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

I have received a letter from the honourable member for Kennedy proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failures of the current executive of the Australian Competition and Consumer Commission to discharge their statutory responsibilities.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

The head of the Australian Competition and Consumer Commission, Mr Graeme Samuel, was in the paper recently saying—if he was correctly reported—that he would have to question the takeover of Rio Tinto by BHP Billiton. We were talking about spine before. Marius Kloppers, the head of BHP, has shown considerable courage and resolution in standing up to the Chinese over the issue of iron ore prices. On the subject of iron ore prices, he would be in a much more powerful position to deal with China and a position much more beneficial to the people of Australia if he were able to proceed with the takeover of Rio Tinto.

Mr Samuel never made a peep when the seven major mining companies in this country were taken over by foreign corporations. So whilst minerals have risen 300 per cent in value, all of that benefit has floated overseas. The people on both sides of this House have an awful lot to answer for, but Mr Samuel and his officers at the ACCC are being paid big money to do a job they are not doing. They never made a peep when all those Australian mining companies were being taken over, but when an Australian managed company—it may not be an Australian owned company, but it is an Australian managed company; it is managed by Marius Kloppers, an Australian—attempts to take over a foreign company, suddenly we are getting loud economic reationalism lectures from this man. He is acting to the detriment of the Australian people and should be removed from office. This is no cause for shaking your head here, Mr Acting Speaker—I mean Madam Acting Speaker.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

That is what I am getting at!

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

It might be a laughing matter for you—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

No, I am not laughing—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

but it is not for the union members in my electorate who are trying to get decent pay. I am talking and you are laughing.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Kennedy will wait to be heard. I am not laughing and I will not have my comments associated with laughing at this matter. I am laughing at your inability to get my gender right and I ask you to respect the people in the chair and use the proper title of Deputy Speaker.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Let me now be very specific on the issue of the report that came down the week before last, Madam Deputy Speaker. I quote from page xx of the report:

The ACCC has not found any evidence ... In particular, there is no across-the-board evidence to suggest that retail prices for fresh products are going up by a greater percentage than farm-gate prices.

Milk pre deregulation was 53c a litre to the farmer and it is now 43c a litre, so that price has gone down. The price was 115c to the consumer. It is now 184c. So that is a lie with respect to milk. Let me move on to sugar. It was pre deregulation $350 a tonne. For the last six years it has been $274 a tonne. It is now $344 a tonne. So the price to the farmer has gone down considerably. The price to the consumer has gone up from $1,115 a tonne to $1,300 a tonne, so the margin has certainly widened dramatically there. Potatoes were $1,100 a tonne. They are now $1,500 a tonne. The price to the farmer was $500 a tonne. It is still $500 a tonne. The price of eggs to the farmer was 117c a dozen 15 years ago. It is now 120c a dozen. It was 185c a dozen to the consumer. It is now 394c a dozen to the consumer. These are not my figures; they are in ABS catalogue 6403—just to help out Mr Samuel and his officers.

We keep talking in figures and statistics and I do not think that people really understand that, so I purchased a kilogram of potatoes and took them along to the tribunal. Today I purchased them for $2.46 a kilogram. I rang up my farmers and found out what today’s price was. It was 62c a kilogram—so 62c a kilogram to the farmers and $2.45 a kilogram to the consumers for potatoes, the most prolific thing that we eat. Today I went and purchased a litre of milk, something that every Australian has every day. It was $1.99. The farmers got 51c, the packagers got 15c—so 66c—while Woolworths and Coles took $1.99. This milk and all of the other items I have here with me will be very valuable to Mr Samuel. In fact, I will give them to him for free.

Today I bought eggs. The farmers get $1.40 a dozen and consumers are charged $4.85 a dozen. This is shameful. This is unbelievable. I note these are not items that perish, unlike the bananas or mangoes that I could bring along which might perish in some cases. Sugar does not perish and, if you wished, you could keep it for 10 years. The farmers and the refiners get 39c a kilogram. Today I bought sugar. I and the consumers are paying $1.35. These are 300-plus per cent mark-ups.

Once upon a time, in the case of sugar, eggs and milk, we went along, as did the trade union movement in Australia, to a tribunal and that tribunal said what was a fair price to pay farmers—for milk in this case—what was a fair price that consumers should pay for it and what was a fair price for retailers to get. The minute that tribunal was taken away the price of milk paid to the farmers went down by 20c a litre—one-third of their money was taken off them. The price to the consumers went up by 42c a litre. So when the tribunal was taken away and the fairness test removed we went to the free market, suddenly the price went through the roof. I will not continue on with that, but it was the same with eggs and sugar, and I could quote the figures. I present those cases to indicate that what Mr Samuel has said is totally incorrect.

I refer to the second thing that he has said, and once again there is no excuse for this as these things are all catalogued, and I have already referred to catalogue 6403. I again quote from the report:

Statistics analysed by the ACCC suggest that Coles and Woolworths account for approximately 70 per cent of packaged grocery sales in Australia ...

