CHOICE Study Highlights The Extent Of The Australia Tech Tax

It's not news that Australians often get rorted with inexplicably high prices for technology products. The government inquiry into those price differences has just finished accepting submissions, and consumer watchdog CHOICE has published its submission, which highlights how extreme the differences are.

Picture by William Warby

We all know that music on iTunes costs more in Australia (as do many apps, though not the cheapest ones). What's particularly notable in CHOICE's analysis is the tabulation of price difference on more expensive software. This costs 34 per cent more on average, even when delivered digitally, and some cases are even more extreme. As CHOICE head of campaigns Matt Levey points out: "We found that, with one Microsoft software development product [Visual Studio 2010 Ultimate], it would be cheaper to pay someone’s wage and fly them to the US and back twice, getting them to buy the software while they're there." While there were a handful of software products that were cheaper, those were definitely the exception.

The submission also underscores another point we've made before: arguing that the $1000 threshold for applying GST to online shopping should be removed is a nonsense, as the price gap is often far more than 10 per cent. As the submission notes:

Industry groups have proposed a number of local causes for digital price disparities, such as rental, labour and transportation costs, GST and profit margins. However, CHOICE’s analysis suggests that all these five factors combined account for only 22-27% of retail prices in both Australia and the US. The remaining 78-73% comes from the wholesale cost of the goods to the retailer.

CHOICE


Comments

    our gov't is weak.... inquiry? why???? just to learn the thing we all know already..!!!! Our gov't should be demanding via the WTO fairer pricing.. not only that, lodging a dispute within the WTO framework that can force WTO members to price products within Australia on par with our counterparts via non-discrimination, and tariff reductions.. This should be a no brainer!

      That would imply the Oz govt (any party, all the same in this area) has the balls to stand up for the rights of its people internationally.

      Does Not Happen.

      The pollies are to busy being OH so chuffed that they are allowed to sit at the big table with the adults and would not dare to think to upset anyone.

      You need documented evidence to do anything. The "inquiry" is the first step to getting evidence.

        haha agreed, otherwise we'd be standing in front of the WTO talking about our feelings.

    So while we wait for the govermnet to do it's enquiry (1 year) and the WTO to do it's enquiry (2 years) and then the court cases to enforce it (10 years) the normal Australian consumer will simply find more ways around these types of shenanigans and Aussie retailers (like GAME) will continue to go out of business.

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