Little evidence to back Rudd's claims on grocery prices By David Uren and Asa Walquist AUSTRALIANS are spending less of their take-home pay on food than they were a decade ago thanks to wage increases that have outstripped food price rises.
As Labor yesterday attempted to add grocery costs to a pre-election hip-pocket armory - which already includes housing affordability - economists said there was little evidence to support the party's claim that grocery prices were spiralling because of a lack of competition among supermarket chains.
Australian Bureau of Statistics figures show that in the 10 years to March 2007, average full-time wages rose 47 per cent.
Over the same period, food prices rose 41.3 per cent and inflation was 29.1 per cent.
Farmers unhappy about retail price rises
Farmers, however, complain that the rise in prices they are paid for produce has been outpaced by prices on supermarket shelves.
Official figures show that over the past 20 years, the share of household spending going to food has come down from 20 per cent to 17 per cent as people spend more on housing and recreation.
UBS retail analyst Michael Peet said there was no evidence that supermarket chains were making abnormally high profits.
Woolworths supermarkets have an average profit margin of 6 per cent, while the Coles supermarkets make a 4 per cent return.
This is in line with other world markets, such as Britain, where supermarkets average a 6 per cent profit margin, despite the presence of more big chains.
Calculations by Commsec chief economist Craig James show that over the past five years, average wages have risen by 25 per cent, while average consumer prices have risen by 14 per cent and food prices have gone up by 18 per cent.
An average wage buys 50 per cent more bread, 56 per cent more rump steak, 60 per cent more eggs and, surprisingly, 78 per cent more petrol now than it did five years ago, according to his figures.
Greater rises in wholesale prices
Westpac senior economist Anthony Thompson said retail food prices had been rising less rapidly than wholesale prices.
"It could be argued that the big supermarkets are using their market power to undercut competitors and to absorb some of the price pressures themselves, rather than passing them on fully to consumers."
The Australian Consumers Association welcomed Labor's plan to ask the Australian Competition and Consumer Commission to monitor supermarket prices.
Spokeswoman Ria Voorhaar said the association had no evidence of collusion or price gouging by the two supermarket chains, but there were big variations in pricing that were difficult to explain.
Queensland Farmers Federation chief executive officer John Cherry, said shelf prices were rising much faster than those paid at the farm gate.
Over the past four years, retail food prices have risen by 17.8 per cent, but farm-gate prices have risen by just 2.3 per cent.
Farmers want openness in pricing
Mike Badcock, president of the vegetable growers association Ausveg, said he would back anything that brought more openness to food pricing.
"We have a duopoly because the two major supermarket chains supply about 70 per cent of the market," he said.
"That gives them the power to be able to dictate what price and quality they require and also they are able to dictate what price they sell to the consumer."
Farmer Tony Morrison sells about 3000 prime lambs each year. The Goulburn farmer sells direct to a supermarket, as well as into the export market.
He said he was a bit sceptical about Rudd's inquiry.
"It is just not that simple," he said. "We have had our spats with supermarkets before, but I don't think making public statements about whether we are getting screwed by the supermarkets is in our interest."
Mr Morrison said the good prices paid for export lamb had effectively put a floor under the Australian price.
Rudd 'ignorant' about economy - Costello By Sid Marris PETER Costello has ridiculed Kevin Rudd as economically "ignorant" and accused him of creating a phoney crackdown on retail prices.
While Labor is trying to capitalise on discontent among some voters who feel they are missing out on the boom, the Treasurer dismissed the Opposition Leader's ideas as misleading and empty.
The Treasurer said Mr Rudd had announced something that was already being done, while pretending it was a new idea.
"This is Kevin Rudd at his ignorant best," he told the ABC's 7.30 Report last night.
Mr Costello took painstaking aim at Mr Rudd over price monitoring, saying it was already going on and emphasising his command of the detail of the price of staples.
He recited the price of bread, biscuits and baked beans in Sydney, Melbourne and Brisbane.
ACCC already taken action
Mr Costello said the Australian Competition and Consumer Commission, which Mr Rudd wants to force to monitor supermarket prices, had already brought actions over price-fixing such as over bread in 2003.
Last year, Woolworths paid a $7 million fine for anti-competitive practices.
