Interview with Justin Smith, ABC Melbourne Mornings

3 July 2024

JUSTIN SMITH: First, Peter Dutton and his Opposition have a new plan to bring down prices at supermarkets. This is the new thing. While, we're still having the nuclear debate and the clean energy debate. We are, the renewable debate, I should say it's now supermarkets, and they're doing it. Peter Dutton is doing it with a threat, a threat to introduce laws that will give them the power to break up the big boys of the supermarkets if they indulge in things like anti competitive behavior. Peter Dutton's Coalition has promised to introduce the divestiture laws if he wins at the next election, but the reports are coming out of the party room that not everyone is so keen, with some of his MPs saying that they were ambushed on this and that it couldn't be further away from what they're really about, breaking up companies. So this is a bit of a shock for some in the coalition camp and the Australian Retailers Association are warning it could have the opposite effect to what Peter Dutton is trying for. It could actually increase prices. And with the new laws will come a new bureaucrat, a supermarket Commissioner, who will work with the ACCC. This is a brand new position if the Opposition wins. So let's talk about it. Senator Jane Hume, Shadow Minister, Shadow Finance Minister and Senator for Victoria, of course, is in our Canberra studio. Hello, Senator.

JANE HUME: Good to be with you. Justin.

JUSTIN SMITH: It's cold here, I imagine it's cold there.

JANE HUME: It's pretty cold in Canberra too.

JUSTIN SMITH: I would think so thank you very much for your time. We appreciate it. Well, one Liberal MP has said that this was the biggest debate in years in the party room. What side did you land on?

JANE HUME: Well, the party room is always a place where debate happens, and when a shadow minister comes in and introduces a new policy, that's where we have a discussion. We ask questions and get an understanding of how it's going to work, and that's what occurred in the party room yesterday. This policy is all about getting a fairer deal for consumers, for farmers, and particularly for small business that are dealing with the big supermarkets. The supermarkets have an awful lot of power. The Coalition is always going to support functioning markets, but this is a highly concentrated market, which is why something needs to be done.

JUSTIN SMITH: Okay, so you're all for it. That's clear. How is this going to work?

JANE HUME: Well, essentially, it is a suite of policies. The first is a code of conduct for the supermarkets that's already in existence, but at the moment, it's voluntary. We want to make sure that it's mandatory, and we want to make sure that there are increased penalties for breaches of that code. Second, we want to introduce this supermarket Commissioner that you spoke about. That Commissioner will sit within treasury, but will liaise with the ACCC, and that will act as a as an impartial and confidential avenue for farmers and for suppliers to allow their grievances to be heard and taken to the ACCC without fear of retribution from those big supermarkets that have so much power.

JUSTIN SMITH: Senator, would you, would you give us an example of how you would, when you would break up a company and how you would break up that company?

JANE HUME: So the divestiture powers are very much the last resort, certainly not the first response. And these are powers that have existed in the US, in the UK, in Canada and in Europe for decades, and have created there a far more competitive supermarket sector, and that's what we'd like to see here. Now this is a very high bar, a high hurdle. There would have to be a demonstrated misuse of market power before a court would make a decision as to whether a supermarket needs to have one asset or maybe some assets divested. Not only that, but the court has to be satisfied that if those assets are divested, that there will be a substantial increase in competition and that it is in the public interest that's around, whether it affects jobs, whether it affects provisions of goods and services, what the effect on shareholder value would be. So it is very much the last resort. It is certainly not the first response, which was our concern with the Greens Bill. The Greens Bill was all about breaking up big companies, not just the supermarkets, but right across the economy. That's not what this is about. This is not a sledgehammer. This is very much a scalpel, and it is the last resort.

JUSTIN SMITH: All right, I don't want to divert away by getting into what the Greens want, because I'm trying to get an understanding of what you want here. If you, could you give us a scenario though, where this would be used?

JANE HUME: Well, that would be up to the courts, and it would be up to the courts on the recommendation of the ACCC. And the ACCC are the ones that have said that this would be a useful tool in their armory, so that they have more power to deal with this highly concentrated sector. Food prices have gone up around 11.4% in the last two years alone. And we know that those supermarkets have enormous power when they deal with not just consumers, but also with their suppliers and with the farmers in particular, who seem to be getting the raw end of the deal. This is just one more tool for the regulator to use, should they need to in those circumstances where there has been an active misuse of market power. Not just that market power exists. There has to, has to have been misused.

JUSTIN SMITH: But this, this is a pretty fair dinkum piece of legislation you're bringing here. It can't just be then to the courts and to the ACCC, because you are bringing this in, we kind of need an example of what, what would need to happen for a company to be split up. If the threat is there, the scenario needs to be there.

