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.