13 ms·

"Australia Tax" is real: Infrastructure and Communications report

112 points by zarify 13y ago

jeza 13y ago
This is particularly telling... "In relation to games, for example, the committee has not received any evidence which explains why it is almost invariably cheaper for Australian gamers to purchase and ship physical media from the United Kingdom to Australia than it is to purchase a digital copy of the same game."
- rustynails 13y ago
  A while back, the Australian dollar was about US 60c. I would suggest this was the basis for which software was pegged against. When the exchange rate changed, the priced stayed fixed because it maintained status quo for the locals. Over time, it became the norm for others to follow suit. It's actually quite simple: if you think it's too expensive or loaded pricing, don't buy it.
  - Volpe 13y ago
    what if you have a need, and that need can only be filled by a product with a loaded price... you don't really have the option to "not buy it"...
  - anthonyb 13y ago
    Not even that. Even games on Steam are routinely priced at retail and left there for years. Civ V, for example, was still $70 last time I checked. And no, I didn't buy it :) Update: Just checked - Released 24 Sep 2010, $69.99
    - elnate 13y ago
      http://www.steamprices.com/ http://www.steamprices.com/ is a good place to see what's what and find the most outrageous examples. Anno2070 DLC has a 700% markup in Australia.
      - guard-of-terra 13y ago
        This is probably a result of owners forgetting to update prices in 2nd class regions (= everything that's not US or UK). The solution to it is price tiering as opposed to being able to price whatever in whatever country.
        Khaine 13y ago
        Except that Steam forces Australians to buy software in US dollars. We can't buy through the US Store. We go into an 'australian steam store' where they rip us off, and we have to pay in USD.
        levosmetalo 13y ago
        And suddenly, the whole "don't pirate, feed the poor hardworking people" story doesn't seem so believable, is it?
        JEVLON 13y ago
        Not all developers/publishers charge higher prices. You can see here: http://userscripts.org/scripts/show/149928 http://userscripts.org/scripts/show/149928
  - bjz_ 13y ago
    I live at university accommodation in Australia which houses a large proportion of international exchange students. Every one of them, from France, the UK, Canada, Sweden, the US etc. has been shocked by the prices here. Some of them have even said that if they had known how expensive it was, they wouldn't have come. (This is in general, not just software.)
    - gregsq 13y ago
      I'm in Australia from the UK and yes, the prices can be ridiculously high. I have my own version of the McDonald's index, the bread index. In supermarkets in the UK quality organic whole meal fresh bake is £1.10 which is about $1.80 AU. A loaf of white junk bread in Australia costs over $4.00. And so it is with lots of things. So many rent seekers.
      - robryan 13y ago
        To be fair you can get the cheap supermarket brand for about $1.10. I would agree though that you can be looking at around $4 for something decent.
        gregsq 13y ago
        It's my unfamiliarity with city prices I've discovered. I apologise for my lack of knowledge there. Still, the regional price I see in the large country town I'm in is in a way the exception that demonstrates this observation. I cannot but surmise that a rent is being charged.
      - criley2 13y ago
        In the American south where cost of living is known to be low, I can get store brand white bread for $0.99 (~$1.06 AUD). I can get fancy pants processed bread that is brown with lots of labels like "NATURAL" for $3.00. Store-fresh bread is $2 - $4 at grocery stores. I can't imagine junk white costing $4. That's outrageous, but then again, maybe it's like that in some American regions with a crazy cost of living.
  - beedogs 13y ago
    Or continue to import it for half the price. Yay, status quo.
chris_wot 13y ago
Finally! There is widespread anger amongst Australians about geo blocking and market segmentation practices. It's also why content and software is widely pirated.
- beedogs 13y ago
  There's a culture of piracy here that's pretty interesting; people bring entire TB hard drives and small NAS devices into work to share entire collections among each other. (This has abated somewhat now that internet prices aren't so extortionate.)
  - Khaine 13y ago
    That culture is down to several factors: * price * availability * quality of our TV Networks
    - anthonyb 13y ago
      I think another major one is the cost and quality of our broadband networks. It's expensive here to download movies, or even to have a connection that's good enough to stream.
    - chris_wot 13y ago