That was repeated by Mr Samuel to the national media. That 70 per cent in itself is disgraceful. I think for other countries the closest to Australia’s figure was 40 per cent and there were four or five people in Great Britain who held that. There is no country on earth that has anything like the concentration of market power that Australian has, and it was a committee of this place that decided that and then recommended doing nothing.

Let me come back to his statement of 70 per cent. Surely he in his position must know, given he has made that national statement of this nature, that in 1991 Woolworths and Coles had 50.5 per cent of the market and by 1998, according to the government of the time and their committee of inquiry, the big two had 64 per cent of the market. If you want to take the AC Nielsen series, which probably has the more accurate figures, then it was 68 per cent in 1998—but I do not care whether it is 64 or 74 or whatever. In 2002, according to the AC Nielsen series and according to Retail World, the bible as far as this goes, it was 76.7 per cent. Woolworths have claimed that they have had a 10 per cent market share growth almost every year since—and I hold up, as document No. 3, a press release from Woolworths saying this year they expect a ‘10 per cent market share growth’. In 2002 they claimed an 11 per cent market growth.

I want to be very fair here: you must take out CPI and GDP growth to get a fair figure for their market growth. But, no matter how you configure this, they now have well over 80 per cent of the market. That means they can charge whatever they please. That is why all those items carry a 300 per cent mark-up. In retailing we have very high mark-ups. My family were in retailing but we could not dream of a mark-up of 300 per cent. There is a terrible name for that—and everybody here knows what the name for a 300 per cent mark-up is.

Why are they doing it? Because they can do it. It is because, unlike in any other country on earth, they have 80 per cent of the marketplace. We ask the government: when will this situation be assailed?

Every four days a farmer in this country commits suicide. Isn’t that something for us to be proud of as a race of people!

Last time I did the figures, I found that in nine years time this country will become a net importer of food. That prediction varies up and down. There is another set of figures that would indicate it will be in 26 years. But, whichever way you configure it, this country will not be able to feed itself in the near future. That is simply because the farmers are getting no money.

Let me return to Mr Samuel and his comments. Further on in this report, he says that ‘the ACCC finds that the increase in domestic fertiliser prices’—the ACCC have done a separate inquiry into fertiliser—‘reflects international prices’. This is a most extraordinary statement, as it is indicated in the ACCC’s own report that there is DAP, or diammonium phosphate, which is a phosphatic fertiliser, and urea, which is a nitrogenous fertiliser. The usage in Australia is divided about fifty-fifty. Mr Samuel’s comment would be fair if he was referring to DAP, but he takes both DAP and urea into account. In 2005 we were getting nearly $400 a tonne for urea—that was the world price—and the price today is still around $400 a tonne. Since 2005, the international price for urea has stayed at around $400 a tonne. But, according to Mr Samuel’s own reports, it has gone to $800 a tonne in Australia. Mr Samuel said the domestic prices have moved in sympathy with the international prices. But his own graph in his own report makes a lie of his statements. Either he did not read this document or he is deceiving the people of Australia and once again speaking on behalf of the corporate interest.

The poor farmers are being ripped off by a similar situation in the fertiliser industry, because there are only two people from whom you can buy fertiliser in Australia. Governments on both sides have told people like me and the honourable member for New England that the National Competition Policy was going to be a good thing for us. I do not know where it has been a good thing for us. It certainly has not been good for us in mining with no infrastructure and it certainly has not been good for us in the area of farming. Where the hell has it been an advantage for us?

The people’s watchdog, the ACCC, does not bark; it is a watchdog that bites not the burglar but its master—or its supposed master—the Australian people.

It has been going on and on and on. The farmers out there are committing suicide. The great songwriter Graeme Connors can write a song about the politicians and the bankers looking up at the glow in the sky as we burn ourselves in our cane fields. We have had three cases where people have effectively just walked out into the cane field and put a fire around themselves and incinerated themselves to death. That is what is happening in our country. Why? Because we have allowed monopolists to take control of the economy of Australia and we have done nothing about it.

Up on Mount Rushmore there is a very famous man called Teddy Roosevelt. Do you know why he is up on Mount Rushmore? Because he confronted Rockefeller. He showed guts. We talked about spine before. He was a man with the backbone to stand up for what is right. But the only person the ACCC stands on is an Australian BHP, which has been doing a good job for this country—and a good job that needed to be done. This malodorous smell in the nostrils of every decent Australian has to be removed! (Time expired)

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

The ACCC plays a very important role in the Australian economy. Competition provides benefits for consumers. Ordinary Australians, as the member for Kennedy rightly points out, rely on their watchdog to ensure competition. It was Adam Smith who said that businessmen, when they get together, will in many cases turn their minds to collusion. It is necessary to ensure that that does not occur. That is why the ACCC is such an important institution. People rely on it to promote competition and a fair deal.

In relation to the member for Kennedy’s opening remarks, I must say that one thing which is not in the ACCC’s remit is foreign investment. They do not regulate foreign investment. They have no role in foreign investment. That is a matter for the Foreign Investment Review Board. In fairness to the ACCC, they cannot play any role in foreign investment and it is not accurate to say they have ignored other foreign takeovers—that is the responsibility of a different organisation.

