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Tuesday, 20 September 1994
Page: 966


Senator PANIZZA —My question is directed to the Leader of the Government in the Senate. Will the minister please explain what steps the government is taking, or intends to take, to prevent excessive retail price increases in basic food stuffs in the name of the drought, given that at current wheat prices of around $160 a tonne there is only 12c worth of wheat in a 750 gram loaf of bread—


Senator Collins —We can't fix prices.


Senator PANIZZA —I know that. Senator Collins should listen to the question. If the price of wheat rose dramatically to $200 a tonne, there would still be only 15c worth of wheat in a 750 gram loaf.


Senator GARETH EVANS —As Senator Panizza should be well aware, the Commonwealth has no direct constitutional competence to regulate prices. The honourable senator might ask his mates in the states, the rights of whom he is so keen about on these occasions, to actually do something more specific if they feel that there is a cause for concern here. What we do have is the continued operation of the Prices Surveillance Authority mechanism. It may be that this is an appropriate area for particular monitoring or scrutiny activity to take place so far as that authority is concerned. I will draw this matter to the attention of the appropriate minister and see what might be thought appropriate in this respect. I do not know whether there is practical ground for concern in this respect or whether this is just a spectre that has been dreamed up. If there is a ground for concern, we will do something about it through that only available mechanism we have.


Senator PANIZZA —Mr President, I ask a supplementary question. As I pointed out to Senator Collins, my question was not about price fixing; it was about retailers using the drought as a reason to increase prices when there is no real increase in the price of ingredients. As it does in cases which are to its benefit, the government could use its publicity machine to point that out.


Senator GARETH EVANS —That is one of the things that the PSA is about: determining whether any price rise—whether it is imposed by a retailer or someone further back down the chain—is in fact justified in terms of the cost of input, profit margins and all the rest. If that is the nature of the concern Senator Panizza has, as to whether particular retail price increases would in fact be justified if they were purported to be linked in some way to drought conditions, that may be an appropriate thing for the PSA to look at. I think it is certainly within the ambit of its authority. Whether, as a practical matter, there are sufficient grounds for concern about this to justify some special effort being made, I am not sure. I will seek advice on that and give Senator Panizza a further answer.