Interview with Stephen Cenatiempo, 1206 2CC Canberra

STEPHEN CENATIEMPO: Alright, let’s talk a bit of common sense with two politicians that hopefully don’t engage in this kind of conduct. Our federal pollie panel today, the Nationals leader and Member for Maranoa, David Littleproud with us. G’day, David.

DAVID LITTLEPROUD: G’day, mate.

CENATIEMPO: And Kristy McBain, Minister for Regional Development, Local Government and Territories and the Member for Eden-Monaro. Good morning, Kristy.

KRISTY MCBAIN: Good morning, Stephen. I thought you were about to introduce David and I as two more muppets.

CENATIEMPO: No, no, no. Look, I’m always – look, and I’ll give you guys credit here. I’ve always said that when it comes to Australian politics, most of the A graders go into federal politics, the B graders go into State politics and in the ACT it’s the Z graders. Now, I’d say that’s now – and, look, I apologise for saying this, but I think it’s now B, C and somewhere below Z. But moving right along, I’ll give you guys A grades for the moment.

LITTLEPROUD: We’ll take it.

MCBAIN: Let’s see what happens at the end, hey, David?

LITTLEPROUD: Yeah, yeah, let’s not get carried away.

CENATIEMPO: David, you’ve called on the ACCC to investigate supermarket meat prices. Now, I understand where you’re coming from here, but from what we understand, meat prices at the farm gate are coming down, they’re certainly not coming down for consumers, but in the current cost-of-living crisis and inflationary circumstance we find ourselves, surely the supply chain is adding to the price of meat?

LITTLEPROUD: Not as much as what we’re seeing from the fall in cattle prices and sheep prices. They fell off a cliff about six months ago. They were getting about $11 a kilo. They’re down to $3 at the moment and we’re still seeing a rump steak at around $36 a kilogram. Now, for grass-fed, that should have translated - within that six months, it should have translated within a week or two after those prices fell. For grain fed, got to acknowledge, it takes about 90 days for that to wash through because they’re on feed for 90 days, there’s contracts for the grain and the cattle, but those prices should have been passed through already and the fact they haven’t means someone’s cleaning up.

Now the processing sector has got higher energy costs at the moment, and they’ve also got a lack of labour that’s also meaning they can’t process as many, but it’s not to the scale that we’re seeing. We’re seeing a 70 per cent reduction in cattle prices and an 8 per cent reduction at the checkout. Now, that’s where the ACCC needs to reach in and do some price monitoring on this and actually understand who is actually gaming the system here.

I think the pressure always comes from the top. This mob, the supermarkets, Coles and Woolies, have got form on this. They were found after COVID, after they announced their profits by the former ACCC chair, to say that they were gaming the system, they took advantage of us, and I think it’s important now that they do this. The Government’s announced a competition review and that’s – we support that and that’s a good thing. But this is different to a competition review. It’s actually a more micro granular review into the prices of a particular product, and we just think that would give some transparency.

CENATIEMPO: So, what should a rump steak cost at the moment?

LITTLEPROUD: Well, mate, if it’s costing around $3, you shouldn’t be paying $36, it should be down well into the low 20s, I would have thought. But to pay $36, that’s a fair bit. That’s a lot of mark up and that’s a lot of energy and that’s a lot of costs at the processing sector. And I don’t think the processing sector is necessarily totally to blame for this. I think it starts at the top and I think the supermarkets have been putting the pressure. We saw with the dairy industry, they put pressure from the top and they put it through the process right through to the farm gate. And I’ve already reached out to Andrew Leigh, the Competition Minister, on broader competition policy to work collaboratively with the Nationals, on actually big punitive penalties.

If supermarkets do something wrong at the moment, they only have to pay a bill of $64,000 under the Grocery Code of Conduct. We think the minimum should be about $10 mil and some divestiture powers whereby if they lost some Dan Murphy’s along the way because they hurt farmers or the consumer, well they’d soon make sure there’s transparency of pricing. So, the Government’s looking at that and I’ve made it clear to Andrew Leigh, the Nationals would be prepared to walk hand in hand with them if he was to bring forward any changes.