In relation to the member for Kennedy’s comments on the grocery inquiry report which was recently handed down, the most important thing is that the ACCC recommended a series of changes to the Horticultural Code. I do not want to put words in the member for Kennedy’s mouth, but I think I am right in saying that these are changes which the member for New England and the member for Kennedy have been calling for in the past. They have been calling for these changes for some time, and the previous government ignored them. I know that the National Farmers Federation has welcomed the changes recommended by the ACCC to the Horticultural Code.

What is important is the action that arises out of the report. I know that the member for Kennedy is disappointed that the ACCC did not find anticompetitive conduct, unconscionable conduct, on the part of Coles, Woolworths and other retailers. In fairness to the ACCC, what they said is this: ‘Come and give us evidence in camera, come and give us evidence confidentially, and we will make recommendations accordingly.’

The ACCC makes recommendations based on the evidence in front of them. What they have said is that they think the situation can be improved, and that the horticultural code of conduct can be improved and farmers can get a better go. That is what counts: that farmers do get a fairer chance. The minister for agriculture and I have agreed that the horticultural code of conduct will be reviewed with a view to implementing the recommendations of the ACCC.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Katter interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Kennedy.

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

As the member for Kennedy has said, the ACCC found that Coles and Woolworths are dominant. We can argue about whether it is 70 per cent, 80 per cent or 50 per cent; at the end of the day we all agree that they are dominant in Australia. But what we have to do is say this: if there were to be a forced divestiture of Coles and Woolworths, if the ACCC were to recommend to the government that they be broken up and the government were to legislate accordingly, you would need very clear evidence that that was in the best interests of the Australian people. You would need very clear and researched evidence that the Australian consumer would be better off by the breaking down of Coles and Woolworths, by the breaking down of those economies of scale—and that evidence simply is not there. When you look at the margins of Coles and Woolworths, they are no greater than—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Oh, please! Mr Minister—I mean, honestly!

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Kennedy was heard in silence. I am loath to ask him to leave the chamber in his own MPI but, if he insists on behaving this way, I may have to.

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

other markets which are even more concentrated. But again the important point is: what is the recommendation of the ACCC? That the competition in the grocery market is not good enough—that we need more competition. This is something that the government has been saying for some time: that we need more competition for the grocers in Australia. That is why we have freed up the foreign investment laws—to get more competition into the Australian grocery market. That is why we have the COAG process freeing up the planning laws so that planning cannot be used to stop competition in the grocery market. That is why, as a direct result of this inquiry, the ACCC is going to go after restrictive covenants which stop supermarkets being opened in shopping centres where a supermarket is already in operation. That is the direct result of this inquiry; those are the actions that result out of this inquiry—more competition. Consumers benefit from more competition and farmers would benefit from more retailers being in the Australian market, particularly in the smaller states. In the larger eastern states we have the competition provided by Aldi, for example, which does not exist in the other states. We need to see that spread, whether it is Aldi or others, throughout the country.

The ACCC’s job is to promote competition. The ACCC’s job is to enforce competition. The ACCC’s job is to advise government on how competition can be improved. The ACCC has been doing that for a long time. The previous government froze them out. The ACCC has been calling for years for section 46, the predatory pricing clause of the Trade Practices Act, to be considerably strengthened to give them the tools to do their job. The previous government for 12 years refused to do it. Next week it will pass this House. After the 2003 Boral case, which watered down the Trade Practices Act so much that the ACCC brought no more cases, finally that situation will be fixed.

I noted the remarks of the shadow minister for competition in opening the debate. He could not even refer to the bill—that is their commitment to competition. He did not even talk about the bill! He did not even appear to know what was in the bill! Any competition expert in the country would be shaking their head at the contribution of the shadow minister for competition. The previous government refused to criminalise cartels, to put in a jail term for cartels, despite 15 pleas from the ACCC that, if we are going to crack down on cartels in this country, we need a jail term. The previous government ignored it. We will pass it and we will have a significant jail term for cartels in Australia for the first time.

We now have the situation where the ACCC has said of the petrol market in Australia that we have as close to collusion as you can get while still being legal. The ACCC has said that. In the petrol market we have collusion. It is not illegal but it is as close to collusion as you can get while still being legal. The government says that is not good enough. We have asked the ACCC what we need to do to fix that, and the ACCC has come back with Fuelwatch.

When you ask those opposite what they think about a situation where the competition watchdog says that we have as close to collusion as it can be while still being legal, their official policy position is, ‘No worries; it does not worry us—that is fine; we will just let it continue.’ I have had so many taxi drivers and constituents say to me—and I am sure that all honourable members have—’Don’t you think there is collusion in the petrol market? Don’t you think they are ganging up against us?’ And I say, ‘No, I don’t think they are, because they do not need to. All the cards are stacked in their favour. The information is shared by retailers, and consumers just don’t get a go.’ That is what Fuelwatch is about, and the Liberal Party stands opposed to it—well, part of the Liberal Party; there has been a development.

