Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

This Greens bill, the Competition and Consumer Amendment (Make Price Gouging Illegal) Bill 2024, amends section 46 of the Competition and Consumer Act 2010 to prohibit a corporation with substantial market power from abusing that power by charging an excessive price for a good or for a service, otherwise known as price gouging. Any Australian who has ended up with a half-full supermarket trolley at the supermarket checkout knows what price gouging is, because Coles and Woolworths are engaged in price gouging. If you want some evidence of that practice and the fact that Coles and Woolworths are carrying it out, I simply refer people to the recent legal action launched by the ACCC against Coles and Woolworths for behaviour that clearly included price gouging.

Just to be clear, this is what the ACCC is alleging Coles and Woolworths did. They took a product that was at a particular price, significantly raised its price, simply because they could, then dropped the price partially but not all the way back down to its original price, and then claimed that product was on a discount, when in fact it wasn't on a discount at all; its price had been inflated. The reason Coles and Woolworths can engage in price-gouging behaviour like that is because they can—because their market dominance is so significant. Taken together, they have over two-thirds of the market share in the Australian food and grocery sector, and that share is climbing. What they are doing is misusing their market dominance to price gouge shoppers. As an aside, they're also misusing their market power to do over their suppliers, many of whom are Australian farmers.

This bill is based on recommendation 1.5 of the ACTU inquiry into price gouging, which was led by former chair of the ACCC Professor Allan Fels. It's also based on recommendation 2 of the report of the Senate Select Committee on Supermarket Prices, established by the Greens. Both of those reports recommended amending section 46 of the competition act to make it illegal to charge excessive prices, and they recommended that that happen in terms similar to the provisions which are currently extant in the European Union. Under this bill the ACCC will be able to apply to the court for an order where it believes a corporation has abused its market power by price gouging. If a corporation is found to have illegally price gouged, the court can impose orders under section 76 of the competition act, which includes a maximum civil penalty of $50 million.

I want to pause and say that, ultimately, when corporations behave badly, yes, there should be corporate fines levied. But we've got to get past that and start fining the people making the decisions: the CEOs of the big corporations. Corporate CEOs in Australia are making off like bandits. In the case of Coles and Woolworths, their CEOs are on multimillion-dollar salary and bonus packages, and it's about time the CEOs were hit where it hurts—in their wallets or in their bank accounts—when they engage in price gouging.

We all remember what happened when the Greens negotiated with the Assistant Treasurer, Mr Jones, to include personal fines for dodgy bankers. The CEO of the Banking Association, former Queensland premier Anna Bligh, reached into the offices of the Prime Minister and the Treasurer, and Mr Jones was instructed to renege on the deal that he'd shaken hands on. He walked away from his promise to introduce personal fines for dodgy bankers. Again, this is because the corporate CEO class in this country don't want to be held accountable for their actions and don't want to have to pay fines when they fail to meet the responsibilities that almost every Australian would think that they should have.

Under section 87B of the competition act the ACCC can also require enforceable undertakings by a corporation. The undertakings the ACCC can impose are sufficiently broad to allow the ACCC to require a corporation to lower the price of a product to the price it would be if it were sold in a competitive market. That can be done for a specified period of time, while guaranteeing supply of the product. What that means is, in effect, that corporations that engage in illegal price gouging are liable for a significant penalty and that the ACCC and the courts can intervene to lower the price of a product. That is what we need to see in this country: a mechanism to force corporations to lower the price of a particular product if they are price gouging and misusing their market power. To determine whether a price is excessive, the bill requires the court to consider the price of the product if the corporation did not have substantial market power.

We've drafted this bill in such a way as to keep the definition of 'excessive price' deliberately broad to provide the courts with the discretion to determine whether price gouging has occurred based on the specific circumstances of each case. We obviously note that different industries will have different thresholds for what is considered an excessive price. However, in making that determination, the courts can consider whether the price is excessive relative to cost, whether the price is excessive relative to the economic value of the product provided, whether the price is excessive compared to a circumstance where there was greater competition in the market and also whether a corporation has used the cover of an unusual event that has led to a shortage of a good or service or excessive demand for a good or service to increase prices above what is required to cover an increase in input costs.