"The monitoring is not the hard part; the monitoring is going on. The important thing is if the monitoring leads to evidence then the evidence has got to go before a court of law," Mr Costello said.
"This is all coming as a great revelation to Kevin Rudd."
Earlier, Mr Costello said the Australian Bureau of Statistics regularly released a survey of consumer prices and it showed that under the past 10 years of the Howard Government, prices rose 2.4 per cent a year compared with 5.2 per cent a year under the Hawke and Keating Labor governments.
"Here is a question for Mr Rudd," Mr Costello said.
"Does the price monitoring that the ABS is doing show that prices rise twice as fast under Labor as they do under the Coalition?"
Mr Costello's attack came as the Opposition Leader yesterday continued to broaden his economic pitch that ordinary Australians were not sharing in the boom because of rising grocery, housing and childcare prices.
But retailers and economists pressured him to provide evidence.
Consumer groups question price increases
While consumer groups said they welcomed an investigation into the market dominance of Coles and Woolworths, they noted that their own survey of a typical basket of goods showed prices had, since 2003, risen less than the official inflation figures.
Mr Rudd yesterday announced he would ask the ACCC to investigate retail prices and regularly publish survey results for consumers to compare.
But he admitted there was no clear evidence of exploitation by Coles and Woolworths, prompting Mr Costello to question his judgment.
Nationals senator Barnaby Joyce, who has campaigned against the control of the big two grocery giants, and Family First senator Steve Fielding challenged Labor to go further than an ACCC inquiry.
Senator Joyce accused Mr Rudd of having "a foot in both camps", saying he should move to ban predatory pricing outright: "He doesn't want to take on the vested interests, but he wants to appeal to the voter pushing their trolley."
Mr Rudd argued that household costs were rising in excess of inflation, making a mockery of John Howard's claims that people were better off.
"What this all means is that the dollar earned by Australian families is not going as far as it used to," he said.
"It means some may have to buy less, go without or draw down on their savings. Or worse, go into debt."
Labor to release more statistics
Adding to Labor's pitch, Opposition Treasury spokesman Wayne Swan will today produce analysis of census data that shows the number of families under mortgage stress - those paying more than 30 per cent of disposable income on repayments - almost doubled in the five years to 2006.
Woolworths chief executive Michael Luscombe yesterday said the company welcomed any policy announcements that would clarify and correct myths about supermarket pricing and competition.
He said Woolworths' own measures of inflation suggested prices, taken across thousands of lines, had grown 1.3 per cent in 2004, 2.2 per cent in 2005 and by 3.4 per cent in 2006, when banana prices increased sharply.
Mr Luscombe disputed the much-quoted statistic that the big two control 79 per cent of the market, saying the figure applied only to scanned items and did not include fresh food or goods sold from small independents or petrol stations.
The actual figure was 52 per cent: 29 per cent to Woolworths and 23 per cent to Coles.
Ria Voorhaar, a spokeswoman for the Australian Consumers Association, said dominance by the big two reduced the amount of discounting that went on and allowed prices to stay high.
But the ACA noted that a similar basket of goods tested in 2003 and 2007 showed a 12 per cent rise, compared with a 16 per cent rise in the consumer price index.
Adolf Hitler, John Howard nationalists, says Keating By Mike Steketee PAUL Keating bought into election-year politics again last night with an attack on John Howard in which he portrayed him as a dangerous and divisive nationalist who manipulated Australia's best instincts.
The former prime minister used a speech to the Sydney Film School to deliver a discourse on the Prime Minister's culture and history wars that drew in Hitler and Margaret Thatcher - though he hastened to add he was not equating them.
But he portrayed Mr Howard, like Hitler, as a nationalist, rather than a patriot and he said that nationalism was "arguably more exclusionary than racism", with a propensity to stigmatise cultural, religious and linguistic attributes.
"Nationalism is, I believe, a dangerous and divisive tendency: its stock in trade is jingoism, populism and exclusion of the most calculating kind."
Labor colleagues will be relieved that Mr Keating did not repeat his recent attacks on them, instead concentrating his firepower on Mr Howard.
But Mr Keating is likely to come under attack for his portrayal of Mr Howard and his implied reflection on how Australian voters are being manipulated by him.
