While the Canberra press gallery employs every piece of visceral imagery in the book to cover the ongoing Labor leadership spill, it’s safe to say any news about policy has been blown off the front pages this week. Imagine if question time had actually been scheduled … Or don’t. The mind boggles.
This week, there may actually be something to opposition leader Tony Abbott’s suggestion that the government is in chaos (a claim he’s been repeating faithfully every week since minority government came into effect) as various cabinet ministers temporarily drop their portfolios (and in some cases, their faculties) to tell the waiting media scrum who they’ll be supporting. Treasurer Wayne Swan may have cancelled his plans to attend the latest G20 summit in order to more effectively rip Kevin Rudd to shreds, but OurSay is soldiering on with The People’s Question.
After all, by the time the March deadline rolls around and our mystery MP steps up to the plate to ask the winning question this will all be sorted, right? Ahem, moving on … with a question from Matt Dowling, on a topic close to Crikey‘s heart. His question has hit the top five at OurSay with 71 votes. Don’t forget, if you like this topic, and you want to hear more about it in parliament, make sure you vote for it here. Dowling writes:
“I direct this question to the minister and shadow minister of trade. Australia was one of the first countries to embrace Ricardian economic theories, lowering trade barriers at the same time other countries were developing competencies in sectors such as electronics and industrial manufacturing on the back of government-supported, export-led strategies, which resulted in Australia’s first mover advantage and capabilities in these sectors not being capitalised on. Fast forward to 2012 and Australians are now being charged inflated prices by foreign companies for goods which sell up to 50% cheaper in foreign markets.
“Prime examples are Apple iTunes products being sold twice the price in Australia than the USA and an Ikea desk three times the price in Australia than Sweden. You can find many more of these examples. When will the Australian Ministry of Trade protect Australians from these ‘reverse dumping’ policies of foreign companies, who are pricing their goods higher to the Australian market than to their local markets? Without creating huge disincentives for foreign companies to charge Australians above what they charge in their local markets, then the initial Ricardian logic of foregoing these industries in the first place is severely compromised.”
This is a consistently infuriating issue for Australians. In May last year, Crikey revealed a extensive range of products that cost often less than half of the price they were available here locally, including Apple.
Labor MP Ed Husic was also a persistent critic of Apple’s pricing policies and in July Apple responded by lowering some app prices for Australian users, but not its music prices (over which it has less control). We also recently covered the Apple-facilitated international e-book agreement designed to gouge customers.
But the problem isn’t confined to foreign companies. Often retailers and local distributors are as much to blame for jacking up prices of imported goods. They were able to get away with this until the arrival of the internet and e-commerce allowed Australians to search for products overseas without getting on a plane. The Australia Institute covered this issue in a report last year when it showed that Australian retailers’ mark-ups are far in excess of the level considered appropriate by consumers.
The Productivity Commission touched on the issue in its review of retailing last year, noting:
“International effects such as exchange rate changes and regional pricing strategies of international suppliers are also contributing factors in retail price differences. The latter is becoming increasingly visible to consumers as the internet informs consumers of the practice and more opportunities for consumers and retailers to purchase and source products overseas become available.”
As the PC notes, regional pricing strategies are a particular problem. It is not just Apple that prices differently by region for the same stream of zeroes and ones — the pricing strategy for music is often set by copyright owners, who feel they can charge Australians twice as much for exactly the same product, delivered exactly the same way, as they do Americans. They then complain about Australians’ penchant for music piracy.
The ACCC under Allan Fels noted in 2001 that regional restrictions on DVDs — alleged to be an anti-piracy mechanism by the copyright industry, but in fact an excuse to gouge consumers — was probably anti-competitive and therefore illegal.
Ultimately shopping online overseas and cutting out the local mark-up or the gouging copyright industry is the only strategy that will achieve long-term change in this area, forcing both suppliers and retailers to slash prices.
To this end, the government leaving intact the current $1000 GST import threshold and Australia Post further improving its parcel delivery service are the best means of delivering the necessary competitive jolt to this sector.
*Crikey and OurSay are giving you the opportunity to get your question asked in the House of Representatives. Each week Crikey will feature a new reader question, and will look into the where/how and why of the issue and the politics behind it. A mystery member of parliament has agreed to take part in this OurSay initiative and take the People’s Question to Question Time in March. Start hitting OurSay with questions here: @OurSayAust, @OurSayPeoplesQ (#PeoplesQ #auspol) or on Facebook. Or go to thepeoplesquestion.oursay.org for more information. Nominations and voting close on March 4.