The Australian Prime Minister has announced a 12-month price inquiry into the supermarket industry, to be conducted by the Australian Competition and Consumer Commission (ACCC).

The inquiry will scrutinise the impact of online shopping, loyalty programs, and technology changes on competition within the supermarket industry. The government will also fund consumer organisation CHOICE to provide shoppers with clear information on supermarket performance. This inquiry follows a senate inquiry into supermarket pricing and claims of price gouging.

The review was revealed during the Prime Minister's National Press Club address today to also detail Australia's new tax cuts. Prime Minister stated the ambition of the inquiry, which several across the political divide have been asking for, was to promote transparency, enhance competition and drive value.

"The ACCC has significant powers - and it is the best and most effective body to investigate supermarket prices. To look at how things like online shopping, loyalty programs and changes in technology are impacting competition in the industry," he said. "And to examine the difference between the price paid at the farm gate - and the prices people pay at the check-out. For me, it's this simple. When farmers are selling their product for less, supermarkets should charge Australians less."

The inquiry comes hot on the heels of a mandatory review of the Food and Grocery Code of Conduct, due for renewal by 1 April 2025. The review is being overseen by former Labor cabinet minister, Craig Emerson. It's also coinciding with a Senate inquiry into whether supermarkets are price gouging.

The ACCC welcomed its appointment to examine the pricing practices of supermarkets and the relationship between wholesale and retail prices.

"We know grocery prices have become a major concern for the millions of Australians experiencing cost of living pressures. We will use our full range of legal powers to conduct a detailed examination of the supermarket sector, and where we identify problems or opportunities for improvement, we will carefully consider what recommendations we can make to Government," ACCC Chair Gina Cass-Gottlieb said.

ACCC Deputy Chair Mick Keogh added, the inquiry will examine the nature of the current competitive environment between supermarkets, as well as the barriers to greater competition and new entry in the sector.

"We believe we are well placed to conduct this broad-ranging inquiry and will bring to bear our expertise in competition, consumer law, agriculture and the supermarket sector in particular," he said.

The ACCC plans to publish an issues paper in February and provide an interim report to the government later this year. The final report is due early next year.

The inquiry was announced alongside the Federal Government's plans for new tax cuts, designed to provide bigger tax cuts for middle Australia to help with cost-of-living pressures. Positioned as making the tax system fairer, the proposed tax cuts will see all 13.6 million Australians paying taxes benefit from the changes - albeit not at the same levels as promised under the original stage 3 tax cut changes for those in the top highest income brackets.

At a top-line level, the changes from the next financial year see the Government maintaining a 30 per cent tax rate on each dollar earned between $45,001 - $135,000, rather than a 32.5 per cent rate, and increasing the threshold from $120,000 to $135,0000. It's then retaining a 37 per cent tax rate for earnings between $135001 - $190,000. It then has a 45 per cent tax rate on each dollar earned above $190,000, an increase from the $180,000 figure under the former proposed structure.

It's also reducing the 19 per cent tax rate to 16 per cent (for incomes between $18,200 and $45,000). In addition, the Government will increase the Medicare levy low-income thresholds for 2023-24.

The changes to the personal income tax system will have a net cost of $1.3 billion over the forward estimates. The total impact of these tax cuts is expected to be $107 billion over the forward estimates. The increase to the Medicare levy low-income thresholds is expected to cost $640 million over four years from 2023-24.

"Our tax cuts are good for middle Australia, good for women, good for helping with cost-of-living pressures, good for labour supply and good for the economy. Cutting taxes for middle Australia is a central part of our economic plan - along with getting wages moving again, bringing inflation under control and driving fairer prices for Australian consumers," the Government said.