In a speech he titled Film and art in the Australia of nationalism and cynicism, Mr Keating said that when Mr Howard disparaged elites, he actually was disparaging cosmopolitan attitudes, as against the certainties of the old mono-culture and older-style nationalism.
"A cornerstone of nationalism is the propensity to call into question the motives or to attack the attitudes of other members of the national family.
"Indeed, Adolf Hitler, perhaps the exemplar populist, wrote explicitly on the subject in his Mein Kampf: 'I was a nationalist but not a patriot'.
"In Hitler's day, the term 'elite' had not yet arrived. But if it had, the nationalist in him would have compelled him to use it, for it's easy shorthand, if nothing else.
"Margaret Thatcher famously used the phrase 'for all of us', when at the time she completely meant 'for some of us'."
Mr Keating said Mr Howard's equivalent was the "we" he used when declaring in the context of refugees that "we will decide who comes to Australia and the circumstances in which they come".
"I say this not to suggest or to align in any way Margaret Thatcher or John Howard with Adolf Hitler," he added.
"To do so would be as unreasonable as it would be absurd.
"I use Hitler's words in this narrative only to make the distinction between nationalism and patriotism which he himself made.
"For importantly in this context, he was the 20th century's leading nationalist - its leading anti-patriot."
As for Mr Keating himself, he declared himself a patriot - a word that "encompasses all that is traditional, inclusive and cosmopolitan".
"The nationalism surrounding the First World War and Gallipoli in particular has fuelled the Australian conservative story for nine decades - the same nationalism which prevented the conservative parties from similarly celebrating Australian heroism in Papua New Guinea and Southeast Asia.
"Those Australians fought for all we had created here and become, not for some notion of a ruling class or people's community, let alone an empire.
"It is no coincidence at all that a predecessor party of the current Liberal Party called itself the Nationalist Party.
"These days, the conservative rural rump which once called itself the Country Party now calls itself the National Party.
"Different families of leopards but always with the same spots."
He said the Howard years had been deadening to the arts, and encouraged filmmakers to resist "the arid philosophy (that is) part and parcel of John Howard's Australia".
Little evidence to back Rudd's claims on grocery prices
ReplyDeleteBy David Uren and Asa Walquist
AUSTRALIANS are spending less of their take-home pay on food than they were a decade ago thanks to wage increases that have outstripped food price rises.
As Labor yesterday attempted to add grocery costs to a pre-election hip-pocket armory - which already includes housing affordability - economists said there was little evidence to support the party's claim that grocery prices were spiralling because of a lack of competition among supermarket chains.
Australian Bureau of Statistics figures show that in the 10 years to March 2007, average full-time wages rose 47 per cent.
Over the same period, food prices rose 41.3 per cent and inflation was 29.1 per cent.
Farmers unhappy about retail price rises
Farmers, however, complain that the rise in prices they are paid for produce has been outpaced by prices on supermarket shelves.
Official figures show that over the past 20 years, the share of household spending going to food has come down from 20 per cent to 17 per cent as people spend more on housing and recreation.
UBS retail analyst Michael Peet said there was no evidence that supermarket chains were making abnormally high profits.
Woolworths supermarkets have an average profit margin of 6 per cent, while the Coles supermarkets make a 4 per cent return.
This is in line with other world markets, such as Britain, where supermarkets average a 6 per cent profit margin, despite the presence of more big chains.
Calculations by Commsec chief economist Craig James show that over the past five years, average wages have risen by 25 per cent, while average consumer prices have risen by 14 per cent and food prices have gone up by 18 per cent.
An average wage buys 50 per cent more bread, 56 per cent more rump steak, 60 per cent more eggs and, surprisingly, 78 per cent more petrol now than it did five years ago, according to his figures.
Greater rises in wholesale prices
Westpac senior economist Anthony Thompson said retail food prices had been rising less rapidly than wholesale prices.
"It could be argued that the big supermarkets are using their market power to undercut competitors and to absorb some of the price pressures themselves, rather than passing them on fully to consumers."
The Australian Consumers Association welcomed Labor's plan to ask the Australian Competition and Consumer Commission to monitor supermarket prices.
Spokeswoman Ria Voorhaar said the association had no evidence of collusion or price gouging by the two supermarket chains, but there were big variations in pricing that were difficult to explain.
