Barbara Pocock (SA, Australian Greens) Share this | Hansard source

I rise to speak to the Competition and Consumer Amendment (Fair Go for Consumers and Small Business) Bill 2024. Look around us: Australia is in a cost-of-living crisis. We heard last week that affordable housing is beyond the reach of people in all of our capital cities. We've heard in the supermarket prices inquiry that 88 per cent of people in Australia are worried about the cost of food and groceries. Food and housing are essential goods. We cannot live without them. The cost-of-living crisis is pushing millions of people into poverty. It's causing untold harm and suffering in our society. It's making people homeless and causing people to be trapped in debt. Big corporations are fuelling the cost-of-living crisis. Coles and Woolies are driving up the cost of food, and banks are reaping massive profits through making people pay more and more on their home loans. Energy companies are making huge profits on higher and higher energy bills, and in this context Australians would expect their government to be actively working towards relieving pressure and directly bringing the cost of living down. Instead we get this bill that just tinkers around the edges.

Labor's plan to tackle the cost-of-living crisis is just not up to the task. What the government could be doing right now to help Australians with the cost of living is supporting the Greens' Competition and Consumer Amendment (Divestiture Powers) Bill 2024. This bill would give the ACCC powers to break up big companies like Coles and Woolworths if they're found to have misused their market power. The Greens will always back people over corporations. We need to give our courts and competition regulators the power to smash the supermarket duopoly and other price-gouging corporations across the economy.

The Australian economy lacks competition, and the problem is getting worse. Nowhere is the issue of lack of competition more stark than in the supermarket sector, with Coles and Woolworths engaged in a duopoly that holds a massive 65 per cent of the market share. According to former ACCC chair Professor Allan Fels, Australia's grocery sector is amongst the most concentrated in the world. It's more concentrated than in comparable countries, including the UK, Germany and the US. It's clear that greater competition reduces supermarket profits. At its most recent full-year results, Coles posted $1.1 billion as its full-year profit, while Woolworths lifted its annual profit to $1.6 billion. Professor Fels has found that high market concentration has resulted in supermarket profits that are higher than they would be in a competitive market.

Market concentration impedes competition and is a massive drain on the economy as a whole. It reduces productivity growth, it slows innovation, it impacts on the quality of products available and it leads to higher inflation through excessive prices. Monopolies and oligopolies are bad for consumers, they're bad for workers, they're bad for suppliers and they're bad for the economy more broadly.

When a corporation has an excessive share of the market, they can abuse their power in four different ways. Firstly, they can hike prices for consumers well above what they need to cover costs. Secondly, they can force suppliers to reduce their prices but pocket the difference instead of passing it on to consumers. Thirdly, they can squeeze shop floor workers with increasingly poor wages and conditions while executives and major shareholders line their pockets with excessive profits. Fourthly, they can stifle innovation through their ability to acquire emerging startups or competitors or by blocking or frustrating their entry into a market.

Increased mark-ups and price gouging represent billions more profits in the hands of massive corporations while everyday people increasingly struggle to afford to pay for essential products and services like food, rent and health care. Every day this parliament refuses to act to rein in the power of big corporations with too much market power, more and more people skip meals, fall behind in their rent and mortgage payments and delay vital medical appointments. The Greens are listening to Australian consumers. We listened to them last weekend in the seat of Dunstan.

Consumers are reducing the amount of groceries they are buying. They are buying less fruit and vegetables, and some are going without essentials and skipping meals. In my home state of South Australia, the situation is dire. Adelaide has recorded the nation's biggest jump in food prices, with prices increasing by 16.4 per cent between 2021 and 2023. This is higher than in any other Australian capital city. In South Australia Foodbank has recorded a 57 per cent increase in families visiting their food hubs. Over half the people who visit Foodbank are people in paid employment—what we call the working poor: people who are working every day but simply cannot afford to pay the steep price of groceries. These issues underline the Select Committee on Grocery Pricing in South Australia, a committee chaired by my South Australian Greens colleague the Hon. Rob Simms. The Greens know that these big supermarket corporations are ripping off consumers, and we are holding them to account.

The system is broken for workers too. Take Coles, for example. While the Coles CEO rakes in millions each year, Coles workers can't even afford to shop at their own workplace, with staff skipping meals and shopping elsewhere. Without meaningful pay rises, workers are living in a situation described as close to modern poverty. Frontline supermarket workers are increasingly subject to abuse and to poor wages and working conditions, while the executives and major shareholders line their pockets with millions in excess profit.

The Senate Select Committee on Supermarket Prices, chaired by my colleague Senator McKim, has heard devastating evidence about the effects of the supermarket duopoly and their pricing and market power and the impacts on our farmers. One fruitgrower told the committee that family farms will be gone in 10 years because of supermarket practices. Several industry veterans have bravely stepped forward to voice their concerns. Xavier Martin, the President of the NSW Farmers Association, has rightly said that the food retailing market is not functioning properly and that we need to break up Coles and Woolies if they won't behave. There is a widening gap between wholesale and shelf prices, with consumers paying more at the checkout, and none of it flowing onto our farmers. Farmers are paid too little and shoppers are charged too much. Consumers, farmers and workers are at breaking point, and the government needs to take urgent action. It's clear that greater competition reduces supermarket profits and brings down prices for consumers.

The Australian Greens have introduced a bill in the Senate to give the ACCC the power to break up supermarkets. The giant supermarket corporations have had it their way for too long, and it's time that the interests of people took precedence over the profits of corporations. We need to stop supermarket corporations ruthlessly using their market power to gouge prices while raking in billions of dollars in profit. Giving our courts and competition regulators the power to affect the supermarket duopoly will help reign them in. It will have a powerful effect on the way they operate. The proposed powers in our bill could be used to require the sale of specific Coles or Woolworths owned supermarkets or liquor outlets or their supermarket home product lines to a local or international competitor.

The Prime Minister has dismissed divestiture powers as a Soviet Union policy, but this is not a controversial or a radical idea. The US has had divestiture powers for over 130 years since 1890, which have been used effectively to reduce the market power of companies in a range of industries, including the breakup of the AT&T Telephone monopoly in the 1980s. Former ACCC Chair Allan Fels says a divestiture power should be part of the toolkit for all competition laws everywhere in the world. Low-income households in particular are being harmed by this lack of competition and resulting higher food prices. Cost of living is one of the largest issues we know facing Australians right now. It was a top issue in the election in South Australia in the seat of Dunstan last Saturday.

Giant supermarket corporations have had their way for far too long, and Australians know that this must change. This is clear from the sheer number of inquiries and reviews into the supermarket sector at both the state and federal level. This Labor government needs to be more ambitious and willing to tackle the problem head on, but this bill we're considering tonight does not do that. The Greens do support this bill's creation of a new designated complaints function for consumer and small business groups to raise complaints with the ACCC relating to systemic market issues. However, it's just another example of the Labor government tinkering around the edges instead of taking the real, significant, meaningful action we need to address this problem. We call on the Labor government to take the side of the Australian people and join with the Australian Greens to support the creation of divestiture powers to break up the supermarket duopoly.