Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

During the 2007 election campaign, the then Leader of the Opposition, Kevin Rudd, bombarded our TV screens with promises to put downward pressure on the cost of living. When he came to power, he very quickly forgot those promises. On coming to government, what was Labor’s policy response on the cost of living? The response was to be seen to be doing something when, in fact, Labor is doing nothing at all. To address the rising cost of fuel, we have Fuelwatch, a scheme which would disadvantage independents, potentially drive up the cost of fuel and introduce price fixing to our fuel markets. The scheme has been widely ridiculed. Most recently, Annabel Crabb in the Sydney Morning Herald said of Fuelwatch, ‘The scheme should be taken out the back and shot to put it out of its misery.’ That sentiment is widely shared by a range of motoring groups. Then we had the ‘son of Fuelwatch’, or GROCERYchoice, which was a rolled-gold, gilt-edged waste of taxpayers’ money—in fact, a waste of $12.9 million.

Let us examine the points raised in the motion. On the first point, the issue of meaningful information delivered in a timely fashion: if you log on to the website, you are greeted by a cartoon size map of Australia, with large areas covering thousands of square kilometres, if not millions of square kilometres, all included in the one part of the site. That is particularly so in the north-west of Western Australia, where there are millions of square kilometres in the one GROCERYchoice area. You cannot identify the town where the sample was taken and you certainly cannot identify the store. Is a person in Coffs Harbour going to drive to Taree or, more absurdly, a person in Broome going to drive to Geraldton to shop for their groceries? Surely not. The selection of the areas alone is evidence enough that the Labor government now in office pays only lip-service to cost-of-living issues. The sample size—some 500 items—is ridiculously small when compared to the 25,000 to 30,000 which typically are available in the average large supermarket. Not only is the information geographically useless but also it is hopelessly out of date. Prices in stores change every week, every day and every hour, yet GroceryWatch monitors prices once a month.

On the second point, the comparison of price and quality: the contents of the basket are not published by the ACCC, so the consumer knows only the price of a mystery pack of items, some of which he may never purchase. What does a ‘general groceries basket’ mean? I am confused. And what meats are in a meat and seafood basket? Are they premium quality? Are they low quality? We are left in the dark. So what does the taxpayer get for his $12.9 million? The resounding answer is: not much—certainly not value for money and certainly not useful information. At best, you get vague, out-of-date information courtesy of the ACCC.

I move now to the issue of bias against independent grocery stores. If I am a competitive independent, I am lumped in with others who may be far less competitive than my store. The sample taken will almost certainly not be in my store, yet I may be greatly disadvantaged depending on which stores are sampled by the ACCC. Independent retailers come in all shapes and sizes. Some—like super IGA stores—compete directly and effectively with Coles and Woolworths. Other independent retailers serve smaller communities or compete with larger supermarkets based on convenience and service rather than on price. GROCERYchoice classifies all independent retailers in the one group. Regardless of whether the store is a large metropolitan supermarket or a smaller regional store, they are listed beneath one heading.

I have been informed that stores of less than 500 square metres have been surveyed for GROCERYchoice. It is obvious that a small store does not and cannot compete with a large supermarket, so including such stores is meaningless. This means that the prices charged by small independent stores in rural areas may be averaged together with prices charged by super IGA stores, to give a biased final result. According to NARGA, many large independent stores are directly price competitive with Coles and Woolworths, but this fact is concealed by the method the ACCC uses to calculate the average basket prices. GROCERYchoice would have you believe that independents are around $6 to $12 more expensive than Woolworths or Coles for a complete trolley of goods—every store, every time. This result is an average, and when the consumer goes out to shop he does not pay the average price; he pays the price that prevails in the store at the time. However, with GROCERYchoice, he cannot identify that store. It is proof positive that the material provided by GROCERYchoice does not benefit consumers.

The methodology used to compile the information severely disadvantages independents who are trying to compete with the major supermarkets. GROCERYchoice is misleading consumers into believing that all independent retailers are more expensive than major supermarket chains. This all comes down to one thing: a lack of transparency. The whole GROCERYchoice exercise has been shrouded in secrecy. As I said earlier, no-one knows which supermarkets have been surveyed, which products have been surveyed or what is in a basket of groceries. As a result, the information provided by the website is of no benefit to consumers. It discourages shoppers from visiting independents. It is just a farce.