We hear from the Liberal Party just how terrible Fuelwatch is. The people of Western Australia have had the benefits of Fuelwatch for eight years, and what has the Leader of the Opposition in Western Australia just announced? Fuelwatch is going to stay in Western Australia—no changes at all. They fume and they carry on that Fuelwatch is terrible. Then they get put to the first test by the people and they say, ‘It’s not that bad actually; we’ll keep it, thank you very much, if we’re elected.’ What a bunch of hypocrites! They fume against Fuelwatch and, when they get put to the test by the Australian people, they say it is not that bad and they will keep it.

In relation to the ACCC and the views of those opposite, there is something in all seriousness which concerns me—and I am glad the member for Cowper is in the House. My attention was drawn to some comments by the member for Cowper in the Daily Telegraph on 9 August 2008. In relation to GROCERYchoice he said that it ‘calls into question the competence and integrity of the ACCC’. Can I say that members of the government are fair game—I am fair game; all ministers are fair game. Feel free to criticise us. But for a member of the alternative ministry of Australia to attack the integrity of public servants is quite inappropriate, and he should reflect on that. He should apologise to the over-600 staff of the ACCC. If he does not, the Leader of the Opposition should pull him into line, because he is the alternative minister for consumer affairs. He is the man who, should they be elected, would be partly responsible for the ACCC, and he attacks the credibility and integrity of its 683 staff. He should apologise.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. I claim to have been misrepresented. The minister said that the member for Cowper was questioning their integrity. I also am questioning their integrity—and about 90 per cent of Australia is as well.

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

I make the point that public servants do their job, without fear or favour, for the government of the day, and their integrity should not be questioned by anybody.

In relation to GROCERYchoice, let me use this opportunity to put some things on the record. We have seen 3.3 million hits on the GROCERYchoice website. What does that mean? It means that people are craving more information about grocery prices. One side of the House wants to give people more information and one side of the House wants to take it away. It does not mean that all those responsible for the 3.3 million hits think that the website is perfect and there is enough information on it. I said, on the day that we launched the website, that we want to put more information on it as we go and that this is just the first step. We want to work with consumer groups and retailers to get much more information on it as we go—and that is what we are doing. But one side of the House wants to give people more information and one side of the House wants to take it away. The opposition says that a website giving people information about grocery prices is a waste of time, even though there are 3.3 million hits to show that people are interested in having more information. People want more guidance as to where the cheapest groceries are in their area, and we want to give it to them.

Comments have been made about the Chairman of the ACCC, Mr Samuel. I need to put on the record that the ACCC is not one man; the ACCC is seven commissioners and 683 staff who implement, administer and enforce the Trade Practices Act. They play a very important role. The chair, Mr Samuel, is not somebody who has been associated traditionally with this side of politics. He has been active in politics in the past but not on this side of politics. But he has served the Australian people professionally and appropriately through governments of both sides, and I think that some members opposite resent it. I think some members resent the fact that somebody who has traditionally been associated with Liberal politics feels it appropriate to professionally serve a Labor government and to advise it on how to improve competition in Australia. That seems to drive those opposite crazy—and shame on them. Whether you agree or disagree with him, whether you think he has done a good job or a bad job, he has done the best job he can for the Australian people. He has served the Australian people and promoted competition as best he can and as best the ACCC can. It seems to me that members opposite resent the role that he has played. He continues to argue for improvements to the competition law—improvements that the previous government refused to make for the ACCC.

We take the view that, when the ACCC—the regulator—says, ‘These are the tools that we need to do the job,’ you need to have a very good reason not to give it those tools. You need to have a very good reason to say, ‘No, we’re not going to give you those tools.’ If it calls for the criminalisation of cartels, you should seriously consider it. You should examine the issues and weigh them up, but you need to have a good reason to say no. If it calls for the Trade Practices Act to be strengthened, likewise you should seriously consider it and weigh it up, but you need a good reason to say no. If it calls for something like Fuelwatch, the same process should apply. When it says, ‘We have the closest thing to collusion that we can get in the Australian economy without it being illegal and here’s a mechanism that we think can fix it,’ you need to have very serious reasons for saying no.

The ACCC does not have an easy job in times of heightened inflation. It is very easy to get up and say, ‘Inflation is high and the cost of living is going up; therefore, the competition watchdog is not doing its job.’ We could all say that, but it is not going to help consumers one jot, when around the world you have high inflation, and cabinets and governments grappling with cost of living pressures. When inflation in Australia is at a 16-year high and there are issues around the world in relation to cost of living pressures on families, the job of the ACCC is not an easy one. But we on this side of the House back the regulator to do that job and are giving it the tools it needs to do it.

Members opposite, after 12 years of inaction, can sit around and laugh and mock and say, ‘You’re watching this and you’re watching that and it doesn’t do any good.’ We are in there having a go, while those opposite ignored the problems. We are in there having a go, dealing with competition. We are in there having a go, saying, ‘Well, if we’ve got as close as it can get to collusion while still being legal, we’d better do something about it,’ because we are pro-competition. Competition helps Australian battlers. Consumers benefit from competition, which was ignored by those opposite. (Time expired)

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

I certainly welcome the opportunity to speak on this matter of public importance. The issue of Fuelwatch and GROCERYchoice does raise important questions about the way in which the ACCC has conducted its affairs under the Rudd Labor government. Is it an organisation acting in the public good, or is it acting at the whim of the hollow men who lurk in the backrooms of the Prime Minister’s office? Has the ACCC attempted to provide a quick political fix for the Prime Minister in relation to his promises on fuel prices, grocery prices and the cost of living?

