Aussies pay 56% more for IT: Choice

Research conducted by consumer group Choice has found that Australians pay, on average, 56 per cent more for IT than the US.
Written by Josh Taylor, Contributor

Consumer group Choice has claimed that Australians pay, on average, 56 per cent more than their US counterparts for IT products, according to research the group has conducted.

Choice undertook the research as part of its submission to the parliamentary inquiry into IT pricing, launched by Labor MP Ed Husic.

Choice looked at the prices of the following items:

  • 50 songs and 20 albums on iTunes

  • PC games downloaded via Steam or bought from an EB Games outlet

  • Windows Vista

  • Apple Time Capsule

  • Sony 8GB MP3 player

  • HP Officejet printer

  • A number of software offerings, including Visio, SharePoint, Excel, Access, OneNote, Infopath, Outlook, Word and Adobe CS6
  • Wii console games

  • 12 Dell computers

  • Various models of the iPad, iMac, Mac Pro, MacBook Pro and MacBook Air.

The average price differential across all the products was 56 per cent, Choice stated. The biggest contrast was of games downloaded from Steam, with an average 232 per cent price difference.

Outside of the 51 per cent price difference for songs on iTunes, Apple came out on top. The price difference for Apple hardware was only 12 per cent, which is just marginally higher than the GST. Choice said it could be claimed that Apple's Australian hardware prices were essentially on parity with the US.

Microsoft, among others, has blamed the GST, the high cost of labour and meeting government regulations for price differences, but Choice said that this doesn't explain why the prices are so different.

"There is no evidence that factors such as wages and labour costs, occupancy costs and rent, GST, retail profit margins and logistics and transportation, can, even cumulatively, account for some of the price differentials identified in IT hardware and software products,' Choice said.

"Although we believe that retail profit margins disadvantage Australian consumers in relation to some goods and services, our key concern in IT hardware and software is international price discrimination, particularly in those instances where ... the costs of delivery to the customer are practically zero and uniform around the world."

Choice said that GST would only count for a 10 per cent price difference, and, according to JB Hi-Fi's results, shop rent costs only make up 3 per cent of expenses. Even taking into account a possible 22 to 27 per cent gross profit margin did not justify the 50 per cent price difference.

The group has recommended to the committee that the exemption on GST for imported goods under $1000 should remain in place, and has recommended that the Federal Government investigate whether global online retailers that charge higher prices to customers arriving from an Australian IP address should be allowed to continue to do so.

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