Rorts and Rip-Offs

Australia is a costly place to live. We all know that, but most of us don’t understand why.

After all, we have abundant food and natural resources, seas filled with pure protein and marvellous weather for growing all sorts of crops. 

And yet, our food prices are outrageous. 

I was talking with friends yesterday who had returned from the UK.

They told me I could buy an Australian Pineapple in a London supermarket for under a pound - around $2. Here, a Pineapple costs twice that. 

A kilo of tomatoes was a third of the cost here. Bread was a dollar a loaf; I could go on.

In regional SA, I was paying nearly $10 for ten large eggs and was told there was a shortage of eggs, so they had to be rationed to just one carton per person. 

Few can explain precisely why this is the case.

Sure, we are a high-taxing country, and our wages drive the price of everything sky-high, but there’s more than that.

Our supermarkets, for example, have some of the highest profit margins in the world. 

Coles and Woolworths have consistently expanded their profit margins while we are going through a cost of living crisis. 

Their operating margins are 5.3% and 5.9% respectively. In the UK, the equivalent supermarket chains, Tesco and Sainsbury, are 3.8% and 3%, respectively. 

So, Aussie supermarkets operate at between 60% and nearly double their international counterparts' margins. 

That’s because there’s a cosy duopoly operating in this country where the two big supermarket chains dictate terms and the trading success of many suppliers.

The exception to the duopoly is Aldi, which has an 11% market share and, in my experience, lower prices.

Then, there’s another element that impacts your weekly shopping bill. Theft.

The National Retail Association said that retail crime - shoplifting, theft and vandalism costs Australian businesses over $9 billion annually. 

Incredibly, less than 20% of these crimes are reported to police. 

I’ve seen it for myself. At a local Woolworths, I saw groups of youths walk out of the store laden with goods they hadn’t paid for. There was no attempt to hide the crime, and no staff sought to intervene. 

That same day, I saw a lone man walk out with a trolley load of goods he hadn’t paid for, and when a security officer intervened, he abandoned the cart in the street and ran off.

It was reminiscent of the lawlessness and looting in places like California, where theft is effectively decriminalised and rampant. 

Quite why some people think the law doesn’t apply to them is beyond me, but given the attitude of many in positions of authority, they could be excused for doing so.

I’ve heard myriad excuses, from poverty to cultural issues, excusing this criminal behaviour.

That’s rubbish. We have plenty of services and safety nets in this country. No one has to steal to survive. They do it because they spend our welfare and financial support on other things…and because they know they can get away with it.

But it’s not just from the lower socio-economic spectrum that we are being ripped off.

When I was in politics, I regularly raised the ripoffs of government programs and social support services.

One of those exposes was defrauding the private health insurance system.

Back in 2006, It was adding around $800 million to the cost of insuring your health (about $250 per private health policy) and yet the crooked medical practitioners were getting away with it with next to no sanctions.

Sure, sometimes they’d have to pay back the hundreds of thousands of dollars they deliberately ripped off, but they still stayed in the system.

After I gave that speech, a representative of the Doctors Union - the AMA - came to see me to complain about the content. In doing so, he admitted that medicare fraud cost the system around 10% of the medical budget annually. 

To estimate how much that is, the medicare budget this year is more than $30 billion if the theft numbers are the same, more than $3bn is being rorted by trusted professionals. 

That was worse than the benefits leakage - that's the benign description of medical insurance fraud - I had identified.

I have no confidence this has diminished, but no one wants to discuss it. 

Nor do they really want to talk about the billions in identified rorting of the National Disability Insurance Scheme. That’s costing us billions in rip-offs, but there’s only lip service made to cleaning it up.

The reason for that is, that if the true extent of the scandalous scams attached to the NDIS were exposed, then the entire program's credibility would be questioned. 

It would also entail the government making decisions that would directly impact some people living with a disability and their carers - not because they are doing the wrong thing, but because the system as it's currently operating is a black hole of mismanagement and poor design. 

So there are three areas where there are potentially tens of billions in rorts and ripoffs that we are all paying for. 

If you could eliminate them, our economy, consumers and taxpayers would be billions better off. 

The question is, what’s being done about it?

Commercial theft is essentially going unpunished, as is the stealing from taxpayers through government programs. 

Sure, there are some exceptions, but too many are ignoring a growing problem that the country can ill afford.