History has shown that the ACCC has spoken out repeatedly against the Fuelwatch scheme. As far back as 2002, Allan Fels, the former Chairman of the ACCC, wrote to the Western Australian state minister expressing his concerns in relation to the Fuelwatch scheme. But with the election of the Rudd Labor government there commenced a miraculous transformation. The ACCC apparently had found its road to Damascus, and that road was going to be financed by the Australian families and battlers who struggle to make ends meet, as they would be the ones who would be paying more for their petrol as a result of Fuelwatch. Forget the fact that Fuelwatch involved price fixing. Forget the fact that the independent sector has been saying repeatedly to the members opposite that Fuelwatch will work against the best interests of independent retailers and that it is competition and not watching fuel prices that will deliver better deals for motorists. The Prime Minister said, ‘Jump,’ and the ACCC said, ‘How high?’

Of course, the members opposite will rally to the defence of the ACCC. They will tell us that the ACCC is independent. They will tell us that the ACCC has been working in the public interest. But let us ask some simple questions. Firstly, if the arguments for the introduction of the Fuelwatch scheme are so compelling, why did the ACCC not include Fuelwatch as its first recommendation in the inquiry into the price of unleaded petrol? In fact, it did not even have Fuelwatch as its last recommendation. The ACCC inquiry into the price of unleaded petrol failed to recommend Fuelwatch at all. Why was that? Did the ACCC forget to put in a recommendation about Fuelwatch? Was it a lapse of memory, perhaps? You would expect to see Fuelwatch figuring prominently in the body of the report. A reasonable person would expect to see a large chapter detailing the benefits of and totally devoted to Fuelwatch, as it forms the basis of the government’s response in relation to fuel prices. But, in fact, when you look at the report, you have to wait until the last chapter to find material on Fuelwatch. It can be found in chapter 15 at 1.3, in the last pages of the report—hardly front and centre.

How then has the ACCC come to recommend Fuelwatch? Where is this new and compelling evidence that has come to hand which can justify this change in position by the ACCC with regard to Fuelwatch? The reality is that there is no such evidence. The modelling conducted by the ACCC has been criticised as being flawed not by members on this side of the House in isolation but by organisations such as Access Economics, Concept Economics, Professor Sinclair Davidson, Professor Frank Zumbo and Professor Don Harding. Professor Harding said of Fuelwatch:

I find that the ACCC applied the wrong tests to the wrong variable. Specifically, they studied the nominal retail margin when economic theory suggests that the analysis of anything but the real retail margin to producers creates a mis-specified model inconsistent with the econometric assumptions used.

Mr Henry Ergas, Chairman of Concept Economics, said in relation to the ACCC modelling—

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

Mr Bowen interjecting

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

I listened to you, as painful as that might be. Mr Ergas said:

I have not come across another instance in Australian public policy since the 1970s where a significant issue such as this has been said to be determined on the basis of modelling and the results of that modelling have not been available to the public.

We also note that the ACCC failed to correct for changes in transport costs over the period. These are likely to have increased prices on the east coast relative to those in Perth. We are surprised that the internal peer review and the peer review by Treasury did not uncover and correct these points.

Given these changes in price structures, we do not see how the ACCC could have objectively concluded that Fuelwatch did not have potential adverse effects, possibly significant for numbers of consumers.

These criticisms are cause for concern. In Senate estimates our good friend Mr Samuel said:

The purpose of the 2007 inquiry was to conduct, as I have described at the time, the most rigorous, the most analytical and the most robust analysis of petrol prices.

Based on the criticism of the econometric analysis of Fuelwatch, there appears to be some significant doubt as to the robustness and the rigour of that modelling. Why did the modelling use a simple average rather than a volumetric average? Why did the modelling ignore transport costs? It is a critical factor in the price of fuel to consumers.

In his introductory letter to the ACCC corporate plan, Mr Samuel stated that ‘the ACCC is guided by five main principles’, one of which is transparency. But there has been no transparency in this process. The ACCC modelling is a black box. This box has been broken open by those such as Professor Harding, Access Economics, Concept Economics and Professor Frank Zumbo. Why did the ACCC go to such lengths to conceal the assumptions which underpin their analysis? What have they got to hide? What happened to the principle of transparency? It is clear for all to see that the position of the ACCC has evolved, as it were, since the report of the inquiry back in December 2007. It would be reasonable to assume that, if the ACCC had failed to recommend Fuelwatch, some new and compelling evidence would have come to light.