      The third point effects the second point. Our TV networks are absolutely crap. They only ever develop reality TV shows, the bottom of the barrel being "Celebrity Splash" (z-grade celebrities dived into a pool); they never show series in order, they interrupt series with something irrelevant, and they show a LOT of ads. Their news is even more atrocious. Its a badly kept secret that their overall audiences have been shrinking, which is why they only ever give ratings in terms of percentages. A large percentage of a shrinking market is ok, until of course the market gets below a certain size. Note this does not include the ABC, which is government funded. That network takes risks, always shows series in order, and even has a great streaming service.
      - bjz_ 13y ago
fungi 13y ago
a) Australians have very high incomes and "CUBs" continue to happily pay for their over priced gizmos. For all his whining about unfair competition Gery Hervey isn't exactly suffering. b) ALP and Liberal govs have happily voted for measures that entrenched regional distribution monopolies (FTA, draconian copyright regimes, criminalisation of DRM circumvention) note: in the early days of the Howard government parallel importing of media was legalised, this had a dramatically positive impact on pricing for consumers.
- Volpe 13y ago
  > draconian copyright regimes What are you refering to?
  - fungi 13y ago
    DRM aside... not an expert by any measure but the tight restrictions on "format-shifting" and limitations of "fair dealing" (as apposed to the broader rights granted under "fair use") come to mind. interestingly (according to wiki) the act specifically allows "circumvention of region coding." http://en.wikipedia.org/wiki/Modchip#Legality http://en.wikipedia.org/wiki/Modchip#Legality but modchips are still pretty much illegal... thanks FTA... (just fou d this article which lays out a pretty interesting history http://www.gizmodo.com.au/2011/02/mods-vs-lockers-region-coding-and-the-legal-dilemma/ http://www.gizmodo.com.au/2011/02/mods-vs-lockers-region-cod...).
  - fnordfnordfnord 13y ago
    Copyright schemes (region coding of DVDs for example) exist for the purpose of imposing regional pricing, among other reasons.
anovikov 13y ago
What is wrong about market segmentation? Every product finds it price at the crossing of supply and demand. With incremental costs of delivering digital content approaching zero, supply is almost out of the equation. So naturally on a market with higher purchasing power and higher overall price level (and Australia is a costly place to be), prices will be higher, what's wrong about it?
- Nursie 13y ago
  Companies operate within a global marketplace, buying resources and employing workers from wherever they want, in the most cost effective way possible for them. Then they try to deny us the same opportunity. It's hypocritical. Your argument is basically like saying it would be fine to charge people different amounts for your product based on what's in their bank account. Maybe you could do this, but people would be just as annoyed about it.
  - anovikov 13y ago
    There are many ways people are charged based on what's on the people's bank account. Look at the airlines for instance, they mastered this skill since 1978. I see nothing wrong here. There are high-price markets and low-price ones, to circumvent it, there are smugglers to run the line - you can buy digital content using a proxy in USA or UK and using a one-off (digital) UK credit card which is easy to buy. Same thing goes about say, smartphones in Russia. It is an accepted practice to buy iPhones from smugglers where they are 60-70% of the price in a retail store due to Apple price policy for Russia, i am fine with that. There are different prices for different places based on a lot of factors, trying to fight it will only increase price levels EVERYWHERE because the volume will go down. An ideal-perfect pricing system is where the product is sold to the maximum number of people who want it and can afford to pay at least an equivalent of incremental cost of production and delivery (which is, for digital goods, near zero), yet everyone pays a maximum amount he can afford. One of the criterias for price setting is the country (there must be many others of course, again look at the airlines and learn from them).
    - 13y ago
JonnieCache 13y ago
Back in the day I used to buy games imported from australia to the UK (n64, gameboy) because they had PAL tvs yet were on the japanese release schedule. Me and my brother had completed pokemon several times over before any of our friends in school had even heard of it. Obviously this all changed at some point...
chunkyslink 13y ago
I've just returned to the UK after living in Western Australia for 3 years. I'm a runner and was absolutely shocked at the markup on running shoes. Many high street shops selling shoes for $200 + dollars when you could get them for $80 dollars delivered to Australia from the UK, by buying online. I have no idea why people would shop these high street stores.