We've introduced this bill to respond to the urgent need in Australia to rein in corporate price gouging. What we have seen since the Greens initiated the Senate inquiry into supermarket prices is the opposition actually coming some way towards a solution by announcing their policy of supporting divestiture powers in the supermarket sector. Because the Greens have driven this debate and because the opposition has shifted, albeit slightly, towards a position of being prepared to take on the big supermarket corporations, it is now just Labor standing hand in hand with Coles and Woolworths, defending their market dominance and defending their price gouging.

We've all seen the photos of the Prime Minister, Mr Albanese, in a Coles vest, standing with the CEO of Coles, who is receiving a multimillion-dollar salary and bonus packages that are in part funded by the price gouging of ordinary Australian shoppers. It is a shame on the Labor Party and a shame on the Prime Minister that he is prepared to engage in repeated photo ops with the CEO of Coles and, no doubt, similar meetings with the CEO of Woolworths while those big corporations are actually price gouging ordinary Australian shoppers.

Everywhere you turn at the moment, prices are going through the roof, whether it's power, transport, rents, mortgages or food and groceries, and the common denominator amongst so many of those skyrocketing prices is corporate profiteering and corporate price gouging. It's about time we had more people in this parliament who are prepared to stand up to the big corporations, prepared to take them on and prepared to hold them to account. That's what the Greens are here to do. We want to see economy-wide divestiture powers that would help us not just bust up the supermarket duopoly but also put more competition into things like the airline sector in this country. We want to see price gouging made illegal because we want genuine cost-of-living relief for Australian shoppers.

Since Labor came into power two short years ago, the price of food is up by over 10 per cent. Rents have gone up by 31 per cent. The average mortgage payment is up by over $1,600 a month. Power bills, insurance costs, medical bills, seeing your GP—it's all skyrocketing out of control. And, while those costs are going up, wages have not kept pace. The share of the national economy that is going to corporate profits has never been higher, and the share of the national economy that is going to wages has never been lower. Millions of Australians are getting smashed by an economy-wide crisis, and this government is doing no more than fiddling at the margins. That's not enough to provide genuine relief for the millions of Australians who need it. We need urgent intervention and urgent action. We need a government that is prepared to take on the big corporations and fight for the interests of ordinary Australians, rather than fighting for the interests of the big corporations and the corporate CEO class.

All of this was made even worse last week when the Prime Minister came out with his grand announcement: taking on the amount of air in chip packets. Then he turned around and tried to describe that as addressing shrinkflation. I don't think Mr Albanese knows what shrinkflation is. I want to say to Mr Albanese: if you want to take on shrinkflation, adopt the Greens policy, which was also a recommendation of the Select Committee on Supermarket Prices, of requiring the big supermarkets to notify, in plain, clear terms on the shelves, when the size of a product has decreased. That's what these corporations are doing; they're shrinking the product and keeping the price the same or, in some cases, even putting the price up. If Mr Albanese wanted to address shrinkflation, it would be a very easy thing to address. But, of course, that would require him to stand up to the big corporations, and that's what he's continually shown that he's not prepared to do.

The dollars extracted by big corporate price gouging in this country flow to corporate CEO pay and salary packages. Recent analysis by the Australian Council of Superannuation Investors shows that chief executives of Australia's largest corporations take home, on average, 50 times the pay of a typical worker. In the early 1990s, corporate CEOs earned about 17 times the salary of ordinary, typical workers. Now, they earn over 50 times the pay of a typical worker. Former Woolworths CEO Brad Banducci, who refused repeatedly to answer reasonable questions during a hearing of the Senate Select Committee on Supermarket Prices, received $8.65 million in 2023, about 127 times the pay of a full-time Woolies shop floor worker.

This is obscene. This is outrageous. This is grossly unfair. The rich are getting richer while ordinary Australians have to work harder and harder just to be able to afford the essentials of life. The big corporations are making off like bandits, booking obscene profits, their CEOs are making obscene bank, and millions of ordinary Australians are getting smashed in an economy-wide crisis. It is time for action. It's time that people in this place were prepared to stand up to big corporations, stand up to corporate CEOs, stop taking political donations in a system of institutionalised bribery and actually start standing up for ordinary Australians. It is just the Labor Party now who continues to stand with the big corporate interests of Coles and Woolworths, and, in doing so, they are absolutely abrogating their responsibility to ordinary Australian shoppers who are being price gouged to buggery.