Few oppose the anti-Australia tax furore

Summary:Amid a sea of consumer complaints submitted to the inquiry on price disparity of IT in Australia, only one retailer has thus far defended the higher prices for technology that Australians are forced to pay.

Amid a sea of consumer complaints submitted to the inquiry on price disparity of IT in Australia, only one retailer has thus far defended the higher prices for technology that Australians are forced to pay.

The Parliamentary inquiry set up to examine the price disparity between hardware and software sold in Australia and that sold internationally, began accepting submissions in late May. So far, 31 of those submissions have been published online.

Most highlight specific examples of where customers believe they have been charged more for buying in Australia than they would have been charged overseas. For example, one submission highlights an Asus RT N66U wireless router that costs AU$186 to buy from Amazon, but an average of $275 to buy from Australian online retailers. Another submission compared a Crucial 256GB solid state drive (SSD), which cost $315.27 to buy from Amazon, but was said to have cost between $350 and $450 in Australia.

The submission, from Andrew Boisen, said he went to buy another drive from Amazon, but found that the company was no longer shipping to Australia.

"Although I have no direct proof, I think that the Australian distributors and sellers of these hard drives have requested that Amazon cease selling directly to Australian consumers, so that the Australian market on these items can be controlled," he said.

"I have personally noticed an increasing occurrence of IT related items that I used to purchase, no longer being able to be shipped to Australia, including laptops, graphics cards and memory."

Yet, one representative from Australian computer retailer Pioneer Computers, Molly Lai, said that there were a number of legitimate reasons behind why tech cost more in Australia.

"With a population of only 22 million, Australia is considered a small market with little returns. While large quantities contribute to economies of scale, the Australian market is so small that it requires a substantially higher profit margin to justify the effort," she said, adding that Australia's geographic isolation from the rest of the globe meant transport costs were also higher.

Lai also blamed the strong consumer protection laws and labour costs.

"Consumers see it as their rights to return for refund or replacement, even when it is not the manufacturers' fault," she said. "In light of the new Australian Consumer Law calling for compensation for consequential losses and the National Television and Computer Recycling Scheme making importers and manufacturers bear the burden of recycling, IT vendors are finding it very hard to do business in Australia."

She rejected suggestions that prices were artificially inflated, stating that it would be uncompetitive to do so.

Phil Best, manager of Applied PC Systems, suggested in his submission that Australian software companies faced difficulties operating online, because customers were forced to pay 10 per cent GST for software sold by Australian firms but not for international alternatives. He suggested that all software under $1000 should be exempt from GST, or consumers should be charged 10 per cent GST for all software downloaded from overseas.

The committee is accepting submissions until 6 July.

Topics: Government, Government : AU

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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