Additional Comments from Labor Senators

1.1Labor Senators understand that the cost-of-living crisis is a major concern for many Australians.Greater competition is critical for putting downward pressure on prices and delivering more choice for Australians. With this in mind, we are fully supportive of the actions taken to date by the Government to ensure our competition and consumer policy settings achieve their purpose of enhancing the welfare of Australians.

1.2This includes increasing penalties for anti-competitive conduct, banning unfair contract terms, establishing a designated complaints function within the Australian Competition and Consumer Commission (ACCC), making the most significant changes to merger laws in 50 years, and establishing the Competition Taskforce to investigate critical policy issues, including non-compete clauses, and ongoing work to prohibit unfair trading practices.

1.3Labor Senators also note the Government’s specific actions relating to supermarket prices, namely directing the ACCC to conduct an inquiry into Supermarket Pricing, appointing former Competition and Small Business Minister the Hon Dr Craig Emerson to lead an independent review of the Food and Grocery Code of Conduct and providing funding to consumer body CHOICE to provide price transparency and comparison reports on a quarterly basis.

1.4In order to facilitate the committee’s report, Labor Senators provide these additional comments to indicate our position on the various recommendations.

Divestiture powers

1.5Labor Senators do not support passage of the Competition and Consumer Amendment (Divestiture Powers) Bill 2024, and do not support the committee’s first recommendation around supermarket-specific divestiture powers.

1.6Labor Senators note that greater competition is critical for lifting dynamism, productivity and wages growth, putting downward pressure on prices and delivering more choice for Australians dealing with cost-of-living pressures. Australia’s productivity growth has slowed over the past decade, particularly during the period of the Coalition Government, and reduced competition has contributed to this—with evidence of increased market concentration, a rise in markups and a reduction in dynamism across many parts of the economy.

1.7Many witnesses highlighted the importance of stronger merger laws, which address issues of creeping acquisitions, and include significant penalties for anti-competitive conduct. Labor Senators support recent reforms in this area.

1.8Many witnesses to the committee noted that divestiture powers could lead to unintended consequences that have the potential to make Australian consumers and farmers worse off.

1.9Previous Competition Reviews, including the 1993 Hilmer Review, 2003Dawson Review and 2015 Harper Review, all considered, but recommended against the introduction of a divestiture power due to likely unintended consequences. These reviews found that to break up a firm may significantly reduce a firm’s general efficiency and viability. We are particularly concerned about the impact that disruption to thin supply chains may have on regional communities.

1.10We are also strongly of the view that consideration of additional powers for the ACCC should occur after the report of the current ACCC inquiry is received by the Government.We also note that the Government is already progressing important work that will address many of the concerns that have been expressed about market concentration—including merger reform—which many stakeholders have indicated is a greater priority.

Recommendation 2

1.11Labor Senators note that the Australian Competition Law already contains significant provisions to address misleading and deceptive conduct, which includes actions which mislead consumers about the reasons for pricing and price changes.

1.12Consideration of additional powers for the ACCC should occur after the report of the current ACCC inquiry is received by the Government.

Recommendation 3

1.13Labor Senators do not support this recommendation. We note that the Competition Taskforce is already considering the various roles of competition institutions, as did the Harper Review.We are of the view that it is appropriate to allow the Taskforce to complete its work, and the ACCC to complete its inquiry, before consideration of any changes to the structure of institutions.

Recommendation 4

1.14Labor Senators note that the Government is already progressing significant work in this area, in conjunction with the States and Territories. On 30 August 2023, the Government launched consultation on possible reforms to address unfair trading practices. The Government is currently considering the issues raised by stakeholders as part of that consultation period.

Recommendations 5 and 6

1.15Labor Senators support a strengthened and mandatory Food and Grocery Code. We note that the interim report of the independent review of the Food and Grocery Code of Conduct has already recommended that the Code be made mandatory, with the introduction of significant penalties for breaches and a strengthened dispute resolution process.

1.16Dr Emerson’s independent review is also considering whether the scope of the Code should be expanded to other retailers and wholesalers and/or sectors.

1.17We are also aware that the final report of the independent review is due by 30June 2024, and believe that these recommendations should be considered alongside that report when the Government is determining its response to the review.

Recommendation 7

1.18Labor Senators support the announcement made by the Treasurer on 10 April 2024, where he outlined the Government’s proposed merger reforms.The priority for the Government is to ensure mergers are faster, stronger, simpler, targeted and more transparent.

1.19Under the Government’s proposals, the ACCC will have greater visibility of merger activity and competition issues, as a public register of mergers will be created. Subject to the passage of this legislation, the ACCC will have greater ability to review mergers that pose a risk to competition, consumers and the economy, while transactions that are in the national interest will be fast tracked.

1.20It will also mean that all decisions on merger applications will be made within 30 days, unless appealed.Mergers above certain monetary and market share thresholds, which will be determined through consultation, will be required by law to be notified to and determined by the ACCC—ensuring acquisitions most likely to impact consumers are subject to extensive scrutiny.

1.21The ACCC supports the Government’s proposed approach.[1]

Recommendation 8

1.22Labor Senators note that the issue of land banking is currently being considered by the ACCC Supermarkets Inquiry. Consideration of additional powers for the ACCC should occur after the report of the current ACCC inquiry is received by the Government.

Recommendation 9

1.23Labor Senators support the Government considering any legislative change and any additional powers for the ACCC after the report of the current ACCC inquiry is received by the Government.

Recommendation 10

1.24Labor Senators support the Government continuing to ensure the ACCC is appropriately funded. Additional funding would also be considered in the financial impact statement accompanying any relevant legislative reforms.

1.25The ACCC currently possesses extensive investigation and information gathering powers. Consideration of additional powers for the ACCC should occur after the report of the current ACCC inquiry is received by the Government.

Recommendation 11

1.26Labor Senators support this recommendation.

Recommendation 12

1.27Labor Senators support this recommendation.Labor Senators also note the considerable community education and campaigns being undertaken by retail workers and their trade union to highlight the treatment of these workers by consumers as well as their employers.Labor Senators fully support the “No‑one Deserves A Serve” campaign.

Recommendations 13 and 14

1.28Labor Senators note the significant work already being undertaken by the Government (through policy and legislative changes like merger reform), the ACCC Inquiry and the Independent Review of the Food and Grocery Code of Conduct.We do not support further Senate inquiries being established before the ACCC inquiry and the Emerson Review are completed. Labor Senators were disappointed that invited multinational companies declined the committee’s invitation to appear.

1.29Labor Senators thank the many members of the public who took the time to share their experiences with the committee, along with the industry groups, unions and retailers who appeared before the committee.We also sincerely thank the committee secretariat and other members of the committee for their hard work and cooperation, which has ensured the committee has been able to complete this important inquiry.

Senator Glenn Sterle

Deputy Chair

Labor Senator for Western Australia

Senator Louise Pratt

Member

Labor Senator for Western Australia

Footnotes

[1]Australian Competition and Consumer Commission, ‘ACCC welcomes proposal for stronger merger laws’, Media Release, 10 April 2024, https://www.accc.gov.au/media-release/accc-welcomes-proposal-for-stronger-merger-laws (accessed 6 May 2024).