The Price Tag of Socialism

While market competition and cost-of-living relief are urgently needed, the Greens’ proposal for state-run supermarkets and price caps is economically flawed and infeasible.

Instead, One Nation supports increasing competition by funding the ACCC to investigate and prosecute restrictive trade practices, dishonest advertising, and unfair competitor advantages used by major supermarkets (Coles, Woolworths, Aldi). We propose shrinking government waste and passing those savings directly to Australians through tax cuts.

State-run supermarkets historically fail.

Will the Greens’ proposal to acquire existing Coles and Woolworths sites offer fair compensation, or will they rely on state acquisition tricks similar to what John Howard used to steal farmer’s property rights in the past?

Supermarket profits (around $1 billion combined from $100 billion in sales) represent a thin profit margin on actual sales. A 1% reduction in retail prices would completely erase those profits. And the Greens’ promise of a 30% price reduction is mathematically unrealistic without massive taxpayer subsidies, which ultimately will require raising taxes.

While the Greens’ policies will add to your cost of living through higher taxes, One Nation’s policies will put more money back in your pocket, delivering genuine, lasting cost-of-living relief.

Transcript

Senator Roberts: This motion is two-thirds of a good idea. Yes, the Colesworth duopoly needs competition. One Nation would do that, funding the ACCC to investigate and prosecute restrictive trade practices in the industry used for the market advantage of Coles, Woolies and Aldi, including supplier agreements, side agreements, rebates, dishonest advertising and disadvantaging competitors, sweetheart union agreements and government policy designed to damage small and medium competitors. Secondly, yes, everyday Australians desperately need cost-of-living relief. One Nation would do that, shrinking the government to fit the constitution, as we said, in early 2025, eliminating government waste and duplication, then passing on the savings in the form of tax cuts, with more people keeping more money of their own. That’s One Nation’s way. 

It’s the third part that One Nation opposes: a government run supermarket. With this policy, the Greens looked across the Pacific to New York and its communist mayor, Mamdani, and thought: ‘You know what? We’re going to try to run state run supermarkets.’ That’s always failed badly. And price caps have been another disaster wherever they’ve been tried. At least Mamdani is building his supermarket. The Greens just want to steal Coles’s and Woolies’s existing sites. Mamdani doesn’t open his first supermarket until next year, and already the Greens are declaring the idea a winner. There’s no talk of just compensation, because it’s against the federal constitution, so I assume the Greens will use state governments for acquisition—the same trick John Howard used to steal farmers’ property rights to comply with the UN Kyoto protocol. Strange bedfellows, indeed! Supermarkets are low-margin operations. Yes, they’re getting greedy, and this is where One Nation would step in, as I mentioned. The $2.1 billion figure is not accurate. The figure includes all divisions: supermarkets, variety stores, pet stores, liquor, property, hotel businesses, and online and loyalty programs in Australia and New Zealand. Coles has funds employed—the investment to build and run supermarkets—of $12 billion on a 12 per cent return on investment. Woolworths has $19 billion invested on a 17 per cent return on investment. Those are healthy returns and suggest more competition is needed—not much, though. The actual $1 billion or so in profit that ‘Colesworth’ makes from supermarket sales comes from around $100 billion in annual sales. A one per cent reduction in prices would wipe that out completely. Are the Greens promising to subsidise their supermarkets with taxpayers’ money? If so, be honest about it. How much will be needed, and whose taxes will you put up to pay for it? The most this idea will save is between one and two per cent. The Greens are promising a 30 per cent saving. It just doesn’t add up.