Address to the National Co-operative Producers Roundtable - Speech


It is a pleasure to be here today, with cooperative producers from across industry and around Australia. Thank you to Melina Morrison, chief executive of the Business Council of Co-operatives and Mutuals, for convening today’s conversation, and to all participants for joining us in Sydney, on the lands of the Gadigal people.

Let me start off with a with a story. My grandfather Keith Leigh was born in 1912. In 1929, when the stock market crashed and the Great Depression began, he was just 17 years old. In order to make ends meet, he hit the road as a travelling salesman, largely selling hosiery. As Keith liked to say of his business role, he was a ‘traveller in ladies’ underwear’.

The 1930s were tough on Keith, as they were for many Australians. At the end of the decade, he and his friend Lindsay Brehaut set up the Hobson’s Bay Co-Op, named after the little bay that sits at the top of Port Phillip Bay in Melbourne. The Hobson’s Bay Co-Op allowed locals to pool their buying power at a time when so many were feeling the pinch.

Cooperatives and mutuals are right through the Australian economy, from finance to food, roadside assistance to retail. The sector has a larger footprint than many realise, both in employment and economic impact. Cooperatives and mutuals are spread throughout the Australian economy.

And cooperatives and mutuals can give a competitive spirit to the economy. Around the time when my grandfather was setting up his store, the Cambridge economist Joan Robinson published a critical book titled The Economics of Imperfect Competition.

Joan Robinson’s work rejected the idea that markets always work perfectly and we never have to worry about monopolies. She coined a new word ‘monopsony’, which is the power of throwing its weight around. Monopsony is the principle that a large firm can have power not just over its customers, but also over its suppliers.

One of the reasons that many suppliers are feeling the pinch to Australia’s supermarkets is because supermarkets and processes are often pretty concentrated, and the farmers selling to them are diverse.

Joan Robinson’s insight about monopsony is the reason why the Food and Grocery Code of Conduct was set up. We've now got Craig Emerson, the former Competition Minister, and one of the best economics policy brains in the country, reviewing the Food and Grocery Code of Conduct, and looking at whether that voluntary code should be made mandatory.

Craig Emerson’s inquiry has heard a range of evidence, particularly around the very small number of complaints that come forward under the current Code and concerns about potential reprisals from suppliers. Dr Emerson will be bringing down his interim report quite shortly.

Treasurer Jim Chalmers has also tasked the Australian Competition and Consumer Commission to look into supermarket competition: exploring issues such as the way in which loyalty schemes operate, and ensuring that consumers are getting the best deal in the supermarket sector.

We’ve also established the Competition Taskforce within Treasury. The Taskforce has a broad remit, looking at merger laws, whether Australia's merger laws are fit for purpose in an era where many other countries are considering their merger laws. The Competition Taskforce are looking at non-compete clauses, and yesterday I gave a speech at the McKell Institute releasing an issues paper that seeks people's views on non-compete clauses.

Non-compete clauses bind about one-in-five workers from immediately moving to a better job. And may be one of the reasons why, under the former government, we saw sluggish wage growth and relatively slow business formation.

The Competition Taskforce is also looking to revitalise national competition policy between the states and territories. In the early 1990s Paul Keating tasked Fred Hilmer and his team to look at competition laws in Australia, and whether reform could be warranted. That process set in train national competition policy which led to a whole raft of reforms. Electricity pricing, rail connectivity, road pricing and more were reformed, and the benefits were a permanent two and a half percent lift in GDP – about $5,000 for every Australian household.

We’re again working with states and territories. We recently had a really productive officials-level meeting hosted by New South Wales Treasurer Daniel Mookhey here in Sydney, which began the process of looking at how National Competition Policy updated for 2024 would look. National Competition Policy today will be centred around issues such as the data and digital economy, the transition to net zero, and the care economy. Different challenges, but the same process because so much of competition law really relies on the interaction between states and territories, and having all of us committed to the same set of reforms.

Part of that reform is ensuring that we've got a variety of business types. As Melina Morrison has noted, the Albanese Government is enthusiastic about cooperatives and mutuals because they provide a competitive spur to the economy, a different way of doing things, bringing together collective power in many different sectors of the economy.


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  • Andrew Leigh
    published this page in What's New 2024-04-05 16:06:17 +1100

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.