Extract from AFR editorial
"Tuesday’s echo of this was all political theatre – and an abuse of parliament’s powers – not a good-faith effort to garner information relevant to relieving the cost-of-living pressures on Australians.
The extended confrontation with Mr Banducci was exposed as a gotcha set-up when Senator McKim revealed the supposed “smoking gun” – that Woolworths’ 26 per cent return on equity last year was twice that of Australia’s “rapacious” big banks.
Tipped off by Mr Banducci’s interrogation, Ms Weckert coolly explained that rather than Coles’ 31 per cent return on equity raised from shareholders over multiple years, the better indicator of profitability was returns on investment from equity and debt capital, which was about 10 per cent for Woolies and 15 per cent for Coles last year.
Populist fake news
The Productivity Commission’s assessment of the supermarket industry is that “in short, two large players with a competitive fringe have provided a highly competitive market in Australia”.
Yet Senator McKim’s populist fake news blames high inflation on the supermarket duopoly’s “captive market”, price gouging of consumers and fresh fruit and veg suppliers, and “making off like bandits” with supposed super-profits.
The real cause of inflation is the massive pandemic fiscal and monetary stimulus that is still spilling over broken global supply chains along with the high cost of the clean energy transition.
As with other labour-intensive service industries, the supermarkets’ cost base has been ratcheted up by the Fair Work Commission’s double-digit increase in the economy’s minimum wage floor.
As for market concentration and lack of competition, Mr Banducci explained to Senator McKim that Woolies’ national pricing of packaged goods means the benefits of price-matching competitors such as Aldi in Melbourne flow through to Tasmanian customers at the checkout.
Senator McKim is to cost-of-living pressures what the Greens’ housing spokesman Max Chandler-Mather is to the housing crisis, pandering to inner-city NIMBY-ism. Mr Chandler-Mather claims that the housing unaffordability problem is all caused on the demand side by negatively geared investors – such as Senator McKim, who owns two investment properties – and not by supply-side state and local government planning restrictions on higher density housing.
Treasurer Jim Chalmers on Wednesday rightly chided Senator McKim’s “confected outrage” as having no real answers for the inflation challenge.
Yet it is only Labor’s backing that enabled the Greens-initiated inquiry-cum-show trial of the big supermarket bosses to go ahead.
The treasurer reportedly will announce measures in next month’s budget designed to attract mobile global risk capital to Australia to help advance the government’s various energy transition, green manufacturing and other initiatives.
The question thatforeign capitalwould now be justified asking is: why risk investing in a country where political freak shows in Canberra threaten to lock executives up on the whim of a far-left senator sprouting neo-Marxist anti-big business conspiracy theories?"
I would object to the characterisation of McKim as a marxist.
Self serving ignorant showman who really doesn't care much about ordinary folk.
Marx was brilliant in his description of societies , but his solutions are too extreme for us fallible humans to execute.
That is not to say that a shift further away from dog eat dog economic ''rationalism'' isn't possible or sensible.