- chris_wot 13y ago
  I have no idea why people would shop these high street stores. Warranty.
  - PeterisP 13y ago
    Well, in EU&UK the online stores have all the same warranty requirements as high street and some extra; so that shouldn't be the reason.
    - rmc 13y ago
      In the EU you have better rights if you buy online than in a shop. If you buy online, you can get a refund within 7 days, even if you just changed your mind.
    - chris_wot 13y ago
      You'll have to forgive Australians who don't feel like calling international telephone rates for customer service, or who don't wish to ship their goods around the world to have them repaired. Or to battle a retailer in a different country if they don't want to cover their warranty.
- mathattack 13y ago
  Indeed, I went shopping at a "Going out of business" sale for a high end children's toy store this weekend. They said, "We're going online to compete with Amazon, can't afford retail space any more." Their so called clearance price for a toy car was the same every day price at Duane Reade.
prawn 13y ago
The inquiry recommends bypassing geo-blocks, which is quite telling.
- Khaine 13y ago
  Unless your an american with their head up the 'free markets' arse
  - ryan-allen 13y ago
    Haha, arse. Spoken like a true Aussie. For some people the 'don't buy' is one thing, but if you need Photoshop, there is no competition. There is no other choice.
randyrand 13y ago
It's not really a tax - it's Econ 101 price discrimination. which works as long as it can't be easily debased by arbitrage. Australians have very high standards of living and the prices reflect that. This is just supply and demand and I don't see a problem with that.
- chris_wot 13y ago
  Not every Australian. Perhaps it's time for a little less free market and a little more government intervention. Nobody likes being taken advantage of.
- dwightgunning 13y ago
  Calling it a 'tax' is indeed inaccurate and misleading. The purpose of the inquiry was to look at regional price discrimination against Australian consumers. "The Treasury’s submission to the inquiry defined international price discrimination in these terms: Geographic price discrimination occurs when a business charges different prices for the same product in two or more different locations. International price discrimination is when geographic price discrimination occurs across country borders. To maximise profit, many businesses do not sell based simply on a mark-up of what the product cost to produce, but rather price according to what they consider the market can bear, that is, according to the consumers’ marginal willingness to pay." http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/report.htm http://www.aph.gov.au/Parliamentary_Business/Committees/Hous... To my mind it's just smart business for software makers to price their products at what the market will bare. However I think it crosses a line when sellers of "digital goods" build in technical geoblocking (e.g. regional website redirects, region-specific app stores) and licensing agreements which enforce consumers purchase in a specific reason. The parliamentary committee was the result of certain sections of the market saying their not willing to bare this pricing tactic and looking to raise awareness amongst those who aren't aware that it is happening. Also interesting and was this earlier article from mid-way through the inquiry with a focus on Adobe: "At the parliamentary hearing, he said that customers can buy Adobe boxed products overseas, but that those products would not be covered by the company's local warranty policies." - Adobe managing director for Australia and New Zealand Paul Robson http://www.zdnet.com/au/adobe-to-australia-higher-pricing-is-your-personalised-experience-7000012972/ http://www.zdnet.com/au/adobe-to-australia-higher-pricing-is...
girvo 13y ago
Of course it is. I've worked in sales in Consumer Electronics and boxed Software for about 7 years now, and I know the actual cost prices of most things. It's good to have proper confirmation, at least.
rmc 13y ago
There s a nuclear option that Australia (or other countries) could use. Declare copyrighted goods that are too expensive lose copyright. That film that you won't sell for the same price as the USA? it's now public domain, a local market of people pressing DVDs will spring up.
- nahname 13y ago
  You have to mod your console to play burned games. In the case of the xbox, they change their checking techniques every year and you would have to upgrade accordingly.
  - rmc 13y ago
    Then make pirating the XBox legal. Make the term "XBox" be not a trademark. I know it's a nuclear option and will never be done.