Queensland Farmers Federation chief executive officer John Cherry, said shelf prices were rising much faster than those paid at the farm gate.
Over the past four years, retail food prices have risen by 17.8 per cent, but farm-gate prices have risen by just 2.3 per cent.
Farmers want openness in pricing
Mike Badcock, president of the vegetable growers association Ausveg, said he would back anything that brought more openness to food pricing.
"We have a duopoly because the two major supermarket chains supply about 70 per cent of the market," he said.
"That gives them the power to be able to dictate what price and quality they require and also they are able to dictate what price they sell to the consumer."
Farmer Tony Morrison sells about 3000 prime lambs each year. The Goulburn farmer sells direct to a supermarket, as well as into the export market.
He said he was a bit sceptical about Rudd's inquiry.
"It is just not that simple," he said. "We have had our spats with supermarkets before, but I don't think making public statements about whether we are getting screwed by the supermarkets is in our interest."
Mr Morrison said the good prices paid for export lamb had effectively put a floor under the Australian price.
Rudd 'ignorant' about economy - Costello
ReplyDeleteBy Sid Marris
PETER Costello has ridiculed Kevin Rudd as economically "ignorant" and accused him of creating a phoney crackdown on retail prices.
While Labor is trying to capitalise on discontent among some voters who feel they are missing out on the boom, the Treasurer dismissed the Opposition Leader's ideas as misleading and empty.
The Treasurer said Mr Rudd had announced something that was already being done, while pretending it was a new idea.
"This is Kevin Rudd at his ignorant best," he told the ABC's 7.30 Report last night.
Mr Costello took painstaking aim at Mr Rudd over price monitoring, saying it was already going on and emphasising his command of the detail of the price of staples.
He recited the price of bread, biscuits and baked beans in Sydney, Melbourne and Brisbane.
ACCC already taken action
Mr Costello said the Australian Competition and Consumer Commission, which Mr Rudd wants to force to monitor supermarket prices, had already brought actions over price-fixing such as over bread in 2003.
Last year, Woolworths paid a $7 million fine for anti-competitive practices.
"The monitoring is not the hard part; the monitoring is going on. The important thing is if the monitoring leads to evidence then the evidence has got to go before a court of law," Mr Costello said.
"This is all coming as a great revelation to Kevin Rudd."
Earlier, Mr Costello said the Australian Bureau of Statistics regularly released a survey of consumer prices and it showed that under the past 10 years of the Howard Government, prices rose 2.4 per cent a year compared with 5.2 per cent a year under the Hawke and Keating Labor governments.
"Here is a question for Mr Rudd," Mr Costello said.
"Does the price monitoring that the ABS is doing show that prices rise twice as fast under Labor as they do under the Coalition?"
Mr Costello's attack came as the Opposition Leader yesterday continued to broaden his economic pitch that ordinary Australians were not sharing in the boom because of rising grocery, housing and childcare prices.
But retailers and economists pressured him to provide evidence.
Consumer groups question price increases
While consumer groups said they welcomed an investigation into the market dominance of Coles and Woolworths, they noted that their own survey of a typical basket of goods showed prices had, since 2003, risen less than the official inflation figures.
Mr Rudd yesterday announced he would ask the ACCC to investigate retail prices and regularly publish survey results for consumers to compare.
But he admitted there was no clear evidence of exploitation by Coles and Woolworths, prompting Mr Costello to question his judgment.
Nationals senator Barnaby Joyce, who has campaigned against the control of the big two grocery giants, and Family First senator Steve Fielding challenged Labor to go further than an ACCC inquiry.
Senator Joyce accused Mr Rudd of having "a foot in both camps", saying he should move to ban predatory pricing outright: "He doesn't want to take on the vested interests, but he wants to appeal to the voter pushing their trolley."
Mr Rudd argued that household costs were rising in excess of inflation, making a mockery of John Howard's claims that people were better off.
"What this all means is that the dollar earned by Australian families is not going as far as it used to," he said.
"It means some may have to buy less, go without or draw down on their savings. Or worse, go into debt."
Labor to release more statistics
Adding to Labor's pitch, Opposition Treasury spokesman Wayne Swan will today produce analysis of census data that shows the number of families under mortgage stress - those paying more than 30 per cent of disposable income on repayments - almost doubled in the five years to 2006.
