Max Chandler-Mather (Griffith, Australian Greens) Share this | Link to this | Hansard source

I move that so much of standing orders be suspended as would prevent the member for Griffith from moving the following motion:

That this House:

(1) notes that:

(a) too many people are struggling to afford to feed themselves and their families, while Coles and Woolworths are price gouging to make billion dollar profits;

(b) last week, CHOICE released a report that confirms what Australian shoppers already know: they are being price gouged by the supermarket duopoly, and there is not enough competition in the supermarket sector;

(c) the Greens-led Senate inquiry into supermarket prices made a number of recommendations including making price-gouging illegal, but the Government is only choosing to implement one of those recommendations—a mandatory Grocery Code of Conduct—that affects suppliers but will do nothing to bring down the cost of food for shoppers;

(d) the Albanese Labor Government has failed to take any action that would bring down the cost of food and groceries;

(e) the Chair of the ACCC has confirmed that if divestiture powers were introduced they could increase competition in the supermarket sector and under economic analysis, this would bring down the cost of grocery prices; and

(2) calls on the Government to stop offering Band-Aid answers to the big crises facing people, and implement all the recommendations of the Greens-led Senate inquiry into supermarket prices, including making price gouging illegal, and supporting the Australian Greens' Competition and Consumer Amendment (Divestiture Powers) Bill to introduce powers to break up the supermarket duopoly, which would lower the cost of food and groceries

This is a cost-of-living crisis and the government has to make a choice between backing ordinary Australians getting screwed over by the supermarkets or the supermarket duopoly—Coles and Woolworths—making billions of dollars of profits off people's misery. We know right now that this Labor government is choosing Coles and Woolworths. Oxfam reported that in 2022 alone Woolworths made $5 billion in crisis profits—that is, profits off the crisis going on at the moment—price gouging ordinary Australians and forcing them to choose, make awful choices, between paying the rent, feeding their kids, cutting back on grocery bills and skipping meals just so their kids can afford to eat.

In fact, just this week I spoke to a pensioner using our free food community pantry who told me her rent had just gone up $150 a week. As a result, she could no longer afford to shop at the local Coles and Woolworths. She was being forced to make tough choices. A pensioner who had worked hard all her life is now getting screwed over by a system that always puts the interests of big corporations like Coles and Woolworths ahead of ordinary people.

The reality is there are things the government could do right now. This is urgent because the government could take actions right now the tackle the power of Coles and Woolworths. We know Coles and Woolworths have 65 per cent of the supermarket share in Australia right now, and they use that power to drive up prices and screw over ordinary Australians. There are recommendations from the Greens led Senate inquiry that would tackle this issue in two important ways. First is making price gouging illegal. None of the recommendations Labor has agreed to make price gouging illegal. It is perfectly legal right now for Coles and Woolworths to continue to price gouge ordinary Australians and use their awesome and huge market power to screw over ordinary people. Second is giving the ACCC the power to go and break up Coles' and Woolworths' market share. We know that in the United States, the UK and countries around the world, their supermarket profit shares are much smaller; in fact, Coles and Woolworths have the large profit margins of any comparable supermarkets in the developed world. They do so because they have a huge market share they can use to screw over ordinary Australians.

If we give the ACCC the power to break up Coles and Woolworths, reduce their market share, increase competition and drive down prices, that will help ordinary Australians. But the Labor government have refused to do any of that. Now they have agreed to enforce the code of conduct between suppliers and supermarkets. That is good, but the problem is they've done nothing to touch the huge profit margins Coles and Woolworths are making. Not only that; while they are making these huge crisis profits, Labor refuses to even tax them fairly so we can raise money off Coles and Woolworths and use that to go and help people struggling with the cost of living. They basically get massive crisis profits, pay barely any tax on those excess profits and don't have to reduce their market share like supermarkets around the world, and it's perfectly legal for them to continue to price gouge ordinary Australians. People are getting fed up with a Labor government that continues to tinker around the edges of a massive cost-of-living crisis and refuses to do anything substantial to tackle the structural issues in our economy and political system that allow big corporations to screw over ordinary Australians.