CENATIEMPO: Kristy, that’s a fair call, isn’t it? I mean, we know that the duopoly when it comes to the supermarkets has had far too much power for too long and as somebody who represents a regional electorate it probably hurts your constituents more than it hurts people in the cities?

MCBAIN: Absolutely. There’s obviously a lack of choice in our regional communities when it comes to supermarkets. Obviously, we try to support our independent butchers more than we try to support our supermarkets when it comes to shopping. We expect that all companies should treat their consumers fairly. As David said, we’ve launched a competition review which will look particularly at cost-of-living issues because no company should be trying to game consumers during what is a really difficult period across the world. It’s really important, as part of that, to undertake a review of the food and grocery code to assess how effective that code actually is and how it has been dealing with the improving relationships between supermarkets, consumers and producers. It’s really important that system works and if it doesn’t, it absolutely needs to be looked into.

CENATIEMPO: But if David’s right and it starts from the top, why aren’t independent butchers’ prices coming down?

MCBAIN: There are clearly some supply chain concerns in all of this as well. We know fuel has gone up because of the illegal war in Ukraine. We know energy prices have gone up. There is a lack of labour in the market. It’s important that all of these things are looked at, as part of the process.

CENATIEMPO: David, you’ve called for mandated mobile roaming following the Optus outage. Explain to us what that means.

LITTLEPROUD: Yeah, so last week when those that had Optus phones couldn’t use them, what happens with mandated roaming is that effectively you can walk underneath a Telstra tower or a TPG tower and you will be able to use it. Now, the telcos are now, after fighting me since 2016 when the ACCC last looked at this, they’re now saying well this may be a way to build redundancy into our telecommunications system.

Now in the capital cities, I’ve got to acknowledge that’s going to be a bit of a big stretch just to start with. There’s some capabilities – if you had of put 10 million customers on to Telstra and TPG on Monday or Tuesday last week, it would have struggled to hold up. But you need to build that capability in the meantime. But why don’t we roll it out in rural, regional, and remote Australia whereby we, as taxpayers, have put up over 1,500 new mobile phone towers, some of which are Optus, some are TPG, and some are Telstra, and for us in the bush, you can’t use all of them. So why wouldn’t you just say, use some common sense and say let’s bring in some roaming, let’s start it in regional, rural, remote Australia, prove the concept up, which already works around the world, and I’ve always said to Telstra, I’m not asking you to do this for nothing. I understand you’ve made some investment, too, and I’ve said that to all the telcos, but tell us what it is a month. If it’s a $1 a month, $2 a month that we get to decide whether we want roaming or not, why wouldn’t you have it?

And then we are now looking at, after the ACCC have said we should do this for disasters, have it for emergencies. But this just makes sense in a country as big as ours and the investment the Australian taxpayers made in telecommunications assets, that we should have roaming. Let’s prove the concept in regional, rural, and remote Australia first and bring it into the cities so we’ve got redundancy into our telecommunications system, and I think the Optus fiasco last week just proved that.

CENATIEMPO: Kristy, that makes a lot of sense, doesn’t it? And I understand what David’s saying about the cities, but when you look at the Optus outage last week, if you’re in the city you’d be able to find yourself an ATM to get yourself a bit of cash out and at least use that. Whereas in the bush, you’re not going to find a bank branch or an ATM nearby so you’re at the mercy of these phone companies. I think it makes perfect sense to roll it out regionally where it’s not going to have that much impact on the infrastructure.

MCBAIN: Last week’s Optus outage was a ridiculous situation where a technical upgrade caused pain for over 11 million customers Australia-wide. That included many small businesses who were unable to trade for a day. Family and friends who were unable to get in contact with loved ones. People who didn’t know what was going on with their kids at school. It’s really important that lessons are learnt from what happened last week so that this doesn’t happen again.

