
"Australia Tax" is real: Infrastructure and Communications report - zarify
http://www.zdnet.com/the-australia-tax-is-real-geo-blocking-to-stop-7000018644/
======
jeza
This is particularly telling...

"In relation to games, for example, the committee has not received any
evidence which explains why it is almost invariably cheaper for Australian
gamers to purchase and ship physical media from the United Kingdom to
Australia than it is to purchase a digital copy of the same game."

~~~
rustynails
A while back, the Australian dollar was about US 60c. I would suggest this was
the basis for which software was pegged against. When the exchange rate
changed, the priced stayed fixed because it maintained status quo for the
locals. Over time, it became the norm for others to follow suit. It's actually
quite simple: if you think it's too expensive or loaded pricing, don't buy it.

~~~
bjz_
I live at university accommodation in Australia which houses a large
proportion of international exchange students. Every one of them, from France,
the UK, Canada, Sweden, the US etc. has been shocked by the prices here. Some
of them have even said that if they had known how expensive it was, they
wouldn't have come.

(This is in general, not just software.)

~~~
gregsq
I'm in Australia from the UK and yes, the prices can be ridiculously high. I
have my own version of the McDonald's index, the bread index. In supermarkets
in the UK quality organic whole meal fresh bake is £1.10 which is about $1.80
AU. A loaf of white junk bread in Australia costs over $4.00. And so it is
with lots of things.

So many rent seekers.

~~~
criley2
In the American south where cost of living is known to be low, I can get store
brand white bread for $0.99 (~$1.06 AUD). I can get fancy pants processed
bread that is brown with lots of labels like "NATURAL" for $3.00. Store-fresh
bread is $2 - $4 at grocery stores.

I can't imagine junk white costing $4. That's outrageous, but then again,
maybe it's like that in some American regions with a crazy cost of living.

~~~
rdouble
My sister migrated to regional Australia and it's hella expensive.

Bananas in Arizona are $0.57/lb and they were $12/k when I lived there.
Apparently there was a banana shortage at the time but the usual price was
still 4-5x what I would normally pay.

Clothing is also very expensive. Every time my sister comes back to the states
she brings two gigantic duffel bags and stocks up on clothing.

The prices on anything else you want/need to buy like electronics, computers,
cars, or bicycles are insane compared to the USA. Or even Japan, which isn't a
country known for bargain prices.

I do think there is a bit of frontier pricing happening. Everything seemed
cheaper in Melbourne than her town.

That said, she gets paid $95K for a part time job with full benefits. She had
a similar job in the states that was full time and it paid $34,000 with
minimal benefits.

~~~
vithlani
"That said, she gets paid $95K for a part time job with full benefits. She had
a similar job in the states that was full time and it paid $34,000 with
minimal benefits."

And there you have it.

If you want to live in a society with high pay, good benefits, free Medicare,
compulsory pension contributed to by your employer, etc -- then be prepared to
pay.

Also, there is nothing stopping you from importing cheap clothing, goods,
books, whatever from overseas.

~~~
jeza
Not everyone in Australia has the ability to earn $95K. There are the rare
exceptions where you can get an unskilled mining job in a remote area, but
that's every bogan's dream. Actually landing such a job is another matter.

That said, the minimum wage at $16.37/hr is much hire than other countries. In
Melbourne at least, you'd probably gobble that up pretty quickly on living
expenses.

------
chris_wot
Finally! There is widespread anger amongst Australians about geo blocking and
market segmentation practices. It's also why content and software is widely
pirated.

~~~
beedogs
There's a culture of piracy here that's pretty interesting; people bring
entire TB hard drives and small NAS devices into work to share entire
collections among each other. (This has abated somewhat now that internet
prices aren't so extortionate.)

~~~
Khaine
That culture is down to several factors:

* price

* availability

* quality of our TV Networks

~~~
chris_wot
The third point effects the second point. Our TV networks are absolutely crap.
They only ever develop reality TV shows, the bottom of the barrel being
"Celebrity Splash" (z-grade celebrities dived into a pool); they never show
series in order, they interrupt series with something irrelevant, and they
show a LOT of ads. Their news is even more atrocious.

Its a badly kept secret that their overall audiences have been shrinking,
which is why they only ever give ratings in terms of percentages. A large
percentage of a shrinking market is ok, until of course the market gets below
a certain size.

Note this does not include the ABC, which is government funded. That network
takes risks, always shows series in order, and even has a great streaming
service.

~~~
bjz_
The ABC and SBS are great channels. Very high quality content (I don't bother
anything else on Aussie TV)

------
chunkyslink
I've just returned to the UK after living in Western Australia for 3 years.
I'm a runner and was absolutely shocked at the markup on running shoes.

Many high street shops selling shoes for $200 + dollars when you could get
them for $80 dollars delivered to Australia from the UK, by buying online.

I have no idea why people would shop these high street stores.

~~~
chris_wot
_I have no idea why people would shop these high street stores._

Warranty.

~~~
PeterisP
Well, in EU&UK the online stores have all the same warranty requirements as
high street and some extra; so that shouldn't be the reason.

~~~
rmc
In the EU you have better rights if you buy online than in a shop. If you buy
online, you can get a refund within 7 days, even if you just changed your
mind.

------
fungi
a) Australians have very high incomes and "CUBs" continue to happily pay for
their over priced gizmos. For all his whining about unfair competition Gery
Hervey isn't exactly suffering.

b) ALP and Liberal govs have happily voted for measures that entrenched
regional distribution monopolies (FTA, draconian copyright regimes,
criminalisation of DRM circumvention)

note: in the early days of the Howard government parallel importing of media
was legalised, this had a dramatically positive impact on pricing for
consumers.

~~~
Volpe
> draconian copyright regimes

What are you refering to?