In the period since the report was released I have had discussions with Mr Brian Cassidy, who is the CEO of the ACCC. I asked Mr Cassidy, ‘Were the results of analysis done since the report more compelling, less compelling or consistent with the details in the report?’ He replied, ‘They were consistent.’ So we have a report that failed to recommend Fuelwatch, and we have had further work done since the release of the report which is consistent with the work done in that report, but we see a dramatic change in the position of the ACCC. What has caused this dramatic change? What has caused the finding of the ‘Road to Damascus’? Could it be political interference perhaps? One can only speculate. Is it that the hollow men in the back office of Kevin Rudd are alive and well?

In the time I have left I would like to turn my attention to GROCERYchoice where, again, we witness a crisis in confidence with regard to the ACCC. The GROCERYchoice website is supposed to give consumers useful data to inform their purchase decisions, but it is nothing more than high-farce spin and a waste of taxpayers’ money. A report by the National Association of Retail Grocers of Australia is damning of the website. The title of the report is most interesting: ACCC’s GROCERYchoice—flawed concept, flawed model, flawed method, flawed conclusions. I think most consumers would agree that that is a perfect summary. NARGA says of GROCERYchoice:

The ACCC GROCERYchoice survey model is irrelevant and deceptive. It provides consumers with not a single useful fact ...

You would get widespread agreement on that. NARGA says:

It is based on dead, month-old data (two months old by the time the following survey is posted on a website) in an industry where tens of thousands of specials change weekly.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

It concerns the independents as well.

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

It very much concerns the independents. It very much concerns the IGA. I thank the member for Kennedy for his contribution. NARGA go on to say that ‘the ACCC, through GROCERYchoice, are promoting the interests of the German niche retailer, Aldi, and working against those of Australian family grocery businesses’. Fuelwatch and GROCERYchoice are two glaring examples of the Rudd government’s spin over substance. They are prepared to spend taxpayers’ money on a useless website and on a Fuelwatch scheme which will generate higher petrol prices. The government should be condemned for their approach to these consumer issues. The ACCC should be condemned for their stance in supporting this farce. It is certainly a matter of public importance. (Time expired)

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

At the very start, I have to say in passing that I find it quite amusing that the member for Cowper uses a term like ‘quick political fix’. Anything quicker than 12 years is quick! In terms of grocery prices and the general cost of living in this country, the government before us did not do very much. In fact, one could not be blamed for saying they did little, if anything. So, Member for Cowper—a quick political fix? Well, we are quick, if that is the measure that you use. But I digress slightly.

I saw a brief quote from the member for Kennedy today through AAP. Whilst it may not be the full quote, it says:

I officially call today, and I will in the parliament ... for the sacking of Mr Samuel …

He has brought out a report saying there is no problem in Australia, he absolutely knows that food retailing in Australia, 82 per cent of it, is held by two people (Coles and Woolworths).

Mr Samuel has got to go.

I really think it is important in this debate—which I think is a very important debate—on the MPI today, to reflect on what Mr Samuel actually said, in fuller terms than the member for Kennedy’s quote. At the press conference at the release of the report into grocery pricing, Mr Samuel said in part:

Our inquiry found that overall the grocery market is, as the Minister has said, workably competitive. That term is used to describe a market in which competition exists but it is definitely not as competitive as it should be. In a working competitive market there is sufficient competition to protect consumers from monopolistic practises but there is a lack of the type of strong and vigorous competition—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Katter interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Kennedy!

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

that means consumers are getting the best deal possible.

Being workably competitive means that Coles, Woolworths and Metcash have little incentive to destroy the current balance through vigorous price competition. Some of the impediments to more vigorous competition are, first, high barriers to entry due to difficulties new or expanding players have in finding new sites. The behaviour of Coles and Woolworths with their restrictive agreements at shopping centres and gaming of planning objection processes has increased these barriers.

Secondly, we found limited incentives for Coles and Woolworths to alter the existing competitive balance through aggressive price competition.

Finally, we found that there is limited price competition from the independent supermarkets.

All of that led then to recommendations made by Mr Samuel and the ACCC in that report. I will describe three of the recommendations, very quickly. The first one was that we need to do something about planning laws, which the minister has addressed; the second one was in relation to the horticultural code, which has been addressed; and the third one was for the introduction of mandatory unit pricing for all significant supermarkets, which I think has been addressed in passing.

The point that I really want to make is that the report talked about Mr Samuel’s view on what else, beyond those recommendations, has to be done.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Katter interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The Member for Kennedy: no!

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Despite the interjections, I will try really hard to draw attention to those additional pieces of work that he believes need to be done. One was the implementation of creeping acquisition law. I want to talk about that one specifically. Creeping acquisition is the practice whereby one large company buys up its smaller competitors one at a time, thereby surreptitiously, if you like, taking them over. For example, rather than buying a chain of fruit and vegetable stores all at once, it may buy ‘Fred’s Fruit and Vegetables’ one month, ‘Tom’s Fruit and Vegetables’ the next, and so on. It can also be used to lock out competition by buying out a store or a potential site in a particular area at an inflated price, if they are big enough—and they are big enough—in order to stop a competitor from buying out the site.

