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This is compared to other countries that receive the same products overseas

A new report shows that many software companies overcharge Australians by about 50 percent when it comes to sales of digital and IT products. 

The House standing committee on infrastructure and communications created a report called "At What Cost? IT Pricing and the Australia Tax." The report found that Australians pay an average of 50 percent more for software, hardware and digital media compared to other countries that receive the same products. 

The report, which surveyed over 150 products, showed that eBooks in Australia were 16 percent more expensive while downloaded music had a 52 percent cost difference and games were at a whopping 84 percent.

Products from individual companies were surveyed as well, finding that Adobe software had an average price difference of 42 percent, Autodesk was at 51 percent and Microsoft topped the charts at 66 percent. 

It was even noted that it'd be cheaper for Australians to fly to another country, buy software there and fly back than to just buy the same software locally. 

Issues that contribute to the higher local prices include the country's location, differences in tax regimes, high rent/wage costs, the small size of the market and the warranty protection costs. However, the report noted it was clear that there's an international price discrimination that hurts both Australian consumers and businesses. 

The report gave nine recommendations on how to make this better for Australians, including educating them on how to get the best prices on such products, getting rid of or altering parallel import restrictions that stop consumers from getting cheaper products from overseas and even scrapping geoblocking. 

Back in February of this year, Adobe slashed the prices of its software after Australians complained of consumer fleecing. For instance, the annual subscription rate for Creative Cloud went from AU$62.99 per month in Australia to AU$49.99. Access to individual titles in the software suite now cost AU$19.99 monthly.

Source: The Guardian

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Import Tax
By BRB29 on 7/29/2013 12:34:10 PM , Rating: 2
Australia has high import tax to protect their own national products. A $2000 software application will end up costing about $2500

In addition to the insane minimum wage is over $16 an hour, small market, etc... it's pretty reasonable that it's 42% more. I don't think there is price discrimination. If it does exist, it is certain pretty low.

RE: Import Tax
By Ammohunt on 7/29/2013 1:24:41 PM , Rating: 2
Ah good old fashioned protectionists eventually that ends badly.

RE: Import Tax
By superflex on 7/29/2013 1:54:38 PM , Rating: 1
Couldn't happen to a nicer bunch of AGW blokes.
I'm sure there's some BS carbon tax built into those prices as well.
You get what you sow.

RE: Import Tax
By Samus on 7/29/2013 2:25:26 PM , Rating: 3
It isn't just the import tax.

Australian Consumer Protection Laws are heavily weighted against product manufacturers, suppliers and retailers in favor of the consumer. Some products are required to have a lifetime warranty, many others are requires to have a doubled-up manufacture warranty. And almost anything can be returned within the warranty period for a refund.

It's like Costco's old policy, but at every store, on every product.

This is risky for razer-thin margin products like hardware and consumer electronics. It's also dicey for software manufactures that typically don't have to take a return after a product is opened.

If I were doing business in Australia, I'd charge more too, simply to cover my risk and marginal loss on returns.

RE: Import Tax
By StevoLincolnite on 7/29/2013 7:36:43 PM , Rating: 2
Not only that, but Australia only has a couple of importers on computer hardware, It's not unusual for the importers to take a larger chunk of the price on higher-demand hardware like newly released video cards due to lack of competition.

However, consumers in Australia pretty much expected everything to be more expensive when the dollar was worth anywhere between 30-50% less than the USD.
However, when the Dollar was worth 10% more than the USD during the American's recession, prices didn't change at all, which is where the Government and Consumers have the beef with these companies.

All in all, importing from overseas is what many people are starting to turn towards here as most of the time even with shipping it's cheaper.

Besides, allot of software you buy online from say... EA's Origin or Steam have a no refunds policy.
Heck the Australian consumer protection laws pretty much exclude them because they're overseas. - There are no Taxes, Import costs, packaging on it either, yet we still pay 50% more, for what?

Some products are required to have a lifetime warranty

That's generally false.

All products and services in Australia has a warranty, however the warranty length is fairly ambiguous, basically if you sell something it has to last a reasonable amount of time. - That's what the law states.

That's not to mention that Lifetime warranty doesn't mean the lifetime of the consumer, but usually the products lifetime on the shelf, much akin with Ram. - Thus the warranty could be an hour or several decades.

RE: Import Tax
By Samus on 7/29/2013 11:49:19 PM , Rating: 2
Gotcha. Thanks for explaining that. I read a lot about Australia's economy awhile back and the legal rights of consumers was fascinating, but not well explained.

