Let’s face it: We all know deep down that we are being fleeced!
Australians are paying more than anyone in the developed world on goods and services.
Any Australian who has been to the US recently is always shocked to find out how much things are cheaper there compared to what we pay here at home.
For example: iTunes music and videos.
Get your hands on an American credit card with a billing address in the US (legally obviously) and voila, you will pay anything between 30% and 50% less on the exact same music and videos. This is for a product which is entirely digital where no physical delivery or shipping costs are involved!
Amazon have recently launched their Kindle Store for the Australian audience with pricing in Australian Dollars. Not surprisingly, they have also joined the ‘rip-off’ bandwagon. Prices are significantly higher than in the Kindle US Store, even after accounting for currency exchange rate fluctuations. Kindle, like iTunes, is another product which is entirely digital where no physical delivery or shipping costs are involved!
Things have actually gotten so bad in this area that the Australian Parliament has launched a formal parliamentary inquiry into the dubious pricing practices of the likes of Google, Apple and Microsoft. When the local execs of these giants faced the inquiry they came up with some ridiculous excuses to explain their dodgy practices.
Now let’s talk about food. Did you know that the ultimate Australian food icon, the Vegemite, is actually cheaper in the UK than it is in Australia by a staggering FORTY PERCENT? This is not even an import but actually a product made here in Australia and nowhere else on the planet! The poms import it from us and even after all the extra costs involved in getting it from here to the UK, their supermarkets are able to sell it for FORTY PERCENT less than what you would pay at your local Woolies or Coles!
This is pure insanity and must be brought to an end!
Sure, lack of local competition, small market and relatively small population play their part in creating this situation.
However, I would respectfully argue that there is another important factor at play here and one that will not be pleasant to the ears of many Australians: Aussies in general are simply too laid back and maybe even gullible people when it comes to their behaviour as consumers.
I know, the truth hurts but that doesn’t change the fact it is still the truth!
Let me ask you this: when was the last time you walked into a Harvey Norman, Rebel sport, or any other national retailer selling big ticket items and seen someone negotiating down the price stated on the ticket? When was the last time YOU did that?
Australians will negotiate hard when it comes to buying a property and sometimes when buying a car but that’s basically it. That’s where it ends.
I ask: why?
Is it part of our culture to just cop it on the chin and take the stated price as gospel? No, I didn’t think so either.
What about consumer boycotts? These can be very effective and have been hugely successful in Europe and other countries and have often brought big companies to their knees and in some cases, even to the edge of bankruptcy.
Why can’t we do it here? Are we too lazy?
So bottom line, yes we do pay too much and yes, we do pay more than anyone else. However, we have no one to blame but ourselves for that!
What else can we do to change this situation? I’d love to hear your thoughts.
I travel to the US at least once a year and for some things like my clothes, make up etc I wait until I am travelling to purchase, then I get what I need for a year and pay up to 1/4 of the cost here.
For digital items it is ludicrous that they can charge higher here.
I am grateful for our wages, working conditions, super etc. Paying through the nose for everything else doesn’t balance out though.
The claim that because we have higher wages and a better social safety net in Australia (compared to say places like the US) means we are destined to pay more for everything, is simply not supported by facts. Plain and simple. Norway, Denmark & Sweden have the BEST working conditions and social safety net in the world yet the cost of living there is LOWER on pretty much anything than here in oz when measures in PPP (purchase power parity).
Yes we in Australia pay more than in other countries, but we also get better working conditions. Higher wages, super, a months holidays, long service leave, etc. I am happy to pay a bit more for all of these positive things.
You definitely make a valid point Pieter and this is a view held by quite a few people.
Many people in this country think that our higher wages, better working conditions and social safety net (e.g Medicare) inevitably lead to higher prices and that these are justified as a result.
Problem is that unfortunately, these views are not supported by the facts. Prime example for that being the Scandinavian nations.
As you can see in the analysis I provided here, Sweden which has higher salaries on average than in Australia and whose government provides a much more generous social safety net than what we get here (which also leads to much higher taxes on both income and consumption than what we have in Australia), still has a lower cost of living than in Australia with some everyday items costing significantly less than in Australia.
I’m sure you’ll agree with me that the standard of living in Sweden is pretty high and is at least comparable to what we enjoy here in the ‘lucky country’:)
Their population is also about a fifth of ours.
The claim that a higher standard of living, higher salaries and a government-provided social safety net inevitably lead to higher consumer prices is a fallacy and a myth that should be busted.
Would love to hear any further comments you have on the matter. This is a very important discussion for us to have in this country.