This brings me to a local issue which I have been involved in and know about and which was the subject of ACCC work during the grocery inquiry process. Just over the border from me, in Queanbeyan—where Woolworths owned a number of supermarkets—a small, insignificant store came up for sale. I think I am correct in saying that the owners of that store made it known to Woolworths that it was going to come onto the market and Woolworths said, ‘No, thank you; we’re not interested.’ So an independent who operates here and in New South Wales said to the owner of that store, ‘I’d like to buy it.’ That would have given them an opportunity to bring in a full-line supermarket in direct competition to Woolworths in a local community. As soon as Woolworths heard about that, they said, ‘Hang on; maybe we’d like it after all.’ The ACCC looked into this and they brought out a press release in June of this year saying that they were in fact going to oppose the proposed acquisition of that supermarket in Queanbeyan by Woolworths. They said:

“The ACCC concluded that the acquisition by Woolworths would be likely to substantially lessen competition in the local retail supermarket market surrounding the store,” ACCC Chairman, Mr Graeme Samuel, said today.

“The ACCC had strong evidence to suggest that in the absence of the acquisition by Woolworths, the supermarket would instead be acquired by an independent operator … which has intentions to expand the supermarket to operate as a full-line supermarket in strong competition with Woolworths and other supermarket operators.  The ACCC found that—

the independent—

supermarkets offer a different proposition to existing operators in the local market …

And so on.

I applaud that decision by the ACCC. It is the sort of work that we should be seeing. While I know that that is not a direct recommendation within the report of the ACCC, when you read the report you will realise very quickly that, whilst also recommending three or more direct actions to government, the ACCC has a very strong interest in looking at other issues—including one of the most important, from my perspective, and that is the creeping acquisition law. It took me a little time to understand what it really meant. It means, as I have outlined, that a big company like Woolworths—Coles could do it as well, but Woolworths seem very good at it—can go in and pick the opposition off one at a time, but they can also try and do what they tried to do in Queanbeyan, and that is to find a site that is up for sale and buy it only because they know that someone else wants it, that someone else is not Coles and they want to come in in competition. So, when we are criticising the ACCC and the process, I think we need to slow down and have a very careful look at what the ACCC actually have in their target sight. I am going to applaud them every time I know that they are trying to stop this type of behaviour.

I can also talk about a small greengrocer in my electorate. A few short years ago, but in the life of the previous government, he had a greengrocer shop in a small local group centre which he operated across the corridor from Woolworths—how dare he! Woolworths used to send their staff out a few times a day to note down the prices this bloke was selling his goods for and Woolworths would then mark their goods down below his prices. It drove him out of business. A TV current affairs program put that story to air but it did not save him. He was put out of business. I am very pleased that there is now concentrated interest in this area. This little bloke is now back in the same shop—though twice the size—knowing that he can get protection from that sort of behaviour, that Woolworths cannot do that to him again and get away with it. A lot of us now shop there and he has a very strong customer base. If you look at that Woolworths store, very rarely will you see people walking out with lettuces and celery; they buy those things from him. They feel very strongly about the fact that the little bloke is having a go. He is not even a supermarket; he is just a greengrocer.

In conclusion, can I say I appreciate very much the passion displayed by the member for Kennedy and I appreciate very much the argument he has put on behalf of the primary producer. I understand that argument; we all do. However, in this discussion and in this argument, it is really important that we do not lose perspective in what this government actually want the ACCC to do. We should stand with them and support them and give them all the power they need to carry out the sort of work that I know we all believe they should be able to do.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Firstly, I congratulate the member for Kennedy and agree with the member for Canberra in appreciating the passion he has displayed on this issue. The member for Canberra mentioned at the end of her speech something to do with primary production and those who produce the food. The Minister for Competition Policy and Consumer Affairs and many others have talked about the consumer of the food. One of the underlying problems in the area of competition is that the argument is about the consumer, not about whether the food can be produced at a competitive price. It is very much aimed at the consumer.

Members might remember that, when Telstra was sold, competition was going to deliver into the smaller ends of the market—that competition would provide. Public ownership was not required; competition would provide in rural areas. That is not happening. The weakness of the ACCC, in my view, and the problem with national competition policy and the way those words are thrown around is that competition does not provide in the smaller markets because of the size of Australia. Competition did not provide when our region wanted a gas pipeline because there was only one person that wanted to provide it. There were no competitors. Telstra tells us now that some parts of the market are not viable, so it will not provide a service. Competition was going to provide. It is all very well for the current government to blame it on the former government and say, ‘They said that, they did that; therefore nothing happens.’ Competition was the way in which that was driven.

One of the things that I think the government needs to look at very closely is the confidence people have in some of these so-called independent bodies. In rural Australia there is very little confidence, whether it be in the horticultural area, the grain production area or the fuel production area. The minister himself talked about collusion in the fuel area. Of course there is collusion in the fuel area. Has the ACCC been able to prove that? Has it been able to do that within its ambit? Everybody including the minister says that there is a degree of collusion.

But, when agriculture wants to value add to a product, in a sense, by moving into the biofuels area, this government is very quiet and the previous government was very quiet. They are very quiet on access to the marketplace and those who control the bowsers. The fuel companies just turn their backs and do not allow entry into the marketplace. That is where competition should start. Instead of farmers being captive in the way that they are now, not only domestically but globally, farmers should be able to move into value-adding markets. What saved the sugar industry on the sugar coast had nothing to do with the ACCC and nothing to do with domestic arrangements; it had a lot to do with Brazil moving into biofuels. The same is happening with biofuels in the grains sector. Biofuels are helping to drive up prices and at least give some profit margin to the farm sector.

