Well, I’d say that many Australians are outraged by it. Maybe you’re not, but of the Australians who are aware of how badly we’re being gouged, you’d be in the minority.
Does anyone have any ideas about how this works economically, beyond, people are willing to pay more in Australia? I am interested as to why this would be the case, given Australians seem to have less income. Maybe the market for the relevant goods is different, but again, why, and in what ways? Maybe the volatility of the AUD is, at least, a partial explanation (as recently as 2009 the AUD bought 0.65 USD). Also, this seems to affect many different goods, and it seems really odd that Australians would be willing to pay more for such a range of goods (pants to stamps to video games). In any case, I’d find any fuller economic explanations interesting.
Ok, makes sense. I made the assumption they built it into their price (some companies do some don’t).
It’s a relic of history.
During the 20th century, large companies in the US and Europe would simply set up distributorships in Australia, which meant (and continues to mean) monopolies. Someone upthread mentioned parallel importing, which has mostly been illegal until very recently. Parallel imports mean that anyone can import goods for sale, as opposed to only being able to buy them at the company store.
The tyranny of distance allowed abuses of capitalism, basically. Ignorant people are asking why Australians have agreed to pay huge prices: because we haven’t had any choice. We haven’t been allowed to buy US-made items (for instance) except from the [del]company store[/del] official distributors - which has meant that o/s companies have simply created a whole extra level of profit-taking. And since the small size of our market means we can’t realistically make everything ourselves, we have to pay for imports.
The internet and private importation is the first chance that Australians have had to buy things at prices that aren’t artificially (and anti-competitively) inflated.
In the US, if you don’t like the price of widgets at one store, you try another store. Here, if you need to buy a US-made widget, you’re shit out of luck because all of the stores have to buy them from a single distributor. No choice; capitalism fail. It’s not even our retailers, although they certainly suck too.
And before anyone starts asking why Australians have allowed our gov’t to allow US/Euro companies to dictate what our shops are allowed to sell, take a look at our population size. 23 million? What, exactly, are we going to do about it? If we complain too much, the US imposes more duties on Australian exports. We know which economy is going to blink first. American free-market economics only applies to American markets, despite the hype.
I don’t understand how this works for video games. As I understand it the big publishers have forced region pricing for a long time. And they all sell their games in Australia (so you have the same sort of competition amongst the big players). And so with regards to controlling the market, I don’t see that there is that much difference between Australia and the US (or the UK, and presumably other countries with the large price disparity).
Median Household Income in Australia (2007-2008) $66820 (AUD)
Median Household Income in US (2009): $49,777 (USD).
I couldn’t find the same year in a brief search, but the difference of a year or two isn’t going to make a huge difference. And, obviously, there are other ways to measure relative income than median household income.
Although, note that when you convert the AUD to USD using Purchasing Power Parity (see the first link), the effective household income in Australia is lower than the US one. So it appears that the extra costs more than correct for the extra income.
I sympathise with them Auzzies…I do.
However, why doesn’t someone start up businesses that don’t fleece the Auzzies? With the level of unfairness/outrage and the fact that prices are artificially inflated wouldn’t that mean that these businesses would rake in the money?
I’m not trying to snark or anything…but genuinely curious as to why people haven’t busted artificial price fixing?
Using the average exchange rate for the 07-08 financial year $66,820 (AUD) = $60,138 (USD). Using the exchange rate for 08-09, $66,820 (AUD) = $50,115 (USD). And for the past year or so, the exchange rate has around parity, so I won’t do that one. For historical contrast, 01-02 had the AUD being worth about half the USD. Just noting all this because I find it interesting.
I think the point that Shakester is making is that most companies wishing to do business in Australia (or elsewhere out of their home territory) set up distributorships with selected local companies to service retailers in the foreign market. This is common practice worldwide and makes sense as a logistically efficient way to do business.
Australia loses out because (1) it is not a large enough market that manufacturers will set up multiple (ie competing) independent distributorships and (2) customers that want the product are on an island continent, and cannot shop competitively in neighboring territories simply by crossing borders. Manufacturers are under no obligation to compete with themselves by setting up multiple distribution channels.
If the demand for these products flagged and the manufacturers still wanted the AU market then prices would fall, however AU is a solidly first world nation and they want their tech and consumer goodies the same as the rest of the first world. Australians have the benefit of living in one of the most fabulous places in the world, however, consumer goods wise they are pretty solidly fucked by their geography.
Re the whole “but they are close to China observation”, this is true, but the Chinese in the main, are just the assemblers of these desirable goods not the actual product owners. The fact that iPhones may be made in China has nothing to do with Apples distributor relationships in Australia or their desired price points for the products.
That’s a pretty good deal. I didn’t know Australia doesn’t charge duty and taxes on amounts under 1,000.
And many international companies actively restrict brands which can be sent internationally. So while Endless will ship some brands, they will not ship all of them, if the brand has a monopoly licence arrangement with an Australian importer. NARS, Asics and Kate Spade are a couple of examples where the site will state ‘this item cannot be shipped to your location’. So if you want the goods, you have to either purchase it at the inflated local price, or use a reshipper.
To the OP: it’s basically because we put up with it. As some have said here, if you can organise people to make enough fuss then things can be done about it.
No they are not, 10% GST is not astronomical. Indeed there are few comparable economies with a lower tax burden, and them not by that much:
Total tax burden as a proportion of GDP:
Australia 30.8%
USA 26.9%
UK 39%
Germany 40.6%
Denmark 49%
Japan 28.3%
South Korea 26.8%
Apparently there are legal restrictions, and the laws would have to be changed, and that’s the snag. Repealing the protectionist laws would take a lot of time and money, and of course no one company wants to do this alone.
Otherwise, I’d be setting up a used book exporting service right now.
The legal restrictions, via the parallel importing laws, apply to books, but don’t apply to everything that has been brought up here. So far as I can tell, books are the exception with regards to laws being the problem.