As David said, the ACCC’s just completed an 18-month inquiry into regional mobile infrastructure and found that roaming is technically possible and we should absolutely look at it. I know the Minister for Communications has welcomed the inquiry and is now looking at the findings and has tasked their Department to follow up with mobile roaming and the findings of that inquiry, on top of what’s happened with Optus last week. We don’t want to be in a situation where we know in 2023, communication is an absolute necessity, to not have access to a mobile phone, to an electronic payment option, it’s ridiculous.

CENATIEMPO: There’s another issue I have here, and this is something I’m happy to give both of you on notice, but cash is still legal tender in Australia but yet businesses are allowed to not take cash. I mean, surely, we’ve got to force businesses to accept legal tender?

LITTLEPROUD: Yes, mate, I agree. In fact, I was out in Blackall in outback Queensland last weekend, it’s the other way around out there, mate. The businesses just say it’s cash only. Never go out to the bush without cash, the folding stuff in the pocket otherwise you don’t get anything. So it is still legal tender. I know there’s been trends, demographic trends where people aren’t using it as much. But it is a legal tender, it’s important that we have it and I’m supportive of it and particularly in my parts of the world, we still use a lot of the folding stuff and businesses want it.

CENATIEMPO: Kristy, I imagine it’s probably the same in your neck of the woods?

MCBAIN: I was going to say, you won’t get an argument from me. Cash is the legal tender and I, for one, try to use it and I know my husband absolutely does. It’s what businesses want.

CENATIEMPO: He does it so you don’t know what he’s doing with his money.

MCBAIN: There may be another reason, Stephen. It’s really important. Businesses don’t get charged fees when people pay in cash and it’s really important we support our local small businesses as best we can and the best thing we can do to help them at times is paying cash. They don’t pay bank fees to accept that.

CENATIEMPO: Now, Kristy, tell us about these unfair contract terms reforms that have taken effect in the last week or so?

MCBAIN: It’s really important we continue to back small businesses. Dealing with these unfair contract terms, which usually big businesses force on small businesses. Unfair terms like unilaterally being able to change the prices, or clauses that allow for immediate termination of contracts without reason. It’s important that we outlaw those take-it-or-leave-it contract terms, and we continue to support small business, because we know it’s tough in the environment out there and we don’t want to see big business taking advantage of our small businesses that are the backbone of the economy, especially in regional Australia.

CENATIEMPO: Now David, I don’t want to pre-empt your response here, but this might be the first day that we’ve ever had you two on that you’ve agreed on everything.

LITTLEPROUD: Well, mate, it is. In fact, this is a legacy of one of the last things I did as Agriculture Minister, is it’s come out of what we call the perishable goods inquiry that I asked the ACCC to do, because they were stitching up the horticulture sector, the dairy sector and even the meat sector, chicken meat. So out of that recommendation, which we got back in, I think it was March or April, just before the federal election, was this actual recommendation. So we actually congratulate the government for finishing off those. It was four recommendations and that was one that we hadn’t finished off because it did require a little bit more work, and the government’s followed through on that.

So, our unity ticket today, we’re really happy with that. And that’s where we think if you complement this now with reforms to the grocery code of conduct with big penalties, you really have something to keep the regulatory guiderails of these big supermarkets who have 74 per cent of the grocery market here in this country under control, and you’re protecting not just little farmers but small suppliers as well. And the grocery – Coles and Woolworths, if they believe they’re doing the right thing, they should sign up to all this stuff and actually the reforms, I think both sides of Parliament want to put in place, because if they’re doing nothing wrong they will never get hit with these penalties. So, let’s look at the colour of these people’s eyes rather than their profit bottom line. So, a unity ticket on this one and really, a legacy piece. We’re really happy that the Government’s actually finished off on so good on them.

CENATIEMPO: First time for everything. Kristy McBain, David Littleproud, good to talk to you this morning.

MCBAIN: Thank you.

LITTLEPROUD: Thanks, mate.

CENATIEMPO: All the best. Back with us in a fortnight’s time. David Littleproud, the Nationals’ leader, and Kristy McBain, the Minister for Regional Development, Local Government, and Territories.