I rise to speak to the Public Accounts and Estimates Committee’s Report on the 2023–24 Budget Estimates. The report quite rightly makes a number of references to inflation and just the significant impacts that high inflation is having on individuals, households and the broader Victorian economy: that the state’s inflation is being driven by price rises across a range of goods and services and energy, that high inflation is a risk to our economic outlook, that inflation is putting downward pressure on household incomes and that interest rates are having a significant impact on households. So the questions I again pose to this chamber are: what is the government’s strategy to tackle inflation, and does it even think that it has a role in tackling inflation?
I can tell the chamber that there was actually a time in Victoria when Labor governments did see a role for state governments to lower inflation. They did see a role for the government to take on grocery prices and supermarket prices, and in fact previous governments have taken action on excessive price hikes and local CPI. For example, the Cain Labor government took the following measures: they had a Minister for Prices and they had an office for prices within consumer affairs to deter excessive price rises, and this had the express objective to deter excessive price rises across the economy. It monitored prices; it undertook price investigations; it exposed unfair price hikes; it supported community groups to take actions in their local communities to survey prices; and it supported competition – something that is, sadly, badly lacking in our supermarket sector. In addition to that, they had a target ceiling for grocery price rises, and importantly they had specific legislation that would enable the minister or a prices commissioner to set prices if they were found to be excessive. These policies, this legislation, were credited by the government of the day with lowering Melbourne CPI from some of the highest to the lowest in the country.
In fact I am indebted to the Parliamentary library because they managed to dig out the second-reading speech from some of this specific legislation, the Prices Bill 1989, which replaced the Grocery Prices Act 1987, and it is very telling. In the second-reading speech it states that when the Grocery Prices Act was in power the grocery price rises were kept to almost half their target level of 6 per cent. It was important that this legislation had an impact, but when that legislation expired 12 months later, without the support of legislation and with less negotiating power, the results were then less favourable and they were not able to meet their target of 6 per cent. I quote from the second-reading speech, which tells you just what the government of the day’s attitude was to high prices:
The government has been fearless in highlighting companies engaged in unfair or excessive pricing and brought them to task publicly. This in itself has a significant impact, although without the support of legislation many companies are prepared to ignore such exposure and continue their practices.
Fearless – ‘fearless in highlighting companies engaged in unfair excessive prices’. You have got to say that this government do not see it as their role to highlight unfair price hikes. They are not fearless in holding companies to account for their unfair prices. In fact what we have just got from this government is that it is purely a federal matter. Well, that is simply not the case. It remains completely legal for a supermarket to charge whatever they want, and the ACCC and the federal government cannot do a thing about it. This power to take on unfair price hikes only rests with the states.
In fact this has been decided constitutionally at a referendum twice. It was Gough Whitlam that sought to have these powers at the federal level, and in doing so he stated in Parliament:
Controls over prices are not a cure-all for inflation, but they can be used responsibly and selectively as one of the elements in an anti-inflationary strategy.
Whitlam was not able to get the power to control prices and could not deal with the economic crisis of the 1970s, but this government, this Labor government, does have the power to act. They can act like previous Labor governments have over history, but instead they are choosing not to.