The grocery price website tells me that I could save almost $19 by buying a basket of staple goods at the German owned supermarket ALDI instead of an independent supermarket. But it is ridiculous to compare the quality of generic products sold at ALDI with the premium branded products sold at traditional supermarkets. The GROCERYchoice website consistently portrays ALDI as being the cheapest place to purchase your groceries. While this may be true, the website is misleading because it ignores the fact that private generic products sold by ALDI are often inferior in quality to those premium branded products.

To add to this deceit, the Assistant Treasurer is on the record numerous times espousing the virtues of shopping at ALDI. He is the minister for ALDI, the minister for a German, foreign firm, and he is recommending ALDI over our local independent stores. I never thought I would see the day when we would have a federal minister espousing the virtues of a foreign competitor over our hardworking local businesspeople. Why has our Assistant Treasurer become the voice of ALDI? Perhaps he is learning German in his spare time! Does he have a vision of a life after politics as the German ambassador? I would have thought that he would be supporting the diverse range of independent stores who provide good service to the local communities they support and who work hard to provide groceries at the cheapest possible cost under the structures within which they operate.

GROCERYchoice is one of the great political frauds of our time. It fits the mould perfectly with regard to the Rudd government’s stance on cost-of-living issues—being seen to be doing something when in fact you are doing nothing at all. Providing out-of-date information at great cost to taxpayers is of no use to anyone. That is the definition of a waste of taxpayers’ money. The Assistant Treasurer should apply the advice of Annabel Crabb with regard to that other great political fraud Fuelwatch and take GROCERYchoice out the back and shoot it. It will save us all a lot of taxpayers’ money.

Belinda Neal (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

Thank you for that invigorating address, Member for Cowper! I rise to speak in the chamber today in opposition to the motion moved by the member for Cowper. The cost of groceries is a real issue that certainly impacts on the lives of many Australians. An average Australian household spends between 12 and 14 per cent of their disposable income on groceries. The average growth in grocery prices over the last 10 years has been well ahead of the CPI. This is a worrying trend and one that is putting pressure on many household budgets. This problem is exacerbated by the concentration of the grocery industry in Australia. Coles and Woolworths together make up about 60 per cent of the market. This means that the knowledge to choose is becoming even more important.

This government recognises that it is a problem and has taken action to address the problem. Labor believes that the government can best assist consumers by informing them that they can act in their own interests when selecting what products to purchase. That is why this Labor government has acted to help out consumers and to better inform them on the choices that they make. This will improve the community’s capacity to determine where the cheapest groceries are available in their region. In August this year, the government announced the establishment of the GROCERYchoice website. The sum of $12.9 million has been provided to create and maintain the website and also to survey grocery products over the next four years. We are putting more information into the public domain. This was the delivery of the commitment made by the government while still in opposition.

This website was established to provide independent information on the cost of a basket of goods in 66 supermarket outlets. There are approximately 500 products being monitored. The products are divided into seven typical baskets which reflect the weekly grocery choices of the average Australian household. These goods and their prices are surveyed in 61 regions across Australia; therefore, you can go into the website as a consumer and see whether Coles, Woolworths, Franklins, IGA or one of the other supermarkets is cheaper that particular month in your region. The exact items which form part of the baskets are not disclosed so as to preserve the integrity of the process. Obviously, if the grocery items were known, the retailer could manipulate the system by dramatically reducing the price of particular items in the basket and therefore skew the results. This would mean that consumers would be duped rather than assisted by the site.

I have to say that I continue to be amazed by the coalition members opposite, part of the old and tired Howard government, who took no action themselves during their 12 years in government to deal with this issue and only have a negative and carping approach to the government’s positive actions. Would the coalition deny consumers access to this valuable information? Whose interests are they putting forward if they are not interested in assisting consumers to make a real choice? With this whingeing view of grocery choices, the opposition are showing that they are out of touch with the community, because their views are not shared by the community, by consumers, by consumer advocates or even by economic commentators. CHOICE, the leading consumer group, responded positively to the price watch in their release of 5 August, saying:

The grocery price website has the potential to increase competition in the sector ... Consumers who choose to use the GROCERYchoice website will be able to accurately gauge which supermarket in their area is the cheapest for various baskets of goods.

