Time to axe the ‘Australia tax’

CHOICE makes submission to the Competition Policy Review
 
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01.Time to act

Bank-profits-big-four-australia

CHOICE has called on the government to axe the ‘Australia tax’ and give consumers the benefits of more competition from overseas markets.

In its submission to the government’s competition review, CHOICE provided new evidence of the artificially high prices Australians pay for identical goods and services purchased from identical websites, including:

  • Paying 33% more than US consumers for the top 10 new release movies in Apple’s iTunes store.
  • Paying 26% more than US consumers for a selection of new release and upcoming Playstation 4 video games.
  • Paying $50 a month to watch Game of Thrones on Foxtel, when a UK consumer can watch it in a subscription package costing just $9 a month.

CORRECTION (12/6/14): This story was originally published using out-dated exchange rate data. The story has since been updated to reflect more up-to-date exchange rates. As a result, the price differences for the games examined has changed from 33% to 26% and the price difference for the iTunes products has changed from 39% to 33%. 

CHOICE has made 26 recommendations to the Competition Policy Review, with the key principle that any future competition policy reform must put the welfare of Australian consumers first.

These recommendations include calls for the government to act on the work done by the IT Price Inquiry, which released its final report last year. In particular CHOICE wants consumers given more access to international markets where they can buy cheaper products.

Big concerns about big data

CHOICE also expressed concerns about the use of consumer data by large companies to create barriers for competitors trying to enter markets. For example, supermarkets are using the data of what their customers buy (gathered using reward cards) to target them with particular insurance policies. 

However big data also has big opportunity. CHOICE is also calling for consumers to get access to their own data to help them make better choices. For example, if consumer knew their electricity use in more detail, they would actually be able to compare electricity plans to find the best one for them. 

The review

The Competition Policy Review was major election commitment of the Coalition Government, and is the largest review of Australia’s competition laws since 1993. 

The review hopes to set the competition framework for decades to come and to “promote competition across the Australian economy and to deliver benefits to Australians”. 

Submissions to the review closed on 10 June 2014.

 
 

 

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