Price gouging?

Dr Sophie Sturup writes: Re. “Aussies betrayed: industry groups are all for IT gouging” (yesterday) Just to raise a related issue, it isn’t just that the prices in Australia are higher — regional content also imposes really irritating restrictions on buying content when you are overseas.  You can use your Australian computer to go to an Australian site and purchase your overpriced item with your Australian credit card, only to find that you can’t download it because your computer is momentarily sitting in the hotel in France. So instead of having a lovely holiday sitting reading (somewhat overpriced) novels  on your e-reader, you are left reading whatever English-language drivel you manage to lay your hands on in a foreign country.

This doesn’t make a lot of sense to me.

Rebecca Barnett writes: While I agree that paying upwards of 42% more for hardware, software and content, I’m assuming in comparison to US prices, might be hard for Australians to swallow, but this “problem” has been blown out proportion by the media, Crikey included. There is never any mention of the fact that minimum wage in Australia is at least double that of the US, not to mention the fact that this is how capitalism is supposed to work. The intention of the capitalist system isn’t equality, as far as I can gauge. I do not think this is a conspiracy, but I am disappointed it was the first story in today’s issue.

Who are we to say who can come?

Annie Toller writes: Re. “‘Let them all come’ is ‘stop the boats’ for unthinking progressives” (Monday). I’m disturbed by Crikey’s embrace of the political argument that policies aimed at “stopping the boats” are laudable insofar as they prevent drownings at sea. The disingenuousness of the position can be seen at the most basic level. As argued by Nick Reimer in New Matilda, it is not the Australian government’s right to decide for others whether or not to escape from persecution — whether by boat or by any other measure. Clearly those who choose to transit by sea have already concluded that the risk is worth whatever chance it holds of finding refuge — even if that refuge is behind barbed wire, or in some Third World stinkhole. If they feel that their lives are at risk in their home country, what quantitive difference is there in staying rather than risking their lives at sea — apart from the possibility, however slim, of escape? And yet we in Australia pat ourselves on the back for taking punitive action against desperate, vulnerable people. A spectacularly unthinking — and paternalistic — line of thought.

On productivity

Dr Shiji Zhao, assistant commissioner, Productivity Commission, writes: Re. “Productivity is better than you think” (July 15). I am writing with regard to the comments made on July 15 by John Foster in his response to “Rudd’s day of national reconciliation masks a real productivity challenge”  (July 12). Foster suggests that Australia’s productivity performance compares favourably with our historical performance. He also says that the Productivity Commission is responsible for the production of the multifactor productivity (MFP) statistics and that our research has exclusively focused on MFP estimates. These statements are not accurate.

Foster correctly pointed out that labour productivity growth was close to its long-term trend. However, Australia’s productivity performance, more accurately measured by MFP, is a concern. For example, while the long-term MFP growth was 0.8% per annum from 1973-74 to 2011-12, it was negative (-0.7%) from 2007-08 to 2011-12. MFP is widely used by productivity analysts, both in Australia and internationally, as a more meaningful indicator of productivity. This is because labour productivity is a measure of the amount of goods and services produced per unit of labour input (and it is generally computed as value added divided by hours worked). However, as value added reflects the return to both labour and capital, it is most appropriate to consider the ratio of value added to “a unit bundle” of both labour and capital — this is multifactor productivity. Labour productivity may simply be high because the economy for a period is using more capital than the long-term trend.

For further information on Australia’s recent productivity performance, I would encourage your readers to refer to the PC productivity update, which is available on the commission’s website.

The Australian Bureau of Statistics is responsible for the production of MFP and other productivity statistics, which the commission makes use of and expands on where necessary. The commission also uses measures of labour and capital productivity in its analysis where it is appropriate to do so.

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