David Littleproud (Maranoa, National Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

It gives me great pleasure to introduce this bill, in conjunction with the bill the member for Hume has just introduced around divestiture powers—divestiture powers that this country already has. In fact, they were voted for in this parliament in 2019. Both sides of parliament saw the need in the energy sector to make sure that consumers were protected. We kept the lights on, but tonight there will be Australians who will not be able to put food on their table. The cost-of-living crisis that's been created in this place is one where we will see—we produce enough food and fibre for 80 million people in a country as rich as this nation of ours—Australians going without dinner tonight. Why wouldn't we do everything we can in this place, with the privilege that we have been given, to make sure that we put the regulatory frameworks around the most important commodity that we need to underpin all life—our food.

This is a missed opportunity by this government not just to face up to divestiture powers. They were prepared to stand up to the big CEOs of the energy companies in 2019, but, today, in the middle of a cost-of-living crisis, they've gone missing and are not prepared to stand up to Woolworths and Coles to simply say that there needs to be a deterrent to protect both farmers, as suppliers, and consumers.

This is about fairness and transparency. This isn't about fixing prices. This is simply saying that if there is a rise in the farmgate price then you should see a commensurate rise at the check-out. If there is a reduction at the farm gate in price, you should see a commensurate reduction at the check-out. It is clear that the supermarkets have played on the ignorance of many Australians who don't understand why those farm price reductions or increases happen at the time in which they happen. They've taken advantage of the farmer and the consumer, so it's important that when there is market concentration to the extent that we see here in our grocery sector that governments reach in and put in deterrents. That big deterrent, as the member for Hume has just articulated, is one that has safeguards but sends a strong message. But we don't ever want to have to use divestiture powers. That's the whole idea of it. It's about setting that standard and setting a deterrent that makes sure that those supermarkets respect their actual market power. What we need to do is increase the scale of penalties leading up to that big penalty.

What we did in a trajectory as a coalition in the last term was introduce a perishable goods inquiry from the ACCC. The ACCC at that point did not ask us to change anything in the grocery code nor in terms of divestiture powers. Subsequent to that, the evidence that we have seen and the fact that the ACCC are now in court with the two supermarkets demonstrates there is growing evidence of their behaviour and abuse of their market power and that we should do something.

We wrote to the then government after the last election, building on that work that we'd done through the perishable goods inquiry and seeing the mounting evidence that we should do more. In fact, in December 2022 I wrote to competition minister in a bipartisan way, knowing the cost-of-living pressures that were out there, to say that he should bring forward the statutory review of the grocery code of conduct from October last year to straightaway and that we would give bipartisan support for increasing penalties and making it mandatory. We make that offer to this government and they ignored it. It wasn't until we got closer to the October date and the government had done nothing, and the cost-of-living crisis was continuing to hit, that they realised that this was hurting them politically because they'd done nothing. They didn't get this up and going until January.

The reality is they have implemented changes in legislation that will not come into effect until April 2025. The penalty increases and the mandatory nature of the code that this government moved in this House only a matter of months ago do not come into effect until April 2025. There is a cost-of-living crisis today. There are Australians tonight who will not eat, yet this government does not want to put a regulatory framework around supermarkets who control nearly 70 per cent of our grocery sector. How out of touch can you be to not understand the pain and the hurt of proud families who are struggling to pay their mortgage and who cannot look their kids in the eye and tell them they can put dinner on the table tonight, in a country as rich as this, in the privilege that we've been given to stand in this place and do something about it?

The mandatory code and the legislation that we bring in today would be enacted today if they took our hand and we put it through the other place. We'd get royal assent, and it would start today—not in six months time—because those families deserve support today. What we've said is: let's look at this in a sensible way of changing culture because while divestiture power is the big stick at the end of it, you actually have to have scaling penalties that change the culture of these organisations. There need to be infringement notices that are speeding tickets the ACCC can hand out to the supermarkets when they're in breach of the codes. They can simply say, 'You have breached the code, and it is a flat $2 million.' That's about change in culture. Every time the ACCC, as the tough top cop on the beat and has the powers to implement it, undertakes it immediately, hands over that $2 million fine. That changes culture.

In contrast, those opposite, whose bill does not come into effect until April 2025, have, to their credit, put in infringement notices. But they scale up to a maximum of $187,800. They would go to one of their tills here in Canberra and pull that out as petty cash as the cost of doing business. This is not something that scares supermarkets in any way, shape or form. For $187,800, they'd probably pay the maximum and not worry about it. Why wouldn't we give the ACCC the tools they want?

As the member for Hume just articulated, the ACCC chair said that the penalty should be greater than just the cost of doing business—$187,800 is the cost of doing business; $2 million starts to change culture. That $2 million starts to change the culture, from the CEO right through to those buying the produce from the farmer all the way through. We've said that we'll scale it up to $10 million, or 3 per cent of the financial gain of these companies, but that would be determined by a court. The ACCC would only go to court if they knew they had the ability to achieve a penalty greater than $1 million, which, if you look at the government's legislation, is where most of the infringements would land. So why would the ACCC spend millions of dollars to go to court only to get an outcome of a $1 million fine? And only in rarer cases, they get $10 million in fines. We've said that, and then there's more scaling through to divestiture.

There is another significant piece we are bringing in that will complement this bill. It's called a supermarket commissioner. We have heard inquiry after inquiry of farmers coming forward about the mistreatment of these two supermarkets that control the market. They are the market. They have abused that power to destroy lives. I have seen that personally as an agribusiness banker in western Queensland. I'm not a top-end banker. I sat down around kitchen tables and saw the egregious conduct of these supermarkets and how they treat family farms, how they abuse that power and then destroy that farm. These farmers have come forward confidentially on numerous occasions to try to give evidence about what these supermarkets do, but many farmers are not game because they fear retribution. They fear their supply contracts being taken away, so they say nothing, and nothing gets done in this place.

We have created a supermarket commissioner so that they can bring their complaint forward in a confidential manner. The supermarket commissioner can triage it and understand whether they have a case. If the commissioner believes they have a case, the commissioner will take one of two actions. It will say to the complainant, 'We can conciliate this with the supermarkets, but if you feel there is retribution, we will escalate it to the ACCC.' Under the ACCC's powers, they will open up broader investigatory undertakings, not just of the individual but of broader individuals, so that the confidentiality of those individuals is maintained and that the ACCC can then make their decisions and use the infringement notice or take it court.

This is a sensible framework that puts sunshine on the behaviour of these supermarkets. They have done to so many consumers what they have done to farmers. If these supermarkets have done nothing wrong and are as pure as the driven snow, as they keep telling us, they have nothing to fear. This is the exact framework that sits at the moment. There are just higher penalties as a deterrent. What do those opposite have to lose? What are they hiding behind? Please—we have a responsibility to get this right. Here is your opportunity. This is your moment. Where are you going to stand?

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Kevin Hogan (Page, National Party, Shadow Minister for Trade and Tourism) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.