Also, on Thursday, 7 August Alan Kohler said:

Poking around the ACCC’s new Grocery Choice website that was launched this morning, one thing becomes instantly clear: it is not a stunt, as Opposition Leader Brendan Nelson says.

Alan Kohler then went on to say:

And the truth, collected by ACCC contractors with notebooks going around supermarkets all over Australia once a month, is both enlightening and very powerful—as the truth can be sometimes.

But, most importantly, the jaded view of the opposition towards GroceryWatch is not shared by consumers, who are voting with their feet or, should I say, with their fingers. Consumers have accessed the GROCERYchoice website over four million times since its establishment. This is a real testament to the need in our community for real information about grocery prices and also to the value placed on this information by consumers.

This government does not guarantee that prices will come down from their present levels. The biggest impacts on grocery prices are international factors and climate events like drought, and of course we accept that these are beyond the government’s control. But this site gives consumers the information they need so that they are not going to be ripped off. What can be said is that consumers have accurate information about the price of groceries at different stores, and this will put downward pressure on prices and foster real competition.

This site has had its teething problems. When the site was first posted, some issues were raised about the layout of the site and accessibility for those with sight disabilities. These issues have now been remedied, and the site will continue to be sensitive to consumer needs. It will need to be improved over time to be the most useful for consumers that it can be. I have to say that I am surprised by the member for Cowper and his lack of support for this initiative. I know that many of his constituents are doing it tough, and I am sure that they could do with some help on grocery prices.

The most important principle is that this government is genuinely concerned about the real issues that working families face and the challenges that they have in balancing their budgets. This Labor government is taking action to empower consumers and to give them real choice. GROCERYchoice is only part of a range of initiatives being taken by this government to assist consumers. We have seen the introduction of a range of initiatives to help consumers which I am very proud of, including the ACCC inquiry into grocery prices, which was the most comprehensive inquiry into the supermarket sector since Federation and gave rise to this website.

The clarity and pricing legislation, which I spoke about last week, limits component pricing. Reforms have passed the House that will finally give the consumer accurate information about the total price that they will pay. The product safety issue, which has been furthered by the Assistant Treasurer, has delivered a national product safety reform package which will see our national product safety laws applied across the nation. The Ministerial Council on Consumer Affairs has delivered a national consumer law which will see one consumer law based on the consumer protection provisions of the Trade Practices Act. These will apply across the nation, will also include an unfair contract provision and will apply to all sectors of the economy with the exception of the finance services sector.

The Productivity Commission has estimated that taking these steps could result in benefits to Australian consumers and businesses of up to $4.5 billion a year. This government is acting, not just complaining.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

The member for Robertson might explain to me how GroceryWatch works for a person on Thursday Island—1,500 kilometres away from the nearest supermarket—or how it works for a person in Townsville—1,000 kilometres away from the supermarket in Mount Isa whose prices are checked. How does a person in Townsville go to Mount Isa to shop because there might be something a bit cheaper? Clearly GroceryWatch is a sham—an absolute sham. It is meaningless. In North Queensland, GroceryWatch is meaningless. That is the sad part about this. For such a large area of Australia, incorporating from Mackay north and west to the border, the information presented on the site bears no relation to what the prices really are in the supermarkets. That is hopeless.

When you go to the site, it tells you that it is solely intended to provide a general understanding of the subject matter to help people assess whether or not they need more detailed information. It is clear evidence yet again of a sham. The site also tells you that you may not reproduce, retransmit or distribute material without the written permission of the director of ACCC publishing. For goodness sake! It is a site that is supposed to help consumers compare grocery prices and the site itself says that you cannot tell anybody about it or distribute the information. It is public knowledge but you are not allowed to distribute it without the written permission of the director of ACCC publishing.

Consumers know that the GroceryWatch website is in fact a sham. They know they can go to the Coles website, the Aldi website or the Woolworths website and get absolutely up-to-date information on pricing on the spot. They know that they can go to the catalogues, which are put in our letterboxes with such great frequency, and get information on the specials that are available. Of course, that means that GroceryWatch does nothing to bring prices down.