I still think it's amazing how firearm reform was passed there, virtually eliminating everything from massacres to "Trayvon Martin" scenarios. There hasn't been a mass shooting since, and whether you would call it related or not, the economy has never been better and quality of living is extremely high. Now you just need to export some "real" beer and ditch that Fosters crap ;)

RE: Import Tax
By spaced_ on 7/31/2013 7:54:28 PM , Rating: 2
Fosters is bottom of the barrel. If there's no good Australian beers being imported to US sounds like a good market opportunity.

It's nice in Australia knowing mentally ill people can't go to a local shop and buy a semi-automatic weapon to go on a killing spree. Nor can average testosterone fueled boy or man take freely available gun on the street and act like a hero.

Economy has been booming on the back of globalisation. We dig up lots of coal and metals which we have an abundance of, export them to China, then American companies get Chinese slaves to make cheap consumer electronics and what not out of those materials. The american companies then make a big profit by selling those gadgets.

Everyone wins. We make lots of money selling raw materials which are taxed fairly heavily so the money flows on to the rest of our community. China makes lots of money selling cheap labour. Big american companies make lots of money on the margins of their gadgets and the average american gets to enjoy the warm loving glow that their gadget gives to them at night. The american politicians benefit too. They enjoy political donations and back pocket donations from the big american companies to ensure they keep getting tax breaks. God only knows what might happen to the american economy if that money were to be spread around to the rest of the american population. It's much safer in the hands of investment bankers and what not.

RE: Import Tax
By StanO360 on 8/8/2013 1:51:56 PM , Rating: 2
Wow! FYI the Occupy Wall Street manifesto is NOT, repeat NOT an encyclopedia of truth.

RE: Import Tax
By BRB29 on 7/30/2013 8:34:02 AM , Rating: 1
Australian Consumer Protection Laws are heavily weighted against product manufacturers, suppliers and retailers in favor of the consumer. Some products are required to have a lifetime warranty, many others are requires to have a doubled-up manufacture warranty. And almost anything can be returned within the warranty period for a refund.

That's a double edge sword because any business would simply pass that expense back to the consumer. Forcing double warranties will lead to higher prices. Why are they complaining about higher prices when they're getting "more"?

RE: Import Tax
By cactusdog on 7/30/2013 8:23:25 AM , Rating: 4
Wow, what a jerk. Don't worry about us mate. Our standard of living is so high, its not really a big deal. Anyway there are other ways to get software and games without paying retail prices, Bahahaha. Now you can go back to kicking the poor people in the US and telling them the minimum wage needs to be reduced from $6/hr to $1 hour to create jobs lol. Then you can kick them again because they cant afford healthcare. You know, all the usual right wing stuff that only happens in the US.

RE: Import Tax
By BRB29 on 7/30/2013 8:43:46 AM , Rating: 1
Our standard of living is so high, its not really a big deal.

Overpaying for the same products and having higher living expenses does not equate to higher standard of living.

You know nothing about the US or the "wings". The US is currently dominated by left wingers and have been for a while.

Having a minimum wage too high means that many employees are getting more than what their value is actually worth. In the US the minimum wage is over $7. Sure that's low but only about 4% actually makes minimum wage.

You love your country and I respect that but don't talk down to another country that you know nothing about. We have different policies and laws for different reasons because we have a different situation. We don't think a 16 year old with no skill, education or good work ethics deserve $17 an hour. We don't think paying 42% more is a good idea for protecting the consumer.

RE: Import Tax
By spread on 7/31/2013 2:17:28 AM , Rating: 2
In the US the minimum wage is over $7. Sure that's low but only about 4% actually makes minimum wage.

Those poor people making $7/hour are making too much money. What we need is more poor people working at $3/hour to create more jobs and more America.

If minimum wage is $7/hour you are hurting America.

RE: Import Tax
By spaced_ on 7/31/2013 7:59:33 PM , Rating: 2
Definitely. But I think $3 / hour is too high. All those labourers in China making $0.50 / hour are stealing american jobs.

Perhaps america should introduce some labour protectionism on top of the trade protectionism it's developed over 80 odd years. It could lower the minimum wage to $3 / hour then use tax payer money to fund the other $2.50 / hour back to the companies that wanted to use cheap labour. Then those Chinese labourers wouldnt be able to compete. All that money is just being lost overseas and americans are losing jobs.

RE: Import Tax
By spaced_ on 7/31/2013 8:08:08 PM , Rating: 2
I hate to get in the way of good FUD being spread, but you might like to look up the actual minimum wage rules:

A 16 year old gets about $6 / hour.

RE: Import Tax
By StanO360 on 8/8/2013 2:01:39 PM , Rating: 2
Well, you might have almost reached the US standard of living. But it looks like with the Chinese slowdown the flow of raw materials from Australia will be slowing.

