Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

The cost of living is dominating political discourse, and while cost-of-living increases can in part be attributed to inflation and global instability, the more likely cause has been price-gouging and profiteering by goods and service providers, with the COVID pandemic four years ago kickstarting much of that. The shutdowns during the COVID years had a dual effect on today's living-cost pressures. Firstly, the shortage of goods and services saw demand outstrip supply, which directly led to price hikes across so many lines. When supplies normalised and demand moderated, prices never fully reverted to their pre-COVID levels. Secondly, businesses' income losses caused by COVID restrictions are now being made up for with widespread price-gouging.

Nor is it just the major food and grocery retailers—whom the spotlight is currently on—that engage in price-gouging. It is happening widely by providers of so many essential daily services and goods. We see petrol prices fluctuate by up to 50 cents per litre, and they're always higher just before public and school holidays. Major sporting and entertainment venues price gouge, sometimes near-doubling of the prices of basic foods and drinks. Airlines are doubling the price of airfares for peak-time flights. For example, a Qantas economy seat one-way on the direct flight from Canberra to Adelaide on the Thursday before Easter is $981. Tradespeople exploit trade shortages and overcharge simply because they can, and CBD parking fees often cost more than the entrance cost to the event people are going to. Medical gap fees are charged by wealthy specialist doctors, who apply a 'take it or leave it' attitude to desperate people. Energy prices are in a convoluted market, where it is difficult—if not impossible—to pinpoint blame. Insurance premiums have surged over recent times beyond what may have been necessary to offset costs from natural disasters and higher repair and replacement costs. We even see unreasonable fines and fees charged by all three levels of government, who have a complete monopoly over what they do. I note today's AdelaideAdvertiser front page suggests that Adelaide City Council residents and businesses are facing rate hikes of up to 7.4 per cent in addition to increases in fees and charges.

With a push towards a cashless society, there is also a growing trend of credit card surcharges being applied and adding to daily household costs. For anyone with a bank loan or a credit card debt, the interest rates are always much higher than the Reserve Bank rate. These are all examples of common costs that most people are faced with in their lives and which so many are struggling to meet.

Meanwhile, many of the providers of those services and goods are making record profits. It has been reported that between April and September 2023 corporate profits drove 53 per cent of inflation. Not surprisingly, the CBA announced a record $10.2 billion four-year profit in August last year, and in the first half of this year a $5 billion cash profit. The other three major banks showed similar trends.

Looking at other corporates, Qantas in 2023 made a statutory after-tax profit of $1.74 billion. AGL, for the six months ending 2023, made an underlying net tax profit of $339 million. Last year, IAG reported a net after-tax profit of $832 million, and Telstra's $2.1 billion profit was up 13 per cent. There are other examples I could point to which show the same pattern of businesses providing essential services making healthy profits while customers—the Australian people—struggle with living costs. Regrettably, in Australia price gouging is not illegal. We operate in a free-market society where free marketeers claim that market competition will drive prices down. Of course, we know that that is not, and never has been, the case.

In response to similar concerns 50 years ago, the Whitlam government established a prices justification tribunal, but subsequent governments abolished it. Right now, such a body or something similar is sorely needed so that consumers are not exploited and taxpayers do not have to provide cost-of-living relief to their fellow Australians whilst big corporates make big profits.