David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

I am not seeking to engage in argument on this. The figures I quoted were from the IbisWorld Supermarkets and Other Grocery Stores in Australia report from this year.

Let's assume for just one minute that proponents of divestiture are arguing that 25 per cent is the cap—that that is the limit on what market share should exist. That means anyone who has more than that in market share is going to have to forgo stores all around the country. One has to ask the question: where are the first stores that are given up going to be? Are they going to be the most profitable stores? I suspect they will not be the most profitable stores; I suspect they will be some of those stores in poorly serviced areas, often in rural and regional communities. It is worth noting that we are talking about companies that employ a significant number of Australians; in fact, the numbers are in the thousands, if we put the two major supermarket chains together.

If we are to force divestiture, which is the proposition we are talking about here, that would mean Coles and Woolworths would have to basically sell some of their stores. I put it to you that it would be the least profitable stores that they would be willing to sell. I also ask the question: who is going to buy these stores? Quite often the people who are most opposed to divestiture are the people also most opposed to foreign investment. It is most likely that the lack of capital that exists within this country means that foreign capital will come in and pick up those stores. I assume that we are happy with that foreign investment, but I understand that is not without contention in this place. The ACCC report indicated that ALDI, which is foreign owned, was a force that was bringing competitive pressure into this sector. So we see that the complex dynamics of divestiture are not as simple as the suggestion that you simply divest.

I put it to you all that there are legitimate concerns being raised in relation to market power. There are a number of changes that have been made to our competition laws in recent times, many of which have not been tested before the courts. The ACCC Chairman, Rod Sims, has indicated that the ACCC are undertaking very, very robust inquiries in relation to some of these matters. I think it is important, and the government believes it is important, that we give the regulator the opportunity to test the laws that have already been introduced. If it is the case that there are suggestions that the laws are ineffective or inadequate to address clearly identified problems, then of course the government will consider what action that requires.

Can I make some further points in relation to the lack of alternatives to the approach that the government has outlined. I know that the opposition will have their opportunity to contribute to this debate. I was really interested to find out what their position on competition policy was. I had a look at the coalition speakers notes that were leaked a bit earlier this year. There are about 140 pages, and I searched the notes page by page from front cover to back cover and I could not find anything about competition policy. I then thought that it must be in there under consumer policy. Well, there was nothing under consumer policy either. In fact, I was alerted to this by an article, an opinion piece, that I saw in the paper this morning from Peter Costello, who said:

Recently, Nationals senator John ''Wacka'' Williams called for an ombudsman to be given the power to force supermarkets to increase prices.

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But a statement like that should draw a response from political leaders lest people start thinking it is serious.

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A government has to decide whether it is for the consumer or the producer.

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The Coalition has committed to a ''root and branch'' review of competition policy. This will be another showdown between rational economics and rural populism.

We know who has the balance of power over there at the moment—it is the rural populists. The rural populists are in control. Well, at least in opposition the rural populists are in control. When I heard about this root and branch review I thought that maybe there is a policy. So I went to the website of the member for Dunkley, who is the shadow minister in this area. I thought that perhaps he had set out some of the problems that they have identified and need to be assessed in this root and branch review. When I looked at the website the word 'competition' only appeared in the headline. There was no reference to competition. In fact, the Competition and Consumer Act, the relevant piece of legislation, was not mentioned. The only thing I could see a reference to was the Australian Accounting Standards Board. I have been scratching my head all day trying to understand what connection that has with competition policy.

Let's not forget that there have been two major reviews of competition policy in the last 20 years—the Hilmer review and the Dawson review. And let's not forget that neither of those reviews recommended divestiture powers. Indeed, the last root and branch review, which was the Dawson review, recommended a couple of interesting things like the criminalisation of cartel conduct, which is something that the former government sat on for year after year and did nothing about. It took this government to come into power and to introduce legislation to criminalise that conduct.

We will continue to monitor developments within the marketplace. To the extent that evidence emerges that there is misuse of market power that extends beyond those powers that the ACCC currently has, we will stand ready to consider any future changes. (Time expired)

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