going to be about the cost of living. It’s also why we accept, in principle, all of these recommendations of the ACCC’s work.
Glenday:
The Nationals and the Greens have been pushing for a breakup of the big supermarkets to increase competition. That’s not a recommendation of this report. Is it an idea you might revisit, though, say, in another term if competition doesn’t improve in the sector?
Chalmers:
The risks of that outweigh the benefits. You’ve got to be really careful that when the Nationals come up with a press release about this that it’s not counterproductive. There’s real risks that it is.
The ACCC has handed down a 441 page report, and not on any of those pages does it support divestiture powers which are being proposed by our political opponents.
Glenday:
Sorry to jump in there. I mean, why would the risk outweigh the benefits? Can you spell that out for us?
Chalmers:
For example, if you make one of the big chains sell in a community, there’s a risk that it’s just snapped up by the other big player in the supermarket sector, and that would be counterproductive. Or if it chases supermarket options out of town in regional communities. It’s got hairs all over it, frankly. That’s why it’s not recommended on any one of the 441 pages of this report.
The other thing, which the ACCC chair has said before, is that what we’re doing when it comes to mergers and acquisitions reform – big change, big competition policy change that myself and Andrew Leigh have brought in – that actually gets in before some of these issues, which would require divestiture. And so, we’re doing a whole bunch of things that are more effective than what our opponents are proposing. And that’s why the ACCC is not recommending what they are.
Glenday:
I just want to get you on 2 other quick issues before we let you go. There’s a lot of debate in your home state of Queensland about Olympic venues. Will there be funding in Tuesday’s Budget for maybe a new stadium?
Chalmers:
Our funding’s for the Brisbane Arena. We’re funding that enthusiastically. Two and a half billion dollars already in the Budget for Brisbane Arena and then almost another billion for smaller venues, legacy venues around southeast Queensland. We’re very proud to be making that commitment because the Olympics are going to be amazing.
We’ve come to the table with billions of dollars in investment – our investments for Brisbane Arena, $2.5 billion, plus smaller venues, almost a billion.
Glenday:
You’ve got a Budget next week and I know that after a long day crunching the numbers, you like to exercise while listening to the rapper Ice Cube. We’ve spoken about this before. We had Ice Cube on the show a few weeks ago.
Chalmers:
I can’t believe you had Cube on the program. Unbelievable.
Glenday:
We did. He was here. He was a bit sceptical of us, but that’s okay. So, I wanted to ask you what lyrics best sum up your fourth Budget? ‘It was a good day’ or ‘check yourself, before you wreck yourself’?
Chalmers:
I was anticipating a question from you about Cube today, James, but I wasn’t anticipating that question. You’ve got to be, as you know, you’re also an aficionado, you’ve got to be very, very careful with the lyrics from –
Glenday:
You do.
Chalmers:
Cube tracks. You got to be very careful.
Hopefully it will be a good day and hopefully it will be a good day next Tuesday.
We’re putting the finishing touches on the Budget today. We’ll send it off to the printers on the weekend and it will reflect the progress that Australians are making together. But it will also recognise that Australians are under pressure still. There’s a lot of global economic uncertainty.
So, the big focus will be the cost of living but also making our economy more resilient in the face of all that global economic uncertainty. And once we get it done and dusted, I’d be happy to come on the show on another occasion and talk about the acceptable parts of Ice Cube’s lyrics.
Glenday:
Jim, I read all your interviews. I just didn’t want before people write in to say we’re losing the plot. I just didn’t want another ‘all will be revealed on Budget night’ answer. We do appreciate you being a good sport and thank you for joining News Breakfast.
Chalmers:
Thanks so much, James.