Prime Minister Anthony Albanese will on Tuesday put the supermarket giants on notice over their "dodgy practices".
"We don't want to see ordinary Australians, families and pensioners being taken for a ride by the supermarkets, and we're taking steps to make sure they get a fair go at the checkout," he said.
The $A30 million ($NZ52 million) of extra money will help the Australian Competition and Consumer Commission (ACCC) complete more investigations and enforcement.
It will aid the commission in monitoring behaviour and investigating concerns about falsely justifying higher prices.
Treasurer Jim Chalmers will also work with the states and territories to reform planning and zoning regulations to make the supermarket sector more competitive by opening up more sites for new stores.
"We're taking decisive action to help Australians get fairer prices at the supermarket checkout, in stores and online," he said.
"More funding for the ACCC will help to make pricing fair, boost competition and make sure that there are significant consequences for supermarkets who do the wrong thing."
Current planning regulations are being viewed as a barrier to competition by stopping business entry and expansion.
Households have been struggling under the weight of cost-of-living pressures as inflation sticks and mortgage repayments remain high.
Labor is hoping hip-pocket pain will be relieved through the Reserve Bank cutting rates ahead of the federal election, due to be held by May 2025.
The ACCC announced last week it was taking legal action against Coles and Woolworths for allegedly misleading customers through discount pricing claims.
The government also released for consultation a new mandatory Food and Grocery Code, which would impose multimillion-dollar penalties on companies for serious breaches.
Land banking in sights
The crackdown on land banking by supermarket giants will lead to more competition and better prices at the checkout, the Treasurer says.
Jim Chalmers said the federal government would work with states and territories to prevent supermarkets from hoarding land.
It follows concerns supermarkets were land banking, where a company purchases a vacant block with no intention of developing the site, in order to stop a competitor from using the location.
"This is all about ... more sites for potential competitors to the big supermarkets, we want to make sure that people are getting a fair go at the checkout," Dr Chalmers told reporters in Canberra on Tuesday.
"I'll also work closely with states and territories to progress reform of planning and zoning regulations as fast as possible so that we can boost competition in the supermarket sector by opening up more sites for new stores."
An interim report into the supermarket sector by the ACCC said the organisation had received concerns about alleged land banking practices, which was increasing barriers for other companies to enter the market.
"There are concerns around land banking, there are concerns around any competitive practices and this work that I'll do with my colleagues and counterparts is all about getting to the bottom of that and taking action."