That same Oxfam report found something pretty remarkable—that the share of national income going to corporate profits had reached a record high in Australian history. At exactly the same time we hear about this cost-of-living and inflation crisis, the government seem to have decided they're going to let the RBA jack up interest rates and punish ordinary mortgage holders and renters for a crisis they had nothing to do with. We know who is causing this crisis—big corporations who, under previous Labor and Liberal governments, have accrued enormous power and are using that power right now to drive up prices—particularly Coles and Woolworths—and screw over ordinary Australians. They are Chevron, Exxon Mobil, big oil and gas corporations, Coles and Woolworths and the big banks. Just last year Commonwealth Bank recorded a record $10 billion profit. Across the board big corporations are screwing over mortgage holders, people trying to go to the supermarkets, renters and people trying to make ends meet, but at the same time those big corporations are making massive profits.

Let's be clear about the human consequences of this. I remember chatting to a renter who was having to cut back on meals for herself just so she could afford her baby's nappy rash cream. I have been chatting to pensioners having to make tough choices and single mums skipping meals so their kids can afford to eat. This should not happen in a wealthy country like Australia. It is particularly deeply frustrating when we know, at the same time, that the government has the power to tackle this.

The Prime Minister made these absurd comparisons to the Soviet Union when the Greens proposed rules and laws that exist in the United States. I would be surprised if anyone was going to make a comparison between the United States and the Soviet Union. It would be laughable if the consequences were not so serious. Time and again the government and the Prime Minister seem more interested in making silly, stupid jokes than in treating their roles with the seriousness with which they should treat them and recognising that they are in government. How is it that they can continue to pretend they don't have the power to do these things? All of a sudden they're the government and they are the ones with the power, but they keep pretending all they can do is say nice words and tell people they feel their pain. It is all hypocritical and all useless if they don't take action to help people.

Today we are suspending standing orders because there is an urgent crisis going on right now, and there are practical things the government could do to take on the power of Coles and Woolworths. The fundamental choice this Labor government has to make is whether it chooses ordinary Australians doing it tough or the massive supermarkets, the Coles and the Woolworths, screwing over ordinary Australians.

Here are the three things you could do right now: support the Greens bill in the Senate to allow the government and the ACCC to break up the market share of Coles and Woolworths, make price gouging illegal, and give the ACCC the power to take Coles and Woolworths to court where they are caught price gouging ordinary Australians. Introduce a super profits tax on Coles, Woolworths and all the other big corporations screwing over ordinary people. Raise billions of dollars and use that to help ordinary Australians doing it tough.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I second the motion. It is critical that this parliament and politicians take action today, because right now there will be people going to the checkout at Coles and Woolies and putting items aside because they can't afford them. There will be people skipping meals because rent has soared on average $100 and mortgages about $200 a week under this Labor government. They are now putting items back onto the shelf and skipping meals because they can't afford to do everything, because we are in a cost-of-living crisis. This is happening at the same time as these supermarkets, Coles and Woolies, are raking in billions of dollars of profits, and they're price gouging.

As the consumer organisation Choice has made very clear, when you go to Coles or Woolies, there's almost no difference in price at the end of the day. But, in many places around this country, that's the only choice that you've got. And we've got one of the most concentrated supermarket sectors in the world, which means these massive corporations have huge amounts of power to set the price wherever they want and to price gouge. In the face of that, the government could do something.

The government could take on these big corporations, make price gouging illegal, and say, 'Enough of your profiteering in a cost-of-living crisis; we are going to back people.' But, instead, the government comes up today with an announcement that effectively says they're going to back Coles and Woolies. All the government will do is ask Coles and Woolies to sign up to a code they've already agreed to sign up to. Meanwhile, under Labor, price gouging remains perfect legal. Coles and Woolies can make billions of dollars of profit, and it is perfectly legal.

People are getting sick of governments making press statements and announcements that on the surface appear to be tackling the cost-of-living problems. But then, when you actually look at it, you realise they do nothing to tackle the systemic crises that we're facing. People are sick of these bandaid answers to real structural crises that we are facing. People are sick of seeing Labor tinker around the edges when they know that, when they turn up next week, even after this code has been implemented, the prices will still be exactly the same.

