ABC CANBERRA DRIVE WITH ROSS SOLLY
TUESDAY, 5 DECEMBER 2023
SUBJECTS: Reserve Bank decisions; Cost of living support; Preventive detention
ROSS SOLLY: So, as you’ve been hearing in the news, the Reserve Bank today – no surprises – but they’ve decided to keep the interest rates on hold. I’m sure that’s going to be coming as a big relief for a lot of homeowners around the country and here in the national capital and surrounding districts.
Assistant Minister for Competition, Charities and Treasury Andrew Leigh I’m sure is also quite relieved. He is just back from competing in a triathlon, in fact, in Western Australia – as you do. Minister, thanks for coming on the show.
ASSISTANT MINISTER FOR CHARITIES, COMPETITION, EMPLOYMENT AND TREASURY ANDREW LEIGH: A real pleasure, Ross. We don’t have Ironman triathlons in the national capital, which is why you’ve got to travel to get to them. But a wonderful event.
SOLLY: Should we have Ironman triathlons in the national capital? Just –
LEIGH: We had a half ironman a couple of weeks ago, so, you know, we’re getting there.
SOLLY: We’ve got the layout for it. Now, the Reserve Bank – no surprises, Andrew Leigh – deciding to keep interest rates on hold. That, I’m sure, will make a big difference for a lot of householders, do you think?
LEIGH: Look, absolutely. I think that will be welcome relief for many mortgage holders around the country. Obviously, we as a Federal Government don’t engage in the monetary policy game; our focus is on providing targeted cost-living relief, the electricity bill relief going out to more than 50,000 Canberra households, the childcare package, which is helping parents of kids in care. The cheaper medicines measures, 60-day prescribing, are really important for someone with a long-term health condition. And all that while delivering the first budget surplus in 15 years, altogether taking about half a percentage point off inflation, making the Reserve Bank’s job easier.
SOLLY: Does it make your job a bit easier over Christmas as well, though? Because, I mean, the polls have not been kind for your – for the government in the last month or so, and a lot of people are linking that to cost of living pressures. Are you feeling the pressure at all, Andrew Leigh?
LEIGH: Ross, ever since I was an academic at the ANU, I’ve been arguing that we pay too much attention to polls in the Australian public conversation. The horse race is much less important than individual policies. I got into politics in order to make a difference. I’m pleased to see that our Budget this year has been assessed by independent experts as being the most inequality-busting Budget that’s been brought down in a decade. And also, that at the same time, we’re seeing wages rising.
SOLLY: Yeah, but it’s not –
LEIGH: A second quarter of real wage rises.
SOLLY: But, I mean, yes, we can ignore the polls, and I’m a bit like you – I think they come and go. But I think blind Freddy could see at the moment, Andrew Leigh, that the government is a bit on the nose with a lot of Australians.
LEIGH: Look, I’m really not concerned about polls, Ross.
SOLLY: No, polls aside. Forget about the polls. I’m sure word of mouth is telling you, I’m sure that your Cabinet meetings, your party room meetings, there are messages being said that we need to get out there – you need to get out there and get on the front foot and try and turn the feeling of the electorate around.
LEIGH: Ross, what I understand is that people are under pressure, and certainly there’s a lot of pressure, particularly hitting those who’ve just taken on a mortgage, who have some of the biggest interest bills – they tend to be at the pointy end of monetary policy there. We’re aware of the importance of providing cost-of-living relief, but the kind of unfunded cash splash the former government engaged in would only have made the problem worse. The best way to deal with the cost-of-living crisis is to get the inflation rate down. We’ve got inflation now coming off the peak, well down from its peak which was under the former government just before we came to office. And at the same time, Ross, you don’t want to forget that we have an extraordinarily strong labour market right now. We’ve had 20 consecutive months of unemployment below 4 per cent, 17 of those – 17 of those months under our government. And that is really important for people who would otherwise be shut out of the labour market.
LEIGH: Minorities, people with unusual skills, people with unusual CVs –
SOLLY: Okay, just on –
LEIGH: – people who –
SOLLY: Yeah, okay –
LEIGH: – we’ve got full employment.
