Andrew Leigh

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN BREAKFAST WITH SALLY SARA
MONDAY, 1 APRIL 2024

SUBJECTS: Divestiture powers for competition regulators, the government’s work to improve supermarket competition, Meta removing news, News Media Bargaining Code, misinformation and disinformation.

SALLY SARA, HOST: The Greens and Coalition are working separately on powers that could forcibly break up the major supermarkets, although the government isn’t backing that idea just yet. Andrew Leigh is the Assistant Minister for Competition and Treasury, and joins me now, Andrew Leigh welcome back to the program.

ANDREW LEIGH: Thanks Sally, great to be with you and your listeners.

SARA: If the ACCC recommended divestiture for the big supermarkets would you consider it or is it completely off the table?

LEIGH: Well let’s see what the ACCC come back with, but it’s certainly true Sally if you look at previous competition inquiries, the Hilmer Review didn’t recommend divestiture, the Harper Review didn’t recommend divestiture. Daniel Mulino’s House Economics Committee has just brought down a terrific 280-page report on competition, it doesn’t recommend divestiture, and that includes the Coalition members of that committee. The National Farmers Federation have argued against divestiture, and the ACTU have made the point that it could potentially hurt workers. So we’re sceptical, but of course we’ll always look to advice from agencies and we’re looking eagerly to see what the ACCC comes back with in their supermarkets inquiry.

SARA: With the investigations at the moment, you’re likely to get advice from several corners at the moment. What do you think could be the key to improving the situation, not only for consumers but also for suppliers, farmers in particular?

LEIGH: Yeah, I mean there’s a couple of big things Sally, one is that we need to make sure people have better information about where to get the cheapest deal. So from today CHOICE is beginning its quarterly price monitoring, funded by the government. That will be reporting to tell Australian shoppers where they can get the best deal. CHOICE will be collecting prices from today and that report will be out in public around the end of June.

We’ve also got Craig Emerson, the former Competition Minister and one of Australia’s top policy economists, looking into the Food and Grocery Code of Conduct. That really goes to the relationship between the suppliers and the large supermarkets and it's been argued that it should be made mandatory rather than voluntary as it currently is. So Craig Emerson’s report will shortly be handed to the government and made public.

And then we’ve got the Australian Competition and Consumer Commission, as you said Sally, looking into supermarkets, predominantly on the consumer side. And one of the real things that they can do now, that wasn’t possible even just a few years ago, is to use big data to make sure that programs such as loyalty schemes are operating in the interests of consumers.

SARA: We were talking about divestiture at the beginning, the US and UK both have divestiture powers for supermarkets, what do you think makes Australia different?

LEIGH: Well those powers are very rarely used, I’m not aware other countries having broken up supermarkets, they’re rarely used in other industries as well. So we don’t see that at present as being a significant tool in the fight against market concentration, which let’s be clear is a significant fight for this government. We’ve seen a rise in market concentration, an increase in mark-ups over the course of the last couple of decades. That’s coincided with the lousiest decade of productivity growth in the post-war era, under the former government. Wages languished, household incomes languished.

That’s in contrast with what happened in the 1990s where competition reform spurred productivity growth and delivered gains of around $5000 a year to the typical household. So we’ve got a historical track record that competition reform can work to help household income growth, and then we’ve got the evidence now that market concentration is a real problem. I don’t want Australia to end up the land of the duopoly. We’re looking at every practical solution to deal with the problem of market concentration.

SARA: Are you prepared to consider making the Food and Grocery Code of Conduct mandatory?

LEIGH: Yes absolutely, and that’s the main question that Craig Emerson has been looking at. If you read his issues paper, very clearly, front and centre of that is the question: should the Food and Grocery Code of Conduct go from a voluntary code to a mandatory code?

SARA: Let’s have a look at another issue. From this month Meta, which runs Facebook and Instagram, will start pulling news from its platforms as it shuts down the Facebook news tab. What do you think that that will mean for the millions of Australians who get their news from those sites?

LEIGH: It’s an abrogation of their responsibility to the Australian information environment. This is a place that people go to for trusted news, the idea that you would take off trusted news and just allow the ecosystem to be filled with misinformation and disinformation, is appalling. This is a way in which, as Communications Minister Michelle Rowland has pointed out, this is a way in which Meta has behaved in other markets as well. It’s the way in which it’s behaved in Canada, it’s the way it’s behaved in Europe. It’s simply unconscionable, it should not be treating its consumers in this way. Many Australians rely on Meta, Facebook, for their daily news. It is not too much to ask one of the world’s biggest multinationals to make a modest contribution to the Australian news media, in order to keep a highly functioning public debate, in which people are making decisions based on good information.

SARA: The Canadian experience shows there’s been no significant drop off in Facebook users since news was taken off the platform, what does that tell you about the commercial reality of this decision?

LEIGH: I think people use platforms out of habit, and I don’t think any particular change leads people to immediately switch their behaviour. But I think it does damage the media ecosystem if Meta is to take news off and if it is to cease making its reasonable social contribution to funding the news media in Australia. Australian news media businesses should be fairly remunerated for their news content. We support the News Media Bargaining Code and the Assistant Treasurer and the Communications Minister, Stephen Jones and Michelle Rowland, are working closely to resolve the situation.

SARA: Is there a way that Meta can be forced back to the bargaining table? What information do you have on that?

LEIGH: Well there’s certainly penalties available under the News Media Bargaining Code, they haven’t been used so far but that’s certainly one tool in the toolkit. I would hope though that Meta would decide to do the right thing. They’re a business that ought to understand the value to Australia of having a well-functioning highly informed democracy and the role that they play in it. They are turning over huge profits, it’s not too much to ask that they make a small contribution to the news media.

Just to take one example, the News Media Bargaining Code has delivered dozens of regional journalists from the ABC, journalists who are out there reporting on stories that wouldn’t be reported on otherwise. Other news platforms have relied on that funding from the News Media Bargaining Code, and Meta is one important player there, they should do the right thing. It’s just part of their social license to operate, Sally.

SARA: Are you concerned that there could be a surge in low quality news content?

LEIGH: Absolutely, I mean you look at the range of misinformation, disinformation being spread by bad actors. Whether that is elements of the far right, whether it’s foreign actors, there is certainly a significant amount of junk flooding the zone, if I can use a family friendly term. And we know that when you take high quality news out of the space, then it’s the sewer that floods in.

We’ve got to do more to make sure that we’re having a discussion which is based on facts, not feelpinions. Which is ensuring that they’re not running scare campaigns and fear campaigns. Australia prospers by engaging with the world through strong institutions and through having careful intellectual debates when we’re confronted with big challenges. But the rise of populist politics, the heating up of politics, the style of ‘us and them’ confrontation, all of that is fuelled by a misinformation, disinformation environment.

SARA: Minister, thank you very much.

LEIGH: Real pleasure, thank you Sally.

ENDS