Andrew Leigh likes to portray himself as a serious economist, yet here he is, slithering around as Labor's pathetic mouthpiece, shamelessly spruiking the Albanese government's latest con job on so-called "supermarket price gouging."
This policy is a cynical fraud, a deliberate deception designed to fool Labor's and the Greens' gullible, economically illiterate supporters while desperately trying to distract from the fact that Australia has suffered one of the highest inflation rates in the developed world under this rotten and failing Albanese regime.
So what is the case for this legislation that supposedly bans "supermarket price gouging"?
There are literally tens of thousands of products on supermarket shelves. Can Andrew Leigh (or anyone in Labor) name just one product sold during the last five years that this legislation would classify as being sold at an "excessive price"? Just one. Of course, they can't.
And while they're at it, perhaps they could explain exactly what constitutes a "reasonable profit margin"? Because the entire scheme is deliberately vague and meaningless bureaucratic nonsense. But this legislation is not just a harmless stunt. It will result in real adverse consequences that will make things worse.
This legislation is dangerous because it reinforces the false belief and delusional ideology that governments can simply legislate prices lower. It is economic illiteracy masquerading as public policy.
As Adam Smith famously observed:
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Higher living standards and lower real prices are achieved when businesses relentlessly compete for customers (in regard to their own interest, in search of higher profits) by becoming more innovative, more productive, and more efficient, not through Labor meddling, politicians issuing press releases, and creating more bureaucracy.
It is competition that disciplines prices. It is competition that squeezes margins. It is competition that incentivises efficiency, which lowers costs and reduces prices. Government regulation does not.
Yet Labor actively protects the Woolworths/Coles duopoly because both companies employ large unionised workforces, and those unions remain among Labor's biggest financial backers. That's the dirty truth. That's the political reality of a corrupt Labor Party.
If Labor genuinely wanted lower supermarket prices, they would slash the mountains of red tape and planning restrictions that prevent new competitors from entering the market. Instead, they do precisely the opposite.
Remember a few years ago when German supermarket giant Kaufland attempted to establish itself in Australia? The company invested more than half a billion dollars acquiring land, employing staff, and building distribution networks to challenge the existing duopoly. Then it abandoned the project altogether. It walked away, writing off its investment, citing Australia's burdensome and costly regulatory environment. The stock market immediately understood the significance.
When Kaufland announced they were cutting their losses and abandoning Australia, the combined market value of Woolworths and Coles increased by around $2 billion in a single day.
The market understood perfectly: the withdrawal of a new competitor in the supermarket sector meant fatter margins for the incumbents. Less competition. Higher margins. Higher prices for Australian consumers.
The fundamental reason Australians pay more for groceries is not a lack of government regulation. It is too much government regulation that discourages new entrants and protects existing market power. Yet Albanese's answer to excessive regulation is... even more regulation.
With this latest stunt by the Albanese regime, who is going into invest their capital into a highly regulated market where some government bureaucrat (hoping for a reward of protecting the union dominant supermarket duopoly) can demand to go through your books to determine if you are charging "excessive prices" with threats of a fine of $10 million or 10% of your annual turnover during the preceding 12 months?
The result of Labor's legislation will be less investment, fewer competitors, and ultimately higher prices. Classic Labor... claiming to fix a problem they created, only to make the problem worse. But the Albanese government's protection of the supermarket duopoly doesn't stop there.
Only last week, "Blackout Bowen," now known as "His Excellency" Chris Bowen, in between jetting off to Europe as "Mr President" of the next climate junket in Turkey, announced that taxpayers would gift Woolworths (funnelled through a gaggle of grifters and spivs) $22 million to purchase 148 small electric delivery trucks. That works out to almost $150,000 per truck. Yet the advertised list price of these Chinese-made electric trucks is $153,395 each. Surely even the incompetence of Chris Bowen could negotiate a fleet discount buying 148 trucks to get the price under $150,000 each. Therefore, Australian taxpayers are effectively giving Woolworths an entire fleet of free trucks. That is corporate welfare on a breathtaking scale.
Not only is that a huge scandal on its own, but now what rational investor is going to commit hundreds of millions of dollars to establish a new supermarket chain capable of competing with Woolworths and Coles when they know the Albanese regime is prepared to hand taxpayer-funded subsidies worth tens of millions of dollars to the incumbent market leader to provide them with a fleet of free trucks? This is exactly how corrupt socialist governments entrench monopolies and discourage competition.
That is the Albanese government's economic model in a nutshell: create the distortion, subsidise the insiders, burden potential competitors with more regulation, and then blame "price gouging" for the inevitable consequences.
Labor's "excessive prices" legislation is nothing more than another dishonest political stunt designed to distract from the inflation crisis its own policies have helped create. It is economic vandalism wrapped in populist rhetoric. Australia deserves far better than this dishonest, economically reckless government.
The more puzzling question is this: Where is the Coalition, Australia's supposed official opposition? Why isn't anyone from the Coalition out exposing this latest Labor con job and explaining to Australians why more regulation, more subsidies, and more government interference will only deliver higher prices, less competition, and a weaker economy?
No wonder One Nation is surging in the polls.
Thought for the Day
“The price of monopoly is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken.” – Adam Smith
I’m a journalist, former politician, Christian, and campaign director for CitizenGO Australia. My mission is to challenge the media lies, government overreach, and corporate censorship that threaten our freedoms.
It is ironic that politicians such as Pat Conroy seek to smear Menzies as a "Nazi appeaser", while it is the modern left that supports expanding government control over public debate.
