Here's Another Government Review That Says The Australia Tax Is Bad

A few months ago, the Government flagged it would undertake a “root-and-branch” review into Australia’s competition laws. At the time, the Chair of the review said that it would use it as an opportunity to once again re-examine the nature of IT Pricing in Australia. A few months on, and the final report is out. And whaddayaknow: the Australia Tax is bad.

Interestingly, the Competition Policy Review Panel said that it wouldn’t recommend that the government introduce new laws to combat the Australia Tax, or what it refers to more formally as “International Price Discrimination”. Instead, it wants you to fire up your VPN, use an international mailing service and buy all your tech from overseas to dodge price gouging from big companies.

By doing so, the panel says that local firms will get the message that Aussies will vote with their wallets and order products from international vendors rather than their Australian counterparts. Market forces will then cause local vendors to drop their prices to parity with the US market.

Here’s the section on “International Pricing Discrimination” (emphasis added):

The Panel favours encouraging the use of market-based mechanisms to address international price discrimination, rather than attempting to introduce a legislative solution. The Panel notes the recommendations of the July 2013 report of the House of Representatives Standing Committee on Infrastructure and Communications into IT pricing in Australia.

That Committee recommended the removal of restrictions on parallel imports, consistent with Draft Recommendation 9 of this Draft Report. In addition, the Committee made a number of recommendations (as set out in Box 16.4) that the Panel endorses in principle as a means of encouraging a market-based, consumer driven solution to concerns about international price discrimination, as well as a number of recommendations that could form part of the overarching review of intellectual property proposed at Draft Recommendation 7.

Curiously, we’re still waiting on a formal response from the Abbott Government on the existing Parliamentary Report into IT Pricing in Australia conducted under the previous Labor government. That “endorsement” of the recommendations may be the only acknowledgement and response we get.

Read the full report here.

Money image via Shutterstock

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