Regulatory Legislation Amendment (Reform) Bill 2023

7 Feb 2024

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I rise to speak on behalf of the Victorian Greens to the Regulatory Legislation Amendment (Reform) Bill 2023. As has been canvassed by previous speakers, this is an omnibus bill that seeks to reform regulatory legislation across 14 acts and 10 ministerial portfolios. According to the second-reading speech, the purpose of the bill is to increase productivity, make it easier to do business in Victoria and also protect consumers, community health and safety and the environment. I will not go through all the 10 portfolios and the 14 acts that are due to be amended; I think other members have covered that quite well. What I do want to focus my remarks on is clause 1 of the bill, the purpose of the bill – and the bill actually does amend the Essential Services Commission Act 2001 in relation to various administrative enforcement matters.

A number of opposition members have spoken of the need to cut red tape and to reduce regulation. We have had a number of Labor government MPs wax lyrical about how good the economy is going and how things are good for business. Well, I can tell you the economy is not working for people. People are really struggling, and the government’s response does not need to be to have less regulation or an approach of suddenly slashing red tape, it actually needs to be expanding regulation. The Greens certainly believe that consumers do need more protection, and the government can do this by expanding the administrative and enforcement functions of the Essential Services Commission to include the retail grocery industry – more specifically, supermarkets. The government needs to recognise that what is obvious is that supermarkets are providing Victorians with an essential service, just like other essential service industries that are covered by the Essential Services Commission – water, gas, the retail energy market. These are all regulated by government. All Victorians buy groceries to live. The vast majority of us will shop at one of the two major supermarket retailers.

Victorians are really suffering from the cost-of-living crisis, the high prices that supermarkets are charging for food. More and more Victorians are unable to put food on the table and cannot afford the essentials. The impact is profound. It is significant. It is impacting on people’s mental health, their quality of life. There is increasing hardship. People simply cannot afford the essentials and are going without. This is a massive impact right across our community. At the same time that this is occurring – this profound harm across our community – supermarkets are increasing their profits and their profit margins. They have got a combined market share of almost 70 per cent – it certainly is a duopoly – and this is allowing them to jack up the cost of groceries for already struggling Victorians.

By using the Essential Services Commission to regulate supermarkets the government can stop them from price gouging. It can lower the cost of food for everyone. It can give the Essential Services Commission the power and the objective to deter and stop excessive price increases, and this is something that governments used to do. There have previously been policies in this state and legislation enacted to actually prevent supermarkets from unfairly hiking up the price of groceries. It was once the purpose of the Department of Consumer Affairs; it had an express objective to deter excessive price increases. They did this through the Office of Prices. They even had a Minister for Prices overseeing this objective. They could monitor price rises. They could receive complaints. They would undertake price investigations. They would support community groups in collecting information about prices. They even had, for a period, legislation that backed up their targets for limiting price rises and gave power to the minister at the time, if they found that prices were unfair, to actually set a reasonable price.

So what we are calling for is for the government to give the Essential Services Commission that objective of deterring excessive price rises; the ability to monitor and report on grocery prices, including, for consumers, retail prices, but also wholesale and supply chain prices; the ability to monitor and report on the competitiveness or lack thereof of the supermarket industry in Victoria; and if supermarkets are found to be price gouging and refuse to lower their prices, the ability to set a fair price for consumers and make sure that, for consumers and producers, there is a fair price for all.

It has been good to see in recent months that in the upper house the Greens have secured an upper house inquiry into food affordability and food security. The federal Greens have secured an inquiry into supermarket price gouging, and subsequent to that the federal government commissioned the Australian Competition and Consumer Commission to do their own review. We had the ACTU releasing their review today, with some damning findings about unfair price hikes and profiteering right across the economy. But I would point out that in terms of powers, although in terms of competition it is mainly the federal government, the state does have a role to play when it comes to planning laws and retail leases to prevent land banking and unfair deals that lock out potential new entrants to the supermarket sector. These are issues that the state government, when it comes to competition, needs to look at very closely. It is state governments that have the power over price regulation.

By legally making groceries in the supermarket sector an essential service and having them covered by the Essential Services Commission Act 2001, supermarkets would face greater, ongoing monitoring – not just a one-off inquiry that will take a year but more scrutiny than ever before. This would bring greater transparency to the supermarket sector and the prices paid – both retail prices and to producers – pressure the supermarkets to stop unfair price hikes, make sure farmers get paid a fair price and, importantly, give the essential services commissioner the power to stop price gouging if supermarkets continue with unfair price hikes. This can either be done by way of separate legislation or, alternatively, the government can make a declaration under section 4 of the Essential Services Commission Act, which goes into great detail about how the government can do that and what the government can actually regulate. They have wideranging powers when it comes to regulating industry, and they can do this to prevent supermarkets price gouging. I urge the government to act, because there is an immediate, urgent need for the government to act on price gouging and make food affordable for everyone.

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