Woolworths chief executive Michael Luscombe yesterday said the company welcomed any policy announcements that would clarify and correct myths about supermarket pricing and competition.
He said Woolworths' own measures of inflation suggested prices, taken across thousands of lines, had grown 1.3 per cent in 2004, 2.2 per cent in 2005 and by 3.4 per cent in 2006, when banana prices increased sharply.
Mr Luscombe disputed the much-quoted statistic that the big two control 79 per cent of the market, saying the figure applied only to scanned items and did not include fresh food or goods sold from small independents or petrol stations.
The actual figure was 52 per cent: 29 per cent to Woolworths and 23 per cent to Coles.
Ria Voorhaar, a spokeswoman for the Australian Consumers Association, said dominance by the big two reduced the amount of discounting that went on and allowed prices to stay high.
But the ACA noted that a similar basket of goods tested in 2003 and 2007 showed a 12 per cent rise, compared with a 16 per cent rise in the consumer price index.
Adolf Hitler, John Howard nationalists, says Keating
ReplyDeleteBy Mike Steketee
PAUL Keating bought into election-year politics again last night with an attack on John Howard in which he portrayed him as a dangerous and divisive nationalist who manipulated Australia's best instincts.
The former prime minister used a speech to the Sydney Film School to deliver a discourse on the Prime Minister's culture and history wars that drew in Hitler and Margaret Thatcher - though he hastened to add he was not equating them.
But he portrayed Mr Howard, like Hitler, as a nationalist, rather than a patriot and he said that nationalism was "arguably more exclusionary than racism", with a propensity to stigmatise cultural, religious and linguistic attributes.
"Nationalism is, I believe, a dangerous and divisive tendency: its stock in trade is jingoism, populism and exclusion of the most calculating kind."
Labor colleagues will be relieved that Mr Keating did not repeat his recent attacks on them, instead concentrating his firepower on Mr Howard.
But Mr Keating is likely to come under attack for his portrayal of Mr Howard and his implied reflection on how Australian voters are being manipulated by him.
In a speech he titled Film and art in the Australia of nationalism and cynicism, Mr Keating said that when Mr Howard disparaged elites, he actually was disparaging cosmopolitan attitudes, as against the certainties of the old mono-culture and older-style nationalism.
"A cornerstone of nationalism is the propensity to call into question the motives or to attack the attitudes of other members of the national family.
"Indeed, Adolf Hitler, perhaps the exemplar populist, wrote explicitly on the subject in his Mein Kampf: 'I was a nationalist but not a patriot'.
"In Hitler's day, the term 'elite' had not yet arrived. But if it had, the nationalist in him would have compelled him to use it, for it's easy shorthand, if nothing else.
"Margaret Thatcher famously used the phrase 'for all of us', when at the time she completely meant 'for some of us'."
Mr Keating said Mr Howard's equivalent was the "we" he used when declaring in the context of refugees that "we will decide who comes to Australia and the circumstances in which they come".
"I say this not to suggest or to align in any way Margaret Thatcher or John Howard with Adolf Hitler," he added.
"To do so would be as unreasonable as it would be absurd.
"I use Hitler's words in this narrative only to make the distinction between nationalism and patriotism which he himself made.
"For importantly in this context, he was the 20th century's leading nationalist - its leading anti-patriot."
As for Mr Keating himself, he declared himself a patriot - a word that "encompasses all that is traditional, inclusive and cosmopolitan".
"The nationalism surrounding the First World War and Gallipoli in particular has fuelled the Australian conservative story for nine decades - the same nationalism which prevented the conservative parties from similarly celebrating Australian heroism in Papua New Guinea and Southeast Asia.
"Those Australians fought for all we had created here and become, not for some notion of a ruling class or people's community, let alone an empire.
"It is no coincidence at all that a predecessor party of the current Liberal Party called itself the Nationalist Party.
"These days, the conservative rural rump which once called itself the Country Party now calls itself the National Party.
"Different families of leopards but always with the same spots."
He said the Howard years had been deadening to the arts, and encouraged filmmakers to resist "the arid philosophy (that is) part and parcel of John Howard's Australia".