BILLS – Competition and Consumer Amendment (Make Price Gouging Illegal) Bill 2024

I welcome Senator McKim’s attempt to try and help out here, but I must say I’m a little sceptical of the chances of this actually doing much. I don’t know if people are familiar with something called Polymarket. It’s an online prediction site. Overnight on Polymarket the odds of Jesus Christ reappearing this year have doubled. They were two per cent and they’re now four per cent, and I still think there’s more chance of Jesus Christ returning to Earth this year than of Nick McKim being able to help lower grocery prices in Australian supermarkets. As long as I’ve referred to the saviour and son of God by the right title, I’m happy, but I don’t think Senator McKim has much chance of making a difference here. It’s an admirable goal. Prices are too high. But this bill it is very, very simple. If it were this simple it’d be a little surprising that somebody hadn’t done this before. All the bill does is say, ‘A corporation that has a substantial degree of market power cannot price a good over an excessive price.’ How do they work out what a competitive price is? It says in the bill: The competitive price, for a good or service, is the price at which the good or service would have been acquired by, or supplied to, the other person if the corporation did not have a substantial degree of power in that market. That is price setting. That’s what this is. There is no price here that Senator McKim is referring to. There is no external data or figure that can be used to set the benchmark under this bill. You have to have somebody—someone with a slide rule or somebody with a spreadsheet—determine what the price would have been if the corporation did not have a substantial degree of market power. Who’s going to determine this? There have been examples of this over the years. It’s called a politburo. A politburo gets together and says, ‘This should be the price of bread, this should be the price of shoes and this should be the price of screws at Bunnings.’ That’s what this is. I don’t know if it’s news to the Greens and Senator McKim, but all of the attempts in history to do this have failed and failed miserably because there is no way for government, including bureaucrats in Canberra, to set prices in a sensible way without destroying the incentive to produce, to sell and to make the effort to provide goods and services to Australians. This would be covering the entire Australian market with a politburo that would be charged to set prices for all Australians. It would be a complete disaster if passed because we simply can’t assess these things without doing great damage to the people who produce goods and services. It is not just Coles and Woolworths that would be harmed by this naive and simplistic attempt to set prices in Australia. As egregious as their behaviour has been—and I am a big supporter of changing our competition laws to introduce divestiture powers like other countries have because of their behaviour—this would also impact on all of the suppliers to Coles and Woolworths, such as the farmers and the small-business people who the Greens are purporting to protect, because this bill does not exempt them in their supply chain that goes to somebody who has a substantial degree of market power. They will be impacted because the bureaucrats will have to sit there and ask, ‘Okay, what should the price of milk be?’ They’ll have to assess what the price of milk should be in a competitive market without market power. They’ll have to sit down and work it out. What happens if these bureaucrats make a mistake? Obviously, public servants never make a mistake, do they! But what if they make a mistake and set the price of milk way below the cost of production for a farmer in this country? You would get exactly what you got in places like the Soviet Union. You would then get shortages of basic goods, because people won’t produce the milk if they’re not getting a return for their hard labour and work to do so. So, again, I am not questioning the motivations here of the Greens. They want to lower prices. We would all like to see that. But this is too simple, is too naive and has never worked before, and so we should oppose this bill.