The Greens put the price gouging of the supermarkets and their profiteering onto the agenda, and the Greens-led Senate inquiry said that there are a number of things that we need to do. This was one of them, but you've got to do the other things as well. Otherwise, the supermarkets will keep price gouging. You have to do what other countries around the world have done, which is to say to Coles, Woolies and the big supermarkets, 'If you keep abusing people and abusing your market power, we're going to break you up.' It's time to break up the big supermarkets, stop their price gouging and make price gouging illegal. But, to do that, you need to put some teeth into our laws—not make the supermarkets sign up to a code of conduct they've already agreed to sign up to anyway.

At the end of the day, this place has a choice. The politicians in government need to decide: are they going to back the public interest, or are they going to back vested interests and corporate interests? The Prime Minister and those in government are all too happy to get their photos taken standing next to these big supermarket chains, use them for photo ops, have them at their fundraisers and take donations. But, when asked to make price gouging or profiteering illegal, they won't do it. Labor is letting Coles and Woolies continue price gouging and make massive profits. Labor does not tax them fairly.

As a result, people are suffering. If Labor think that their announcement today to do something that the supermarkets had already agreed to do anyway is going to satisfy people who are struggling to make their groceries add up—at the same time as paying their mortgage or rent or thinking about how they're going to put braces on their kids, because Labor won't put dental into Medicare—then they've got another think coming. People know the system is broken at the moment. It is certainly working for the supermarkets. It's certainly working for Coles. The system is working for Coles. The system is working for Woolies. The system is working for Labor, for Liberals, for politicians, but it is not working for the people. This place needs to make price gouging illegal. We need to stop the profiteering and we need to do it today.

Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

Australia's supermarket sector is among the most concentrated in the world. Woolworths, Coles and Aldi between them have a market share of 75 per cent. That is a considerably higher market share that in many other advanced countries and it warrants appropriate scrutiny. That's why, for this government, scrutiny of the supermarket sector has been such a high priority.

Last week, I announced the first results of the CHOICE quarterly price-monitoring exercise. The federal government has funded CHOICE, to the tune of $1.1 million, to carry out quarterly price monitoring in every state and territory. That revealed significant price differences—differences across jurisdictions, differences between supermarkets. It showed that in the two jurisdictions where Aldi doesn't operate, in Tasmania and the Northern Territory, shoppers are paying higher prices for groceries. And it showed the magnitude of the gaps between the different supermarkets. That's tangible information in the hands of consumers, which wouldn't have been there were it not for this government.

We've also announced an Australian Competition and Consumer Commission inquiry into the supermarkets, looking at issues such as loyalty card discounts in order to ensure that shoppers get the best deal. We understand that one of the big impacts of concentration can be on consumers, and so this ACCC deep dive, the interim results of which will be reported in August, is a part of what we're doing to ensure that shoppers get a fair deal.

One of the big stories we've heard is the impact on suppliers. In economic jargon we know that large firms can exercise monopoly power on their consumers, but we also know they can exercise monopsony power on their suppliers. As one farmer said of the grocery majors: 'We're at the mercy of them. We're price takers.' We've heard too many troubling tales about suppliers to the major supermarkets not getting a fair crack, about those suppliers being unwilling to make complaints because of a fear of reprisals.

Under the former government, the Food and Grocery Code of Conduct was set up as a voluntary code, without appropriate penalties. We've had the Leader of the Nationals out there this morning saying: 'Dearie, dearie me! Why didn't the government move to make it mandatory?' Well, we have. We've done what they failed to do in nine long years in government. Not only did they set it up as a voluntary code, they held a review and the former government decided, after their review, that it should continue to be a voluntary code. That changes today.

Alongside the minister for agriculture, Senator Watt, and Craig Emerson, we stood at the Dickson shops this morning—it was minus two degrees, a beautiful Canberra morning—to announce that the Food and Grocery Code of Conduct would be made mandatory. That follows an extensive review by Craig Emerson, one of Australia's best policy economists, who engaged in 65 bilateral meetings, four round tables, accepted 68 submissions and ultimately made 11 recommendations, which the Australian government will accept. The most important of those is that the food and grocery code be made mandatory.

