Is it more expensive to dine out in Australia than Europe? Blogger Matt Cowgill conducted a thorough analysis of both fine dining and Big Mac costs in Australia and Europe and concluded that whether you look at basic exchange rates, purchasing power parity or how much of the average weekly wage is needed to buy one, Australia generally comes out at the cheaper end of the scale.
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For fine dining, Cowgill used the World's Top 50 Restaurant list and examined the cost of a dinner tasting menu at each venue in Europe and Australia on that list. For the Big Mac, he grabbed the local price. Relevant local taxes were applied, and Cowgill compared the prices using three different metrics: current exchange rates, purchasing power parity exchange rates, and the proportion of an average full-time wage that would be needed to buy that meal.
No matter which metric you use, Australia came out towards the bottom end of the scale for both fine dining and Maccas. When it comes to buying a Big Mac, we were right at the bottom of the ranking when it came to how much of the minimum wage you'd have to spend to buy one, which matches up with previous research on the topic.
Cowgill's motivation for the post was a claim published in the AFR that mandatory penalty rates resulted in higher restaurant prices in Australia . In the case of restaurants, the actual costs certainly don't seem to match up with the claim, but this is a familiar theme in discussions of pay in Australia. We often hear that "excessive penalty rates" mean goods cost too much or businesses can't operate effectively.
However, as we've seen when examining similar claims from Myer CEO Bernie Brookes and Harvey Norman boss Gerry Harvey, those claims rarely stand up to any kind of close scrutiny, often involving wildly exaggerated and flat-out wrong figures.
The two lessons? Firstly, you'll need to budget more than you might spend at home for eating out if you're planning a European holiday. Secondly, when people make claims about penalty rates destroying business, they need data to back up their claims, not just anecdotes.
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