Australia's Prime Minister Anthony Albanese vowed on Sunday to outlaw supermarket price gouging with the threat of heavy fines, as he campaigns ahead of the closely contested May 3 general election.

The proposed crackdown on supermarkets, along with an unexpected income tax cut, is part of a series of government initiatives aimed at easing cost-of-living pressures, a key concern for voters.

Recent polls indicate a tight race between the centre-left government and the conservative opposition.

"Australians deserve a fair go at the checkout. We will hold the big supermarket chains to account," Albanese told reporters, pledging to introduce legislation within the year.

"Price gouging is when supermarkets are taking the piss," he added.

'Heavy fines' to come

Asked how violations would be handled, Albanese said, "Heavy fines to make sure that they know that if they're ripping people off, then they're in the gun to pay a heavy penalty."

The government plans to establish a task force comprising representatives from the Treasury, competition regulators, and consumer groups to address the issue. Albanese noted that Australia was examining overseas models, including those in Britain and the European Union, for regulating unfair pricing practices.

Australia's grocery sector is among the most concentrated in the world, with Coles and Woolworths dominating the market and exerting significant influence over pricing for both consumers and suppliers.

'Limited incentive to compete'

Competition regulators reported this month that the two major retailers had been increasing profit margins and had "limited incentive to compete vigorously with each other on price."

James Paterson, a senior member of the opposition Liberal Party, criticized Albanese for failing to define price gouging. "We are very happy to make price gouging illegal," he told public broadcaster ABC.

However, the opposition also plans to introduce targeted divestment powers, which could be used as a "last resort" if supermarkets abuse their market power, according to opposition leader Peter Dutton.

Dutton had proposed cost-of-living measures, including a one-year cut to gasoline tax and a scheme requiring gas producers to reserve a portion of output for the domestic market.

Election impact

Annual consumer price inflation stood at 2.4% in the final quarter of 2024, down from a peak of 7.8% in 2022.

A YouGov poll released Sunday showed support for the ruling Labor Party and the conservative opposition coalition nearly tied, with Labor at 50.2% and the opposition at 49.8% on a two-party preferred basis.

If reflected in the election, these numbers would result in a hung parliament, with Labor falling one seat short of a majority. However, the survey suggested that the government would still be in a "strong" position to remain in power.