SOLLY: Just on the pressures, though, that you’re talking about, obviously going into Christmas, Andrew Leigh, people loosen the purse strings a little bit. It is a time when maybe we spend money that we don’t have. Is there a concern that when the Reserve Bank Board next get together that the effects of Christmas will have kicked in and we could again see a situation where there is needed to be some pressure applied?
LEIGH: That will be entirely up to them, Ross.
SOLLY: Is it – no, is what I’m saying logical, though, Andrew Leigh? It would make a change, I know, but it does make sense, doesn’t it?
LEIGH: Ross, I cherish central bank independence. It’s a cornerstone of a strong economy. And the moment that politicians start opining or meddling with Reserve Bank decisions is problematic so –
SOLLY: No, no, I’m not asking you to opine about what the Reserve Bank might do; I’m just saying is it logical that during the Christmas period, there can be inflationary pressures applied because people are spending more money? I’m not asking you about what the Reserve Bank might do as a result, but is that the likely scenario?
LEIGH: Well, seasonal pressures aren’t really a surprise to the Reserve Bank, Ross. All of their forecasts will take into account the usual seasonal patterns, the fact that spending does tend to go up in December. So, what they’re looking for is surprise news, global events that are coming in, unexpected changes in the labour market or the product market. You know, I think we’ve got a ways to go before we get inflation down.
LEIGH: Australians are doing it tough. The global economy is uncertain. But right now, inflation is coming down, wages are going up. We’ve got the first surplus in 15 years.
SOLLY: All right.
LEIGH: So, let’s remember our strengths while being ognizant of the challenges.
SOLLY: Okay. As the Assistant Minister for Competition, Andrew Leigh, why is the Labor Party going to support the Senate inquiry into supermarkets?
LEIGH: Well, we understand, Ross, that people have questions about what’s driving the prices they’re paying at the cash register, and these are the kind of questions on which we welcome an informed debate. So, we’re supporting the Senate inquiry. Our number one priority remains addressing the inflation challenge, and alongside that ensuring that the competition watchdog is able to crack down on any evidence of anti-competitive behaviour.
SOLLY: Which you urge – would you urge – I mean, they can be summoned anyway, I’m sure, but would you urge the head of Coles and Woolworths to come forward and give frank and fearless evidence to the inquiries?
LEIGH: Look, I think it’s always healthy when inquiries are able to hear from senior leaders. When I was on the House Economics Committee, we were able to hear from the heads of the big four banks. You get the sorts of insights that are important in terms of driving a good committee result. I’m sure people will be cooperative with those inquiries. We do have a reasonable degree of concentration in the supermarket sector. I gave a speech a couple of weeks ago talking about how the market share of Coles and Woollies grew from just 20 per cent in the 1950s all the way up to over 60 per cent today through a series of mergers and acquisitions. One of the reasons why we’re looking into merger laws in Australia, why we’ve got the Competition Taskforce operating in Treasury is to make sure Australians get the very best deal in whatever market they’re playing in.
SOLLY: Do you think it’s possible there is price gouging going on or even cartel-like behaviour? This is what the Greens are saying. Do you think that that’s possible, Andrew Leigh?
LEIGH: I’m always cognisant of the importance of looking for inappropriate behaviour. A decade of holding the competition portfolio for my party has led me to be sceptical of claims that ‘big is beautiful’. Sometimes you do see problematic behaviour. And I think there is sometimes a tendency of firms that get larger to throw their weight around, whether that’s with consumers or suppliers. We’ve got a monopoly challenge in Australia, but also a monopsony challenge, which is where firms use their size to squeeze their suppliers, which can also be a squeeze on workers.
SOLLY: Yeah –
LEIGH: One of the theories about why wage growth was so lousy over the last decade is that maybe firms' power has squeezed workers as well as consumers.
SOLLY: It’s a bit hard to unbreak the egg, though, isn’t it?