Btw, ignorant Aussie the poor get free healthcare in the US, certainly anyone dumb enough to try to live on minimum wage (which very few do).

RE: Import Tax
By GPig on 7/29/2013 1:41:40 PM , Rating: 2
The silly thing is that you can order most things online from international retailers (with a cost of less than $1000 AUD) and pay no tax at all! I used to import everything when I lived in Sydney.

So yeah - seriously stupid protectionist policy that can only hurt their own high street

RE: Import Tax
By Daneel_ on 7/29/2013 2:19:49 PM , Rating: 4
I'd strongly suggest actually reading the report before jumping to conclusions, available here:

For TL;DR I'd recommend page 100 and 101 - the committee overwhelmingly found that, despite market considerations being taken into account, Australians were being charged large premiums vs other countries -- in particular for digitally delivered content, such as purchases made via Steam and iTunes.

It's actually a very interesting read; I highly recommend having at least a flip through. Based on gut feel, the 'Australia tax' is very real and is building negative consumer sentiment here in Australia. Speaking personally, I certainly grumble when I see new games for the PS3 launch at $110 which is our standard AAA title price, vs $60 in the US.

RE: Import Tax
By stm1185 on 7/29/2013 2:45:30 PM , Rating: 2
Well Australia can go on strike then and only buy Australian software, hardware, games and music...

But then that's an awful lot of sitting around playing Knifey Spooney.

RE: Import Tax
By eldakka on 7/31/2013 6:13:37 AM , Rating: 2
hey, whats wrong with Knifey Spooney?

It's good at weeding the weak out of the gene pool when the Knifey ends up in the Hearty

RE: Import Tax
By Cloudie on 7/29/2013 6:54:59 PM , Rating: 3
Don't let the facts get in the way of some good old neo-lib pseudo science/"logic".

RE: Import Tax
By rs2 on 7/29/2013 7:51:43 PM , Rating: 5
insane minimum wage is over $16 an hour

Yes, heaven forbid that the minimum wage actually be liveable. Next you'll have minimum wage workers thinking that they're actually people.

Those Aussies are crazy!

RE: Import Tax
By StanO360 on 8/8/2013 1:57:37 PM , Rating: 2
That may be fine for Australia. But in the US adults don't normally work for minimum wage. And if they are that's a problem not with the minimum wage, but with government tax and regulation policies that are freezing higher paying jobs. Illegal immigration, social policies also play a part.

But minimum wage ironically hurts the lowest rung of the ladder . . . they just don't get hired.

RE: Import Tax
By althaz on 7/29/2013 9:14:41 PM , Rating: 2
There is zero import tax on software from the US, just FYI. There is a 10% sales tax (if purchased online this is only applicable for sales over $1000), but nowhere near a 42% difference.

RE: Import Tax
By spread on 7/31/2013 2:15:06 AM , Rating: 2
In addition to the insane minimum wage is over $16 an hour, small market, etc... it's pretty reasonable that it's 42% more. I don't think there is price discrimination. If it does exist, it is certain pretty low.

You are correct. The software costs more because Australia has a minimum wage of $16 and because of that products coded in America and sold and distributed online are more expensive.

RE: Import Tax
By eldakka on 7/31/2013 6:11:48 AM , Rating: 2
Australia has a 10% GST an nearly everything (a few things are excepted, raw foodstuffs etc).

The 10% GST is paid by both domestic suppliers and importers.

Therefore that $2000 software, if produced locally, would sell for $2200.

Now, you seem to also have problems with currency conversion.

Your example imples that there is a $500 price differential between the original product, $2000, and the final price in Australia, $2500.

You conviently leave out that the original price is $2000 US dollars, while the final price is $2500 Australian dollars.

According to the website you have provided the original price is $2000 + another $50 in postage/insurance costs, for $2050 USD which, when converted to $AUD gives us $2269.50 AUD. Wow, there goes half your difference already just in the currency conversion from USD to AUD.

So on top of this $2269 is a 10% GST which is charged to most goods and services, irrespective of source. IT equipment whether manufactured locally or offshore, cars, building equipment, processed food, books, newspapers, services (a massage has a 10% GST component...) and so on.

This gives us $2496.45, plus the customs service fee (which I assume is a flat rate irrespective of product) of $55.

However, goods bought electronically, e.g. steam games and other downloadable software, music from iTunes and so on don't get hit with this 10% GST (tho theoretically they should be).

These sorts of products, that have no distribution costs, no GST component, no customs service fees and so on that would add to the cost of a physical good, still are often 30-50% higher in Australia than overseas.