What is the government doing? Very little. It supports renewable fuels but does not do a lot about them. Let us hope the wind and the sun can assist them. The government does not do much to encourage biofuels. It runs off this other gambit, saying, ‘We’ve got to be the food bowl for the world; there are millions of starving people who have to be fed by our farmers.’ There are 100 million acres in the Sudan. It can produce six times that which Australia can produce. Sudan has magnificent soils, yet its people are starving. And we are withdrawing support in terms of teaching them how to grow food using the new technological systems that can help them solve their problems.

Then we move into the carbon debate. We are still going to shuffle all this food all over the world, bring other fossil fuels back and have all these carbon footprints. This is the hypocrisy of policy that is going on at the moment—and I am not just saying that in terms of the current government. There are mixed messages out there. Do we want food? Do we want people to make a profit from growing food? Or do we want the consumer to have the food for nothing so that ‘grocery watch’ will work? Do we want a smaller carbon footprint? If so, why would we be sending this food overseas when we can produce our own energy from it which is renewable and has a smaller carbon footprint? No wonder the farm sector and others are confused about the emissions trading arrangements. And then we return to a very simplistic debate about ‘competition will provide’. It has not provided for the little people in the past and it will not now. (Time expired)

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

I have listened with great interest to this matter of public importance debate and to the contributions. Whilst I think the intentions of the member for Kennedy are well conceived, I do not believe that the assault upon the ACCC is the best way to improve the rights of the consumer. In fact, the best improvement that has happened for the rights of consumers—be they small farmers, consumers or people who have to deal in the grocery industry—happened on 24 November with the election of the Rudd Labor government.

The previous government—and I will not labour their failures too much because they are well recorded—were anti consumer, anti worker and anti farmer. The National Party are collaborationists with their city based Liberal friends, and in Queensland, in fact, they are now the Liberal Party or the National Party; I get confused. It has been left to the member for New England and the member for Kennedy to at least fly the flag for the constituency and the way they see it. I will watch with interest if Mr Oakeshott is successful in Lyne. Perhaps then there will be further, more independent voices in the bush, as opposed to the Liberal-National Party—the National Party of course being the Liberal embassy or branch office in the bush.

I will return to what I think is the key focus in this debate: the adequacy of the ACCC. I think that we need to understand and use as the key debating point in this issue of assessing the adequacy of the ACCC their most recent report into the competitiveness of retail prices for standard groceries. In fact, the report revealed—and it did reveal this, despite perhaps some of the sound and fury of the address of the very impassioned member for Kennedy—that there is real reform to be had in Australia’s grocery sector. The report found that grocery retailing is ‘workably competitive’, but it also highlighted a number of factors that currently limit the level of competition, including the complexity of planning applications, which provide the opportunity for Coles and Woolworths to ‘game’ the planning system to delay or prevent potential competitors entering local areas. According to the report the biggest impediments to improved competition include the high barriers to entry for large supermarkets, a lack of incentives for the major supermarkets to compete strongly on price and the limited price competition from independent retailers.

The Rudd government, the consumer’s best friend, ably led in this area by the Assistant Treasurer in advancing these reforms, is going to move in the following areas as a matter of urgency. It is going to refer the anticompetitive impacts of state and local zoning and planning laws to the Council of Australian Governments. One may ask: why didn’t the previous government act in its 12 years? Furthermore, the Rudd government is going to consider the best way to introduce a mandatory, nationally consistent, unit-pricing regime. Issues such as the product range that is captured and store size will need to be worked through in consultation with industry to ensure compliance costs are kept to a minimum. Unit pricing has proven to be a transparent and popular tool for overseas consumers, and one has to ask the question: why did the political party of noddies—I of course refer to the former government—fail to look at this issue?

Most importantly for the interests of the member for Kennedy and the member for New England and indeed all of the members of the government is that the Minister for Agriculture, Fisheries and Forestry will work together with the horticultural industry through the Horticulture Code Committee to carefully consider the ACCC’s 13 recommendations to enhance the operation of the Horticultural Code of Conduct. This hopefully will improve the regulation of trade in horticultural produce between growers and traders and provide dispute resolution procedures, which are very important. Indeed, the member for Kennedy will recollect that in my previous life both he and I appeared on platforms to try and confound and push the previous government to stand up for the small growers.

The government will implement a law on creeping acquisition, releasing a discussion paper by the end of the month to gauge the best way forward. The matter of public importance perhaps does not capture that the interests of the consumer have been advanced by the Rudd government very strongly, working with the ACCC, and in fact we have even picked some of the low-hanging fruit—to conclude my contribution in a vaguely orchard-like manner. At least this government has a Minister for Competition Policy and Consumer Affairs, an accomplishment which the previous government could not seem to get around to in their 12 years. (Time expired)

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

Order! The discussion has concluded.