112 points by zarify 13y ago

jeza 13y ago

This is particularly telling... "In relation to games, for example, the committee has not received any evidence which explains why it is almost invariably cheaper for Australian gamers to purchase and ship physical media from the United Kingdom to Australia than it is to purchase a digital copy of the same game."

rustynails 13y ago
A while back, the Australian dollar was about US 60c. I would suggest this was the basis for which software was pegged against. When the exchange rate changed, the priced stayed fixed because it maintained status quo for the locals. Over time, it became the norm for others to follow suit. It's actually quite simple: if you think it's too expensive or loaded pricing, don't buy it.
- Volpe 13y ago
  what if you have a need, and that need can only be filled by a product with a loaded price... you don't really have the option to "not buy it"...
- anthonyb 13y ago
  Not even that. Even games on Steam are routinely priced at retail and left there for years. Civ V, for example, was still $70 last time I checked. And no, I didn't buy it :) Update: Just checked - Released 24 Sep 2010, $69.99
  - elnate 13y ago
    http://www.steamprices.com/ http://www.steamprices.com/ is a good place to see what's what and find the most outrageous examples. Anno2070 DLC has a 700% markup in Australia.
    - guard-of-terra 13y ago
      This is probably a result of owners forgetting to update prices in 2nd class regions (= everything that's not US or UK). The solution to it is price tiering as opposed to being able to price whatever in whatever country.
      - Khaine 13y ago
        Except that Steam forces Australians to buy software in US dollars. We can't buy through the US Store. We go into an 'australian steam store' where they rip us off, and we have to pay in USD.
        levosmetalo 13y ago
        And suddenly, the whole "don't pirate, feed the poor hardworking people" story doesn't seem so believable, is it?
        JEVLON 13y ago
        Not all developers/publishers charge higher prices. You can see here: http://userscripts.org/scripts/show/149928 http://userscripts.org/scripts/show/149928
- bjz_ 13y ago
  I live at university accommodation in Australia which houses a large proportion of international exchange students. Every one of them, from France, the UK, Canada, Sweden, the US etc. has been shocked by the prices here. Some of them have even said that if they had known how expensive it was, they wouldn't have come. (This is in general, not just software.)
  - gregsq 13y ago
    I'm in Australia from the UK and yes, the prices can be ridiculously high. I have my own version of the McDonald's index, the bread index. In supermarkets in the UK quality organic whole meal fresh bake is £1.10 which is about $1.80 AU. A loaf of white junk bread in Australia costs over $4.00. And so it is with lots of things. So many rent seekers.
    - robryan 13y ago
      To be fair you can get the cheap supermarket brand for about $1.10. I would agree though that you can be looking at around $4 for something decent.
      - gregsq 13y ago
        It's my unfamiliarity with city prices I've discovered. I apologise for my lack of knowledge there. Still, the regional price I see in the large country town I'm in is in a way the exception that demonstrates this observation. I cannot but surmise that a rent is being charged.
    - criley2 13y ago
      In the American south where cost of living is known to be low, I can get store brand white bread for $0.99 (~$1.06 AUD). I can get fancy pants processed bread that is brown with lots of labels like "NATURAL" for $3.00. Store-fresh bread is $2 - $4 at grocery stores. I can't imagine junk white costing $4. That's outrageous, but then again, maybe it's like that in some American regions with a crazy cost of living.
- beedogs 13y ago
  Or continue to import it for half the price. Yay, status quo.

chris_wot 13y ago

Finally! There is widespread anger amongst Australians about geo blocking and market segmentation practices. It's also why content and software is widely pirated.