LEIGH: That’s right. That’s why we need this merger inquiry. That’s why we need to be doing more post-merger reviews. That’s why the Competition Taskforce’s focus on things like non-compete clauses are really important. We’re bringing some of the best minds in the Treasury together, guided by a terrific outside panel, to bear on the competition review. That flows out of a whole lot of work which has shown that market concentration has gone up, markups – the gap between cost and price – have increased. And Australians are not shifting jobs and getting the wage gains that come from that job shifting as often.
ROSS SOLLY: Right.
LEIGH: So, all in all, our economy has become a little bit less dynamic and hence the big focus on competition by this government.
SOLLY: You’re listening to ABC Canberra Drive with me, Ross Solly. My guest is the Assistant Minister for Competition, Charities and Treasury and local member, of course, Andrew Leigh. Just on the immigration detention situation, Andrew Leigh, we learned today that two of the people released after the High Court decision now face new charges. Has your government lost control of this issue?
LEIGH: Well, look, what we’ve had is the High Court striking down a John Howard-era law and the Government putting in place legislation to respond to that. So, what we need to see now is the opposition backing in this legislation, which will come to Parliament on Thursday.
SOLLY: But we’ve had a situation where, I mean, critics will say, Andrew Leigh, that your party should have been ready for this. You should have had the laws in place, you should have been ready to ensure that we wouldn’t have people wandering the streets who within days of being let loose are reoffending.
LEIGH: The week after the High Court handed down its decision we had a Bill ready in Parliament. The updates have come as the High Court has hand down its reasons. In this case, the High Court brought done a judgement and then followed that up with reasons. And so, we needed to put in place those important backstops. But community safety is absolutely vital. We’re moving to legislate a robust preventive detention and community safety regime. That’s modelled on the existing high-risk terrorist laws under the former government. Those laws had bipartisan support. I would expect these laws to have bipartisan support. But it will be up to Peter Dutton whether he’s going to make political grandstanding attempts or back in the legislation as a responsible opposition would.
SOLLY: Well, is it political grandstanding or is it echoing the concerns of Australians who are wondering why some of these people who were being held for issues like sexual abuse and murder, other things, are now allowed out on the streets of Australia? I mean, why wasn’t the legislation ready to go? If you knew you had an inkling that this might have happened, surely you should have been ready the minute that High Court decision came down, the Government should have been ready to slap down the new laws and say, “Right, this is how we’re going to deal with this”?
LEIGH: Ross, we did. We had the –
SOLLY: We had a week. Everybody was already out on the streets by then, Andrew Leigh.
LEIGH: Well, these are people who are detained under state and territory laws, so the question as to how policing rolls out is a question for states and territories. What the Commonwealth needs to do is to put in place a robust regime. Now the High Court has very clearly said this can’t operate through a Minister simply detaining someone; it has to be the order of a court. And so, these new laws will allow the Minister to make an application to the court. If the court is satisfied the person poses an unacceptable risk of committing a serious violent or sexual offence, then they can be detained.
SOLLY: Just a final question on this: one of the high-profile cases involved a man who was accused – he’s been accused of being involved in a political assassination in Malaysia. We were told that he was here in Canberra. Have you made any attempts to determine who this person is, whether it’s safe to have him in Canberra, whether there’s any issue with him being in Canberra?
LEIGH: Ross, my job as a politician is not to try and play Constable Plod; it is to leave issues of policing to the police and to provide the police with the appropriate laws that they need in place. So, the –
SOLLY: But you also are supposed to be representing your constituents, Andrew Leigh, and some of your constituents may well have been concerned that this person had been allowed out of detention and was now living here in Canberra.
LEIGH: Well, what we did with the first bill, Ross, was to put through laws which criminalised that cohort of individuals going near a school, contacting a victim or their victim’s family. This second set of laws allows for a community safety and preventive detention regime. Those sets of laws sit together in keeping the community safe. Our job is not to be out there attempting to do the work of the police; it is to be in parliament ensuring the police have the appropriate powers. We’re doing just that. The question now is: will the opposition back it?
SOLLY: Andrew Leigh, thanks for your time this afternoon.
LEIGH: Thank you, Ross.