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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 standard

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...
- Kurtz79 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." I think the name, in quotation marks, is spot on. It's just like saying "the Apple tax", a substantial upmark in the final price of a product compared to similar ones, due to reasons that have nothing to to with taxes, but having basically the same effect.
adaml_623 13y ago
The phrase 'Australia Tax' is in quote marks because we all know it is not a tax. It is an economic phenomena caused by all the factors listed in the article. Those factors have combined to make it very noticeable that there is a non free market operating. It's very Australian to refer to something by a nickname and that is what's happening here.
- inopinatus 13y ago
  But there is a free market happening. Free markets are defined by the absence of regulation and government intervention. Adobe are using their market power in a free market to do price segmentation across national boundaries. If you try to regulate that (which you can't in practice anyway) the price of Photoshop will go up everywhere.
  - hhandoko 13y ago
    But it is a double standard. The RRP is up to %50 higher, but at the same time there are restriction on parallel importation that price cuts the RRP.
PeterisP 13y ago
And if the Australians don't like the price discrimination, they can facilitate arbitrage - which is exactly what is proposed. In a free market, nobody should have the right to an artificial protection from arbitrage.
- dwightgunning 13y ago
  It gets tricky when some software companies include licensing terms that effectively force the consumer to buy from within Australia at elevated prices in order to access their warranty/support. I guess in the purest sense this is still something the buyer can factor into their decision. Market forces will dictate an overall adjustment, etc. Still seems fairly shady to me and like others have said I'm glad it's being brought to the public's attention.
robryan 13y ago
Internet shopping from overseas is massive here now. The days of price discrimination are fast coming to an end if business wants to stay competitive.

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...

Kurtz79 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." I think the name, in quotation marks, is spot on. It's just like saying "the Apple tax", a substantial upmark in the final price of a product compared to similar ones, due to reasons that have nothing to to with taxes, but having basically the same effect.

adaml_623 13y ago

The phrase 'Australia Tax' is in quote marks because we all know it is not a tax. It is an economic phenomena caused by all the factors listed in the article. Those factors have combined to make it very noticeable that there is a non free market operating. It's very Australian to refer to something by a nickname and that is what's happening here.

inopinatus 13y ago
But there is a free market happening. Free markets are defined by the absence of regulation and government intervention. Adobe are using their market power in a free market to do price segmentation across national boundaries. If you try to regulate that (which you can't in practice anyway) the price of Photoshop will go up everywhere.
- hhandoko 13y ago
  But it is a double standard. The RRP is up to %50 higher, but at the same time there are restriction on parallel importation that price cuts the RRP.

PeterisP 13y ago

And if the Australians don't like the price discrimination, they can facilitate arbitrage - which is exactly what is proposed. In a free market, nobody should have the right to an artificial protection from arbitrage.

dwightgunning 13y ago
It gets tricky when some software companies include licensing terms that effectively force the consumer to buy from within Australia at elevated prices in order to access their warranty/support. I guess in the purest sense this is still something the buyer can factor into their decision. Market forces will dictate an overall adjustment, etc. Still seems fairly shady to me and like others have said I'm glad it's being brought to the public's attention.

robryan 13y ago

Internet shopping from overseas is massive here now. The days of price discrimination are fast coming to an end if business wants to stay competitive.