JANE HUME: Well, there are scenarios there. We've heard of situations, for instance, where supermarkets have land banked. They might be a regional town where they own one site, and then they occupy one site, but they own another site, which prevents another supermarket chain getting a foothold in that regional town, for instance. That's one example, but it is really more about those active cases where there has been the big, behemoth supermarket that has misused its power with a supplier that is causing prices to be gouged and consumers to pay more, if the ACCC can identify it and cannot fix it in any other way, well, then this is the last tool in the shed that they can use. But it's a pretty powerful one. It's a deterrent.

JUSTIN SMITH: Well, look, there are some reports in the paper today that some of the MPs, Liberal MPs, your comrades, are feeling bemused by this policy. I think people listening now might feel a little the same way that they're not, kind of quite sure how this will work. On the ground, how will this work in reality?

JANE HUME: The Coalition has always supported functioning markets. I don't think that there is any surprise here. This is something we've been talking about for some time. We know that David Littleproud and Angus Taylor were tasked by Peter Dutton to put together a policy that would increase the tools in the shed, the tools in the arsenal for the ACCC to use with this highly concentrated sector, a sector that affects all Australians. Because, let's face it, there are few supermarkets that we can go to. There really is only, you know, two big ones and two sort of smaller ones that aren't in every town and and every regional center. So we're limited with what we can, you know, the choices we have. If we've limited with the choices we have, we have to make sure that their power is used appropriately and responsibly.

JUSTIN SMITH: It's Justin Smith on 774 ABC Melbourne, Senator Jane Hume, Shadow Finance Minister, is with me. Senator during the Rudd and Gillard years, petrol was the big issue at the time. I mean, it never really goes away, but it was a big one at the time electorally. So they appointed a petrol Commissioner, and then the role was criticized for not having a lot of impact. In fact, I think I heard it called a paid observers role at one point, what powers will your supermarket Commissioner have where the petrol Commissioner failed?

JANE HUME: Well the supermarket Commissioner will sit within Treasury, and it will be that that impartial, that very confidential way for farmers and suppliers to be able to go to somebody to say, 'hey, I don't feel like I'm getting a fair deal with the supermarket here. What is it that we can do about that?' And of course, they have told us that when they do make a complaint, they're worried that the big supermarkets have so much power they can simply say, ‘well, we won't deal with you anymore’. So, and that's an unfair outcome too. We want to make sure that their grievances can be heard, not just impartially, but very confidentially, and then that those cases can be packaged up and sent to the ACCC to deal with without fear that the small supplier that the small farmer is going to, you know, see their business suffer because they've spoken up.

JUSTIN SMITH: But isn't the isn't the supplier able to do that with the ACCC now?

JANE HUME: No, they don't feel like that. They have that avenue that the ACCC really only deals with very big cases and and, you know, these are often small, small issues that can have a negotiated outcome, and the commissioner will have a role in creating that negotiated outcome.

JUSTIN SMITH: Before I let you go, I thank you very much for your time on this cold morning. But a question for you, I would imagine that you would be one of the Victorian experts in the party room. So when you lean into Peter Dutton's ear to talk to him about Victoria. What are you telling him? How are you going to sell Peter Dutton to Victoria?

JANE HUME: Well, I think Victorians are looking for a change right now, particularly if they run out of gas before the end of the winter on these very cold days. I think we've seen what government mismanagement of both of the economy and the energy sector can do over a long period of time, and we simply can't afford to have any more Labor governments any further.

JUSTIN SMITH: But do you, does Peter Dutton need to change anything to sell himself to Victorians? Or you, do you think you've just got him spot on?

JANE HUME: I'm looking forward to Victorians getting to know Peter Dutton, as I have over the years. He's actually a terrific bloke. He's good fun and I don't think that the media do him justice. So I think as Victorians get to know Peter, they will be very pleasantly surprised.

JUSTIN SMITH: Well, tell us something fun about Peter Dutton. You've got an open forum right now, Senator, I won't interrupt you.

JANE HUME: You want to know something fun about Peter Dutton?

JUSTIN SMITH: Yeah sure, please.

JANE HUME: Can I tell you that you know he actually has a terrific laugh. He has a terrific laugh, so find a joke that you can tell him Justi, next time you get him on the radio. See if you get him to have a giggle, because he really is very fun when he has a laugh.

JUSTIN SMITH: No we'll get you to smuggle a listening device into the party room, and we'll get you to record it next time. We appreciate your time. Thank you.

JANE HUME: Good on you.