beedogs 13y ago
There's a culture of piracy here that's pretty interesting; people bring entire TB hard drives and small NAS devices into work to share entire collections among each other. (This has abated somewhat now that internet prices aren't so extortionate.)
- Khaine 13y ago
  That culture is down to several factors: * price * availability * quality of our TV Networks
  - anthonyb 13y ago
    I think another major one is the cost and quality of our broadband networks. It's expensive here to download movies, or even to have a connection that's good enough to stream.
  - chris_wot 13y ago
    The third point effects the second point. Our TV networks are absolutely crap. They only ever develop reality TV shows, the bottom of the barrel being "Celebrity Splash" (z-grade celebrities dived into a pool); they never show series in order, they interrupt series with something irrelevant, and they show a LOT of ads. Their news is even more atrocious. Its a badly kept secret that their overall audiences have been shrinking, which is why they only ever give ratings in terms of percentages. A large percentage of a shrinking market is ok, until of course the market gets below a certain size. Note this does not include the ABC, which is government funded. That network takes risks, always shows series in order, and even has a great streaming service.
    - bjz_ 13y ago

fungi 13y ago

a) Australians have very high incomes and "CUBs" continue to happily pay for their over priced gizmos. For all his whining about unfair competition Gery Hervey isn't exactly suffering. b) ALP and Liberal govs have happily voted for measures that entrenched regional distribution monopolies (FTA, draconian copyright regimes, criminalisation of DRM circumvention) note: in the early days of the Howard government parallel importing of media was legalised, this had a dramatically positive impact on pricing for consumers.

Volpe 13y ago
> draconian copyright regimes What are you refering to?
- fungi 13y ago
  DRM aside... not an expert by any measure but the tight restrictions on "format-shifting" and limitations of "fair dealing" (as apposed to the broader rights granted under "fair use") come to mind. interestingly (according to wiki) the act specifically allows "circumvention of region coding." http://en.wikipedia.org/wiki/Modchip#Legality http://en.wikipedia.org/wiki/Modchip#Legality but modchips are still pretty much illegal... thanks FTA... (just fou d this article which lays out a pretty interesting history http://www.gizmodo.com.au/2011/02/mods-vs-lockers-region-coding-and-the-legal-dilemma/ http://www.gizmodo.com.au/2011/02/mods-vs-lockers-region-cod...).
- fnordfnordfnord 13y ago
  Copyright schemes (region coding of DVDs for example) exist for the purpose of imposing regional pricing, among other reasons.

anovikov 13y ago

What is wrong about market segmentation? Every product finds it price at the crossing of supply and demand. With incremental costs of delivering digital content approaching zero, supply is almost out of the equation. So naturally on a market with higher purchasing power and higher overall price level (and Australia is a costly place to be), prices will be higher, what's wrong about it?

Nursie 13y ago
Companies operate within a global marketplace, buying resources and employing workers from wherever they want, in the most cost effective way possible for them. Then they try to deny us the same opportunity. It's hypocritical. Your argument is basically like saying it would be fine to charge people different amounts for your product based on what's in their bank account. Maybe you could do this, but people would be just as annoyed about it.
- anovikov 13y ago
  There are many ways people are charged based on what's on the people's bank account. Look at the airlines for instance, they mastered this skill since 1978. I see nothing wrong here. There are high-price markets and low-price ones, to circumvent it, there are smugglers to run the line - you can buy digital content using a proxy in USA or UK and using a one-off (digital) UK credit card which is easy to buy. Same thing goes about say, smartphones in Russia. It is an accepted practice to buy iPhones from smugglers where they are 60-70% of the price in a retail store due to Apple price policy for Russia, i am fine with that. There are different prices for different places based on a lot of factors, trying to fight it will only increase price levels EVERYWHERE because the volume will go down. An ideal-perfect pricing system is where the product is sold to the maximum number of people who want it and can afford to pay at least an equivalent of incremental cost of production and delivery (which is, for digital goods, near zero), yet everyone pays a maximum amount he can afford. One of the criterias for price setting is the country (there must be many others of course, again look at the airlines and learn from them).
  - 13y ago

JonnieCache 13y ago

Back in the day I used to buy games imported from australia to the UK (n64, gameboy) because they had PAL tvs yet were on the japanese release schedule. Me and my brother had completed pokemon several times over before any of our friends in school had even heard of it. Obviously this all changed at some point...

