The price you pay for being an Aussie
JOHN ROLFE - COST OF LIVING EDITOR
News Limited Network
February 13, 2013
Australians pay some of the highest prices in the world for most consumer goods and have for many years, says economist Richard Denniss.
COMPARED to Yanks, we shell out half as much again to fill our tanks. Shave or buy shoes and you'll lose. We're so expensive that the price Canadians pay for a pair of jeans at home would only buy one leg here. Need a drink? Well, you'll get stiffed on that too.
"I don't know that many people realise just how ripped off we've been," said executive director of The Australia Institute, economist Richard Denniss.
Analysis by News Ltd reveals we are paying as much as 170 per cent more for comparable products. This is consistent with 2011 research by The Australia Institute, which also found that local prices were sometimes double those overseas.
Dr Denniss said yesterday that "we pay some of the highest prices in the world for most consumer goods and have for many years".
Which is what's prompting us to buy more from offshore, and to be bolshier when shopping in stores here.
CommSec chief economist Craig James, who has tracked international prices of everything from iPads to BMWs, said: "In the past, Australians sat back and accepted the price on offer, but the culture has changed. Now we don't just accept the sticker price.
"The internet has opened up the world to people, as has the higher Australian dollar," he said.
Dr Denniss said online retailing "is doing what competition law has failed to do".
Our market was very concentrated, he said., which led to high prices.
The Australia Institute's 2011 research cited data from the Australian Bureau of Statistics that found the average mark-up on clothes and shoes was 142 per cent. For electronics, the mark-up was 85 per cent and on furniture, 76 per cent.
"But the profit margins that our retailers are used to are gone forever," Dr Denniss said.
Both Mr James and Dr Denniss believed local retailers were responding to the rise of the internet.
Cost of living
Major department store chains Myer and David Jones, as well as supermarkets Woolworths and Coles, have forced multinational suppliers to cut prices.
And the current federal parliamentary inquiry into IT pricing had helped to raise awareness of just how expensive many goods are in Australia, Dr Denniss said. It emerged on Monday that tech giants such as Apple, Microsoft and Adobe had each received a summons to appear from a committee of politicians probing the prices we pay for software, games, devices and downloads.
Dr Denniss said the Free Trade Agreement between Australian and the US had the capacity to force American companies to offer their wares on more reasonable terms.
"Australia doesn't need to change the terms of the Free Trade Agreement, its terms need to be implemented," Dr Denniss said.
While Aussies do pay more than most around the world for what we need and want, we also earn more than most.
OECD data show average earnings in US dollar terms are 37 per cent higher here than America- and nearly 50 per cent better than in the UK. We earn a third more than Canadians, according to the OECD. It doesn't track New Zealand, but our wages are reportedly 50 per ce nt higher than Kiwis'.
Read more: http://www.news.com.au/money/cost-of-living/the-price-you-pay-for-being-an-aussie/story-fnagkbpv-1226576495570#ixzz2KiVek75o
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