The Labor government went to the last election promising to bring prices down and, of course, they sold us all a pup. When the electorate began to realise they had sold us all a pup, up came the smoke and mirrors—let’s have GroceryWatch. So we got GroceryWatch, and now the consumers are waking up to it being another pup. Kevin Rudd’s promise that he would bring down fuel and food prices in fact has not been delivered. Now there are all sorts of reasons why it has not been delivered, but it has not been delivered. He has done nothing, the government has done nothing, and GROCERYchoice changes nothing.

The GROCERYchoice website does not compare stores; it only compares regions. What is the point in comparing the North Queensland region with some other region? We get the information that something in Brisbane is $4 cheaper than it is in the North Queensland region. Are people really going to go 1½ thousand kilometres to Brisbane to save $4? Of course they are not going to do that. Despite the expenditure on setting up and maintaining this website, it is not worth a cracker. The money should be used for more meaningful things to help consumers with their choices, and GroceryWatch is certainly not one of them. I agree with the motion that is before the House tonight and I agree that GROCERYchoice has been an abject failure for this country.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I have listened carefully to the two previous speakers from the opposition, the member for Cowper and the member for Herbert. It is incredible that the opposition has for decades presented itself as the party which represents business interests and small business and which believes in and supports the workings of our competitive domestic market economy, yet it is so clearly and deliberately obstructing this initiative that will assist Australian consumers to make their choice. It will give them knowledge and empower them when they are doing their shopping.

The purpose of GroceryWatch is to increase consumer knowledge of prices placed on supermarket goods. Increasing consumer knowledge is, one would think, fundamental to a healthy competitive market. One would also think that supporters of our economic system would absolutely welcome additional input to foster competition between supermarket chains. One would think that an opposition that had, over several months in both this and the other place, presented itself as being concerned with limitations on consumer demand and the purchasing power of citizens around this nation would welcome an initiative that fosters competition and the ability of consumers to increase their purchasing power and the quantum of goods that they can access with their nominated budget.

It really is disappointing that the opposition, the self-appointed party of business interests, is siding in this debate with the largest businesses. It is standing by the largest supermarket chains in attempting to limit the public’s knowledge of the prices placed on goods that Australian families need in their everyday existence. They are standing up here and in the other place against an initiative designed to foster competition. This has to be amongst the most disappointing episodes in the opposition’s disappointing performance in recent years.

Australians want heightened competition in the grocery market. The public demands clarity of pricing, and consumers want to know as best they can the relative value offered by alternative suppliers. This Labor government is standing with the consumers in this debate. The opposition clearly is standing with the interests of big business, limiting consumer knowledge, deriding those speaking in the interests of the consumer. The Liberal Party has, I suppose, turned into an oligarchs party. The Rudd Labor government are working in the interests of the consumer and we are totally unapologetic about it.

A notable contribution to this debate was the report of the Australian Competition and Consumer Commission on the grocery sector, which identified areas in which competition is compromised. Already, working within this place and through the Council of Australian Governments, this consumer focused Labor federal government has commenced the development of a nationally consistent unit price regime for consumers’ easy and accurate comparison of prices of a given product. I will repeat that: easy and accurate comparison of prices of a given product. One would think that people would be welcoming the opportunity for consumers to be able to compare prices of a given product. It has opened up discussion on potential creeping acquisition laws, addressing large market players’ overpowering of the market and decreasing competition through incremental mergers and acquisitions.

Most recently, the government has introduced ‘clarity in pricing’ legislation through amendment of the Trade Practices Act to reduce the misrepresentation of the cost of goods by omitting additional fees and charges that any consumer would necessarily have to pay for a purchase. Labor knows there is real reform to be pursued in relation to the grocery sector, in the interests of the consumer, the customer, the public we represent and those interests that we act for. The inquiry also revealed the potential for large players to play games with local planning systems to delay or prevent new competitors entering the market.

The Rudd Labor government is committed to working in the interests of the public and increasing the downward pressure on grocery prices through competition. The government has already relaxed restrictions that have prevented competitors buying vacant land to build new supermarkets, increasing competition. These measures are in addition to the amendments of the misuse of market power provisions within the Trade Practices Act and the criminalisation of serious cartel conduct.

Here we have a government committed to removing barriers to competition within the grocery market, fostering competition between retailers and improving the purchasing power of the public, and the opposition can do nothing but snipe and obstruct the government’s good work, aiding and abetting the grocery market superpowers through the limitation of information that consumers have at their disposal. (Time expired)

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

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