chunkyslink 13y ago

I've just returned to the UK after living in Western Australia for 3 years. I'm a runner and was absolutely shocked at the markup on running shoes. Many high street shops selling shoes for $200 + dollars when you could get them for $80 dollars delivered to Australia from the UK, by buying online. I have no idea why people would shop these high street stores.

chris_wot 13y ago
I have no idea why people would shop these high street stores. Warranty.
- PeterisP 13y ago
  Well, in EU&UK the online stores have all the same warranty requirements as high street and some extra; so that shouldn't be the reason.
  - rmc 13y ago
    In the EU you have better rights if you buy online than in a shop. If you buy online, you can get a refund within 7 days, even if you just changed your mind.
  - chris_wot 13y ago
    You'll have to forgive Australians who don't feel like calling international telephone rates for customer service, or who don't wish to ship their goods around the world to have them repaired. Or to battle a retailer in a different country if they don't want to cover their warranty.
mathattack 13y ago
Indeed, I went shopping at a "Going out of business" sale for a high end children's toy store this weekend. They said, "We're going online to compete with Amazon, can't afford retail space any more." Their so called clearance price for a toy car was the same every day price at Duane Reade.

prawn 13y ago

The inquiry recommends bypassing geo-blocks, which is quite telling.

Khaine 13y ago
Unless your an american with their head up the 'free markets' arse
- ryan-allen 13y ago
  Haha, arse. Spoken like a true Aussie. For some people the 'don't buy' is one thing, but if you need Photoshop, there is no competition. There is no other choice.

randyrand 13y ago

It's not really a tax - it's Econ 101 price discrimination. which works as long as it can't be easily debased by arbitrage. Australians have very high standards of living and the prices reflect that. This is just supply and demand and I don't see a problem with that.

chris_wot 13y ago
Not every Australian. Perhaps it's time for a little less free market and a little more government intervention. Nobody likes being taken advantage of.
dwightgunning 13y ago
Calling it a 'tax' is indeed inaccurate and misleading. The purpose of the inquiry was to look at regional price discrimination against Australian consumers. "The Treasury’s submission to the inquiry defined international price discrimination in these terms: Geographic price discrimination occurs when a business charges different prices for the same product in two or more different locations. International price discrimination is when geographic price discrimination occurs across country borders. To maximise profit, many businesses do not sell based simply on a mark-up of what the product cost to produce, but rather price according to what they consider the market can bear, that is, according to the consumers’ marginal willingness to pay." http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/report.htm http://www.aph.gov.au/Parliamentary_Business/Committees/Hous... To my mind it's just smart business for software makers to price their products at what the market will bare. However I think it crosses a line when sellers of "digital goods" build in technical geoblocking (e.g. regional website redirects, region-specific app stores) and licensing agreements which enforce consumers purchase in a specific reason. The parliamentary committee was the result of certain sections of the market saying their not willing to bare this pricing tactic and looking to raise awareness amongst those who aren't aware that it is happening. Also interesting and was this earlier article from mid-way through the inquiry with a focus on Adobe: "At the parliamentary hearing, he said that customers can buy Adobe boxed products overseas, but that those products would not be covered by the company's local warranty policies." - Adobe managing director for Australia and New Zealand Paul Robson http://www.zdnet.com/au/adobe-to-australia-higher-pricing-is-your-personalised-experience-7000012972/ http://www.zdnet.com/au/adobe-to-australia-higher-pricing-is...

girvo 13y ago

Of course it is. I've worked in sales in Consumer Electronics and boxed Software for about 7 years now, and I know the actual cost prices of most things. It's good to have proper confirmation, at least.

rmc 13y ago

There s a nuclear option that Australia (or other countries) could use. Declare copyrighted goods that are too expensive lose copyright. That film that you won't sell for the same price as the USA? it's now public domain, a local market of people pressing DVDs will spring up.

nahname 13y ago
You have to mod your console to play burned games. In the case of the xbox, they change their checking techniques every year and you would have to upgrade accordingly.
- rmc 13y ago
  Then make pirating the XBox legal. Make the term "XBox" be not a trademark. I know it's a nuclear option and will never be done.