Often a downloaded computer game that could be bought from steam US for US$39 will be on steam AU for AUD$79, AUD$36 (50%) more than exchange rate or any other possible costs could account for.

Now I understand in the hearings Microsoft basically said they charged what the market would bear, what they could get away with.

And, to be honest, I have no problem with this. If peope here are prepared to pay 50% more for the product locally, then that's their problem. Stop buying the product locally or don't buy the product at all. If the market WON'T bear a 50% price premium, then the prices will come down.

What I DO have a problem with is when a company (e.g. Apple, et al in the same hearings) start trying to hide this. Start using excuses like "additional costs of doing business, taxes etc". THAT I have a problem with.

RE: Import Tax
By overlandpark4me on 8/9/2013 1:28:18 PM , Rating: 2
To protect their national products, lololol. You mean they price fix to supplement their tax base. What a joke. No wonder people pirate. Your government is doing the same thing themselves. Get on a VPN in Canada or the U.S. and bypass their criminal actions.

By roykahn on 7/30/2013 5:11:06 AM , Rating: 2
the cost of any government burden on a business or corporation is passed to the consumer

...and the consumer earns money by working for a business that is charging its customers who earn money working for a business etc. etc. etc.

You see, there is no "end of the day" as it is a circular relationship. Your argument is far too simplistic and is often repeated by politicians and certain groups of the media who seek to benefit from income inequality.

By Arsynic on 7/30/2013 9:15:12 AM , Rating: 2
"Income inequality"? You say that as if this is a harmful thing. The amount of income you receive should be related to the amount of effort you put in. Some jobs require more skill than others. I'm more of opportunity equality.

My point wasn't to make a simplistic point, but to show that government meddling in private enterprise almost always ends up affecting the consumer negatively.

By roykahn on 7/30/2013 5:19:42 PM , Rating: 2
Income equality is harmful when it is excessive. Studies have shown that the whole society is worse off when the inequality is very high. The question is: how much will society bear and how much will the elite get away with? The recent Occupy Movement is one example of the public being fed up with inequality of income, opportunity and law.

"Government meddling in private enterprise" is a necessary thing. You need laws to protect the seller and buyer and ensure smooth transactions. Perhaps you are a believer in the myth of free markets?

By StanO360 on 8/8/2013 2:07:43 PM , Rating: 2
The Occupy movement was small and widely disregarded in the US. What myth of free markets are you talking about? It has created the healthiest, wealthiest peoples in history (including Australia). With freedom that people historically would never even imagine possible.

That's a myth to you? In the US, the creators of our Constitution saw an inverse relationship between government and freedom/prosperity, and I think they're right.

That's not to say government doesn't have a role sometimes, but limited

By spaced_ on 7/31/2013 8:49:07 PM , Rating: 2
Yeah I agree, private enterprise should have all the freedom and opportunity in the world to:
- avoid paying tax
- build cartels
- price gouge consumers
- extort money from other private enterprises
- price-fix goods
- etc.

I mean, all this government meddling is just getting ridiculous.

By unimatrix725 on 7/29/2013 2:49:56 PM , Rating: 2
It really sux doesn't it! I doubt anything will change that. All 1st class countries should have the same pricing. Yet we subsidize everything that should not be. We give millions to poor countries and non cash items als. So you would think we would get a break on something that is necessary like meds, not software! All goes to whos hand is in your pocket and who's hand yours is in!

By nomagic on 7/29/2013 10:10:13 PM , Rating: 2
I am not so sure about Australia being a 1st class country.

By Jereb on 7/30/2013 2:28:55 AM , Rating: 2
Hehe, we have our issues. But we're better off than most 1st class countries.

Still don't have free medical like Canada though :|

By StanO360 on 8/8/2013 2:09:08 PM , Rating: 2
Canada does not have "free" medical care. It's paid for with taxes (and debt).

What about Europe?
By Nyu on 7/29/2013 9:59:37 PM , Rating: 2
Why do you guys mention only Australia? in EU we pay even 200-300% more than US for all media, software and electronics often.

RE: What about Europe?
By StanO360 on 8/8/2013 2:11:35 PM , Rating: 2
That may be more a reflection of the US Market than the European one. But I know the UK pays a heft VAT on everything.

By envolva on 7/29/2013 12:36:48 PM , Rating: 2
Brazilians have to pay 100%-200% more for hardware and software (vat included). While the average income is also lower than European countries.

Anything software / hardware related pay 60% or more in taxes (transport fees are taxed too). Companies pile up and charge a premium on top of it. The good thing is we do enjoy entire vacations buying hardware and software anywhere else.

You are welcome.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
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