Jodie Campbell (Bass, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer. What is the government doing to place downward pressure on the cost-of-living increases for working families? In particular, what is the government doing to protect working families’ weekly budgets for groceries and for petrol?

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Bass for her question. Australians have been dealing with increases in the cost of living and financial pressures for some time. Families and individuals with a mortgage have been dealing with 12 interest rate increases in a row and the highest underlying inflation in 16 years. Within those inflation figures there is cause for concern. The price of everyday, unavoidable purchases for working families has been going up even more than the average inflation rate. Inflation is concerning, of course, but, when the price of basic purchases which cannot be avoided is going up more than the average inflation rate, that is a cause for particular concern.

Since 1996 in Australia, food inflation has increased by 43.6 per cent. The price of food has gone up by 43.6 per cent.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Mr Ciobo interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Moncrieff!

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The comparable figure in the United States is 25.1 per cent. The figure in the United Kingdom is 11.6 per cent, while the relevant Canadian figure is 22.1 per cent. So food inflation in Australia has been much higher than in countries that we normally compare ourselves with. Of course, the response of the previous government was to shrug their shoulders and say, ‘Well, Australian working families have never been better off; therefore there is nothing we could or should do,’ but this government has a different approach.

Whilst recognising that there are a range of factors which lead into increases in grocery and food prices, it is appropriate that we ensure that the grocery market in Australia is as competitive as it can be. There are a range of factors leading to these increases, as we have always said. Whether it is the drought or the growth in demand for food from Asia, there are a range of factors. But the fact that Australia has had the highest food inflation amongst the major OECD countries is cause for concern and presents a good reason for further examination to get all the issues on the public record and all the policy proposals on the public record.

We believe that competition is the best way to put downward pressure on grocery prices in Australia. That is why, on 22 January, the government instructed the ACCC to commence a formal inquiry into grocery prices under part VIIA of the Trade Practices Act, implementing another election commitment of this government. This has been supported by a diverse range of groups, from Choice, on the one hand, to the National Farmers Federation, just today. I endorse the comments of the National Farmers Federation, which in its release earlier today said:

CONSUMERS – increasingly attuned to rising food bills – are justified in wanting to know what is driving higher food prices. Likewise, Australian farmers are just as eager for the Australian Competition and Consumer Commission (ACCC) to get to the bottom of where the money is going, the National Farmers’ Federation (NFF) said today.

I also endorse the comments of the vice-president, Charles Burke, who said:

… The truth is farmers only ever receive a small portion of the price paid at the check-out … There appears to be an increasing gap between farm-gate and retail prices, therefore, this is a good opportunity to find out exactly what is happening in the supply chain.

I also note that the Leader of the Opposition has called for the terms of reference for this inquiry to be expanded. I am not sure whether he supports it or opposes it or neither supports nor opposes it, but he has clearly called for the terms of reference to be expanded, so presumably he supports it.

The closing date for submissions to the inquiry has now passed, and there will be a range of hearings across the country in every state and territory, covering both rural and metropolitan areas. The inquiry has wide-ranging terms of reference and will examine competition and cost pressures at every point in the supply chain, from the farm gate to the checkout counter.

In addition, one practical measure the government can take to assist families in dealing with cost-of-living pressures is to give them more information about supermarkets in their area and which is generally cheapest. This will assist in a modest way to correct the imbalance between retailers and consumers and to bring more transparency—

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Mr Ciobo interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I warn the member for Moncrieff!

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

to the grocery-pricing process. The ACCC is working with the government on developing a basket of goods which can be surveyed to give consumers more information about which supermarket in their area is generally the cheapest. This information will be included on a dedicated website linked to the ACCC website, implementing another election commitment of the Rudd Labor government. Consumers will of course then be able to make their own decisions, based on their own experience, and will compare quality, service delivery and price, based on their own experience and the information available on the website. Of course, it will not be possible to have the price of every good in every supermarket in Australia, but it is important to remember that, the more information consumers have, the more transparency and information we have in the grocery market in this country.

Another unavoidable expense for many Australians is, of course, petrol. The House is aware of the steps that the new government has taken since its election to introduce more transparency and competition into the Australian petrol industry. The community is particularly concerned about petrol prices in the lead-up to long weekends and holiday periods. In the lead-up to Easter, the increased investigatory powers that the new government has given to the ACCC will be particularly important. On Friday, the ACCC chair, Graeme Samuel, after consulting with the government’s nominee for the office of petrol commissioner, wrote to petrol companies seeking any advance information available to explain any divergence between the Singapore price of oil and the price of petrol in Australia over the Easter period. Honourable members will recall that the divergence between the price of oil in Singapore and the price of petrol—

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr Speaker, on a point of order, which goes to relevance: could the Assistant Treasurer, when he is talking about the impact of the petrol commissioner, explain when the petrol commissioner is actually going to start work?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Dickson will resume his place. The Assistant Treasurer will bring his response to a close.

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

He clocks on about 11 years too late. That is when he should have clocked on—you should have done it 11 years ago.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr Dutton interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Assistant Treasurer will ignore the member for Dickson. The member for Dickson will cease interjecting. Assistant Treasurer, bring your response to a close.

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I will. Thank you, Mr Speaker. Honourable members will recall that, on the last occasion the price of oil in Singapore diverged from the price of petrol in Australia, the ACCC exercised its powers given to it by the Rudd government. After those powers were exercised, the divergence disappeared and the difference between the price of oil in Singapore and the price of petrol in Australia returned to more normal levels. The House can be assured that the ACCC will not hesitate to use its formal investigative powers over the Easter period. It also can be assured that this government will take every step—

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Urban Water) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order. Last week I raised the question of answers in this place taking the form of ministerial statements. I believe that this answer is beginning to take the form of a ministerial statement.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The question was in order. The response is relevant but lengthy. The Assistant Treasurer will bring his response to a close.

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

In conclusion, the House can be assured that the government will take every step to put downward pressure on the prices which cause concern for everyday Australians—something the previous occupiers of these benches abjectly failed to do for 11 years.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Given the importance of Australia’s strong regulatory and monitoring regime in ensuring our financial system is resilient and secure in the face of international shocks, such as the current global credit crisis, is it still the government’s intention to cut $129.8 million in funding to ASIC, as recently announced by the Minister for Finance and Deregulation? Does the Treasurer really understand the impact of this significant budget cut on Australia’s independent corporate watchdog?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his question; it is a very important question. We have experienced regulators in this country. They are first-rate and there could not be a period in our history when they have been more important. We are talking to them daily about international financial turbulence. We have talked to them about their budget. For the next two years, we have rescinded the proposal that we took to the last election for very good reasons—because our regulators need to be as strong as they possibly can be. They need to receive the full support of the government. They are receiving the full support of the government and the full financial commitment of the government.