11 June 2014
CHOICE has called on the Federal Government’s Competition Policy Review to axe the ‘Australia tax’ and give consumers the benefits of more competition from overseas markets.
The consumer group has 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.1
- Paying 26% more than US consumers for a selection of new release and upcoming Playstation 4 video games.2
- 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.3
This comes on top of recent CHOICE research that shows Australians can pay up to 60%4 more for clothing and up to 200%5 more for cosmetics.
CHOICE CEO Alan Kirkland says the government’s review comes at a critical time for Australian consumers, with markets being transformed by digital technologies and competition from overseas, while some businesses are resisting the pressure for change.
“There is a real potential to benefit Australian consumers, giving them access to cheaper goods and services,” Mr Kirkland says.
“But Australians face many barriers to accessing these benefits, whether it’s outdated laws that prop up entertainment monopolies or the ‘geo-blocking’ on overseas websites that recognises a consumer is from Australia and either blocks them altogether or applies a specially marked up price.”
CHOICE says another key challenge for the review is to focus on competition from the consumer perspective, rather than from the perspective of big or small business.
“The energy market is a great example of what goes wrong if we fail to think about consumers. On the surface, there is much more choice in energy providers than 20 years ago, but consumers still find it a bewildering experience to shop around for a better deal.
“Unless the Competition Policy Review makes it easier for consumers to navigate complex markets like energy, banking and telecommunications, the whole exercise will be a missed opportunity. It does not matter how much marketing and choice there is unless consumers feel confident that they can find the best deal for them.”
CHOICE has made 26 recommendations6 to the Competition Policy Review, with the key principle that any future competition policy reform agenda must put the welfare of Australian consumers first.
Click on the link to view the full submission
and CHOICE’s recommendations.
CORRECTION: This release was originally published using out-dated exchange rate data. It has been updated to reflect more current exchange rates. As a result the price differences for the games examined changed from 33% to 26% and the price difference for the iTunes products changed from 39% to 33%.