~~~
fungi
DRM aside... not an expert by any measure but the tight restrictions on
"format-shifting" and limitations of "fair dealing" (as apposed to the broader
rights granted under "fair use") come to mind.

interestingly (according to wiki) the act specifically allows "circumvention
of region coding."
[http://en.wikipedia.org/wiki/Modchip#Legality](http://en.wikipedia.org/wiki/Modchip#Legality)
but modchips are still pretty much illegal... thanks FTA... (just fou d this
article which lays out a pretty interesting history
[http://www.gizmodo.com.au/2011/02/mods-vs-lockers-region-
cod...](http://www.gizmodo.com.au/2011/02/mods-vs-lockers-region-coding-and-
the-legal-dilemma/)).

------
randyrand
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.

~~~
adaml_623
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
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
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.

------
JonnieCache
Back in the day I used to buy games imported from australia to the UK (n64,
gameboy) because they had PAL tvs yet were on the japanese release schedule.
Me and my brother had completed pokemon several times over before any of our
friends in school had even heard of it. Obviously this all changed at some
point...

------
prawn
The inquiry recommends bypassing geo-blocks, which is quite telling.

~~~
Khaine
Unless your an american with their head up the 'free markets' arse

~~~
ryan-allen
Haha, arse. Spoken like a true Aussie.

For some people the 'don't buy' is one thing, but if you need Photoshop, there
is no competition. There is no other choice.

------
rmc
There s a nuclear option that Australia (or other countries) could use.
Declare copyrighted goods that are too expensive lose copyright. That film
that you won't sell for the same price as the USA? it's now public domain, a
local market of people pressing DVDs will spring up.

~~~
nahname
You have to mod your console to play burned games. In the case of the xbox,
they change their checking techniques every year and you would have to upgrade
accordingly.

~~~
rmc
Then make pirating the XBox legal. Make the term "XBox" be not a trademark.

I _know_ it's a nuclear option and will never be done.

------
anovikov
What is wrong about market segmentation? Every product finds it price at the
crossing of supply and demand. With incremental costs of delivering digital
content approaching zero, supply is almost out of the equation. So naturally
on a market with higher purchasing power and higher overall price level (and
Australia is a costly place to be), prices will be higher, what's wrong about
it?

~~~
inopinatus
Nothing is wrong with it. There's no basic human entitlement to a cheap copy
of Adobe Photoshop, so the ethical dimension here is extremely limited, and
I'm disappointed to see you're being downvoted for making a very salient
point.

I have no sympathy for those of my fellow Australians who think they have some
valid complaint that the price of digital assets is "too high".

Australians simply do have a higher willingness to pay, and lower price
elasticity of demand, for a whole host of economic reasons. Companies charge
the price that maximises their returns, and this means price segmentation
wherever it is legal.

Moreover it is, of course, also impossible to legislate against: the same laws
would effectively peg the Australian dollar. This is just political
grandstanding; nothing will change.

~~~
jacques_chester
> _Moreover it is, of course, also impossible to legislate against: the same
> laws would effectively peg the Australian dollar._

I don't get to say this often on HN: what utter rot.

When parallel importation of CDs and movies was abolished, the dollar didn't
give a damn.

When region encoding was dropped on us via the AUSFTA Chapter 17, the dollar
nary stirred.

The AUD is a small rowboat that navigates between the Scyalla of Chinese iron
ore demand and the Charybdis of Ben Bernanke's public nut-scratching.

~~~
inopinatus
Irrelevant. You simply cannot frame laws that will be effective at preventing
the transborder price segmentation of digital assets without anything less
stringent than pegging the currency, or at least the price level.

~~~
jacques_chester
Do you have hot and cold running nonsense where you live?

Selling to Australians takes place in Australian dollars and the transactions
are cleared by Australian banks. This makes them pretty easy to get a legal
grip on.

And you will also find that the large companies who are doing most of the
price discrimination have local subsidiaries which can be dragged into court
without too much fuss. If they try something like yanking funds to avoid court
judgements, they're violating various laws and privileges and our government
can and would be able to seek enforcement from courts in the USA.

People think that trading across boundaries gives you magical immunity from
national laws. It doesn't. Where you have a nexus with a country, you can be
enforced against through that nexus. Where the laws are similar, brother
courts will typically reciprocally enforce them.

~~~
inopinatus
If you allow parallel importation then you are in most cases obviating the
need for a local subsidiary. Service? Sales? Support? Not a problem. Just
contract it out.

And the Australian government is not going to take legal action in the US to
_create_ border import tariffs.

I continue to be astounded by all the self-righteous outraged people here
demanding cheaper Photoshop and cheaper Steam games like it was some basic
human right.

~~~
jacques_chester
> _If you allow parallel importation then you are in most cases obviating the
> need for a local subsidiary. Service? Sales? Support? Not a problem. Just
> contract it out._

That is not the observed and observable outcome of parallel importation in
other goods.

> _And the Australian government is not going to take legal action in the US
> to create border import tariffs._

Your terminology is incorrect. It's not a tariff. Making geo-segmentation
harder or illegal is not a tax on imported goods.

> _I continue to be astounded by all the self-righteous outraged people here
> demanding cheaper Photoshop and cheaper Steam games like it was some basic
> human right._

I'm likewise astounded that people think Australia's quite utilitarian,
transactional political culture is going cleave to any particular ideological
position.

------
girvo
Of course it is. I've worked in sales in Consumer Electronics and boxed
Software for about 7 years now, and I know the actual cost prices of most
things. It's good to have proper confirmation, at least.

