Vendors slammed for Australia tax silence

Vendors slammed for Australia tax silence

Summary: IT vendors remaining silent on the price disparity of IT products between Australia and the rest of the world may face the wrath of one of their biggest buyers, the Australian government, according to Labor MP Ed Husic.

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IT vendors remaining silent on the price disparity of IT products between Australia and the rest of the world may face the wrath of one of their biggest buyers, the Australian government, according to Labor MP Ed Husic.

The Labor MP for Chifley has been raising the issue of unfair price differences for IT software and hardware in Australia since March, as part of the FairIT for Oz campaign. Amidst the debate over the Mineral Resources Rent Tax legislation on Tuesday night, Husic rose to slam vendors such as Microsoft, Adobe and Apple for not coming to the table and discussing the price differences.

"I suspect these companies believe they can ride out this sustained public focus," he said.

A recent economic note from Treasurer Wayne Swan noted that in the last quarter, there had been a contraction in the prices for computing-related equipment; however, Husic said that Australians are still paying more.

"When we're paying up to 80 per cent more for software, compared to US or UK customers, despite strengthened purchasing power that flows from a historically high Aussie dollar, you know something doesn't add up," he said.

The Productivity Commission has submitted its report to the government on its review of the Australian retail industry, including its look on IT price differences between Australia and the rest of the world. The report is scheduled to be released next month, and Husic — noting that none of the big vendors made submissions to the inquiry — said that companies that are seeking to "ride out" the criticism of price disparity should consider how much the government invests in IT companies.

"There is over $2 billion worth of IT procurement made by the federal government," he said. "On top of this, it is worth noting that under a coordinated procurement contracting framework that was signed between the Australian government and Microsoft in 2010-11, the Australian government spent over $95 million on licences and software assurance through this volume-source arrangement.

"Government spends a great deal on IT software and hardware," he added.

Husic said he intends to ensure that the software and hardware that the government is procuring is not obtained at an inflated price.

"Frankly, I think that we need to ensure that there is value for money for government, for consumers and for small business," he said. "If they think they can ride this out, I would beg to differ, and urge them actually to be a lot more transparent in the way that they approach this issue."

Topics: Apple, Government, Government AU, Microsoft, Software Development

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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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10 comments
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  • If they don't want to comment on these issue perhaps it's time to make local distribution protectionism illegal? Make it the law that there can be no exclusive distribution agreements. Any company found to be hampering the importation of products will be held liable (that would include restrictions placed by third parties, have any contract require statements that there be no importation restriction placed on these goods when sold in any country world wide).
    m00nh34d
  • About time that the government did something about the artificially high prices fostered on Australians by the likes of Apple, Microsoft, et al
    GLComputing
  • Small differences (
    DanielB1
    • um, quite a bit of my post missing, and I can't be bothered re-writing it all.
      Basically:
      30%, grrr, you're adding on the Aussie Tax
      >50%, Don't you think I've got the internet?
      >70%, you don't want my sale do you? Calling me an idiot would be more polite.
      DanielB1
      • oh, left pointy bracket, then right pointy bracket brakes comments.

        bold
        DanielB1
  • Australia is regarded as a very small market, hardly worth the trouble, so they will charge what they damn will please. Even if software is downloaded and there are no packaging and transport costs.
    In many cases I would have thought the importers who go to the trouble of working out the permits and taxes and other logistics charge a lot rather than the US companies who may not know what their products cost in Australia.
    This might be true for the middle market who are big enough to export and go through the hurdles of US export rules and don't have a retail presence in Australia.
    In the case of the smaller companies in the US they won't export at all, meaning Australians use a US based forwarding agent to get around the US only restriction.
    daryl.cheshire@...
  • We have an archaic, inefficient distribution structure here; a leftover from decades ago when things moved a lot slower.

    And their reward for being an exclusive overcharger, ... er, distributor is to be given price protection. Even when the overseas manufacturer, like Corel, offers downloads, selecting Australian currency automatically hikes the price 50%.

    Distributors need to become lean and responsive like overseas retailers, that are probably selling more than them. 9 to 5 is not valid anymore.
    Patanjali
    • With that, there are available currency exchange websites and probably software that can provide daily, hourly or however often the differences between international currencies actually change. In an ideal situation, you can integrate this sort of service into your e-commerce site, base it on your local currency (primarily US dollars, no doubt), and use the exchange to convert it into any other currency. It's certainly not as though you, as a distributor, are getting ripped off, and nor will the customer.

      But like anything else, it boils down to money. If a local company were to start writing comparable software (graphics design, operating systems, whatever), and more importantly were able to get big enough contracts to make an impact (government and corporate), then there might be a bit more equilibrium.
      dmh_paul
  • Ed Husic has been talking about this since March. Pity he didn't actually do anything.
    Its too late now, the horse has already bolted. The Australian dollar is back below parity with the $USD and down against the Yen so the Government's argument is now severely weakened.
    Yoda7
  • Talk is cheap considering we are still paying the price!
    Uno_Boots