But it also talks about the scope of that Food and Grocery Code of Conduct. Right now it covers Woolworths, with an estimated 2024 revenue of $50 billion; Coles, with an estimated 2024 revenue of $38 billion; Aldi, with an estimated 2024 revenue of $11 billion; and Metcash, an estimated 2024 revenue of $9 billion. It will probably soon apply to Costco, with an estimated revenue this year of $4.6 billion, not far shy of the $5 billion threshold.

The Emerson review also recommended the code place greater emphasis on addressing the fear of retribution by including protection against retribution in the purpose of the code, and by requiring that any incentive schemes and payments that apply to a supermarket's buying teams and category managers are consistent with the purpose of the code. Another recommendation of the Emerson review is that an anonymous complaints mechanism be established to enable suppliers and any other market participants to raise issues directly with the ACCC. The Emerson review recommended, and the government has accepted, that the code should provide parties with avenues for mediation and arbitration to resolve disputes.

What's important about the work that Dr Emerson did is that the government does not have constitutional authority to mandate mediation. And Dr Emerson engaged directly with Woolworths, Coles, Aldi and Metcash, who have all agreed in principle to be bound by a decision of their code mediator to award compensation of up to $5 million where agreed by a supplier. The review recommends a code supervisor who produces annual reports on disputes and the results of the confidential supplier survey. And it recommends particular remedies to address issues relating to fresh produce such that grocery supply agreements include the basis for determining prices and that fresh produce standards and specifications be reasonable. Under the code, the maximum penalties become the highest of any industry code: the greatest of $10 million or three times the benefit from the contravening conduct, or, if you can't determine the benefit, 10 per cent of turnover in the preceding 12 months. This is a code with teeth. Alongside this, the government will continue to focus on issues affecting suppliers through the ACCC inquiry.

And now we've had the Nationals and the Greens teaming up in an unusual left-right dance, to suggest that there should be divestiture powers. As Dr Emerson said in our press conference this morning, having looked carefully at the issue, 'Divestiture powers are not a credible threat.' The Leader of the Australian Greens has said it's time to break up the big supermarkets. This, coming from the leader of the Greens, is a bit like the message we had from the Leader of the Opposition in the lead-up to Australia Day, that Australians should boycott Woolworths. What both of them forget is that Woolworths is Australia's largest private sector employer. It employs around 200,000 Australians. And those people's jobs would be in jeopardy if this reckless plan were pursued.

The last three major competition reviews, the Harper review, the Dawson review and the Hilmer review all rejected divestiture powers. The National Farmers' Federation are opposed to divestiture; the ACTU has rejected divestiture; and a Senate Economics Legislation Committee in 2015 found:

Evidence has not demonstrated that the potential advantages of such a power would outweigh the likely disadvantages.

And:

The committee is concerned that court-ordered divestiture would risk significant disruption and economic damage, with unpredictable consequences for competition.

The fact is that the government is focused on solutions which will deliver a fair deal for families and a fair deal for farmers. We are concentrating on getting price information into the hand of consumers. We're focused on resetting the relationship between farmers, suppliers and the big supermarkets. We recognise the market power concerns, and our focus within the competition portfolio is squarely on the cost of living. That's why we have announced the biggest shake-up of Australia's merger laws in half a century. It's why we've announced that we're focusing on the issue of non-compete clauses, which constraint one in five Australian workers from moving to a better job. It's why we're revitalising the National Competition Policy, which, over the course of the 1990s, delivered some $5,000 a year to the typical Australian household through practical, sensible competition reforms.

We on this side of the House understand that the last couple of decades for Australia have seen an increase in market concentration and seen an increase in mark-ups. We've seen a decline in job-switching and seen a fall in the creation rate of employing start-up firms. We recognise that the decade in which the coalition was in office was one of the worst periods of productivity growth in the post-war era, and a lack of focus on competition may well be one of the issues behind that. We are focused on ensuring that the Australian economy becomes more competitive and more dynamic—a message which came out strongly from the House Economics Committee report, chaired so ably by the member for Fraser, Daniel Mulino. That report made a series of recommendations—not including divestiture, I must add—which will focus on ensuring that we get a more competitive and dynamic economy. Competition means better prices for consumers, better wages for workers, a better deal for farmers and a more dynamic, productive Australian economy. That is what this government is focused on.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question is that the motion be agreed to.