Labor backbencher Ed Husic’s been fighting against Australian technology price inequalities for some time now, and he’s back in the headlines, calling for an inquiry into unfair prices. I reckon he’s right to complain, but his target is poorly chosen. Update: Ed’s been in touch with a copy of his speech, and he’s well aware that Apple’s not the worst offender in this category; indeed he’s as concerned as I am with many of the same target companies.
Giz reader M11 sent in this tip — many thanks, and a reminder that you can submit tips here — based on this News.com.au story. The News piece is a rather simplistic take on the whole issue, but then they’re pitching to the total mass market, and in a very real way, so is Husic.
Husic’s been on the pricing war path for some time, and to a certain extent he’s entirely correct; there are plenty of technology products that we as Australians pay over the odds for, even taking into account exchange rates and a moderate uptick for claimed shipping and/or cost of living/wages issues.
My only concern is that he appears to be taking this fight public by picking the biggest and most obvious target, and that’s Apple. It is worth noting that Husic’s not just after Apple — reports indicate he’s also named Adobe, Canon, Lenovo and Microsoft — but it’s clear that Apple’s been chosen because it’s such a big public name. That’s certainly what the News report (and others) have picked up on.
Update: Ed Husic’s been in touch pointing to his speech; while he uses Apple as an example — and the fact that Apple Australia hasn’t bothered to get back to him is, frankly, appalling — that’s mostly as a backdrop for his wider complaint. To quote from the speech (which you can read in full here)
The other night it took me four minutes and 55 seconds to order the latest iPad from Apple Australia’s website. Very impressive. Easy to select options, along with the chance to customise the order and add extra items to the purchase. In the meantime, it has taken 363 days to get a written response from Apple Australia’s Managing Director asking him to let Australian consumers know the answer to the following question: ‘Why do your products cost more in Australia than they do in the US?’ To be fair to Apple, they are not the vendors walking with clay feet on this issue. Most of the big players in the sector—Adobe, Apple, Canon, Lenovo and Microsoft—have all failed to substantially address these concerns.
It’s not that Apple’s a company immune to criticism; it’s just that, comparatively speaking, it’s a weak target when it comes to actual price comparisons. Using just a couple of examples of comparing US and Australian prices:
iPad 64GB Wi-Fi+4G
Australian Price: $899 inc GST
US Price: $829 excluding sales tax
iMac 21.5 inch 2.5GHz Core i5
Australian Price: $1399 inc GST
US Price: $1199 excluding sales tax
Australian Price: $109
US Price: $99 excluding sales tax
If you take the Australian and US dollar as being at parity (they’re not quite, but once you take conversion fees into account, it’s not a bad starting point), it would appear we’re paying too much — until you put taxes into the picture.
Apple doesn’t list sales taxes on its products in the US, because it varies state by state. These vary widely; in some states they don’t exist, while in others they range over 10 per cent. That makes a like for like comparison very difficult, because if you shave the ten per cent tax off the GST price we pay, they’re very close (and sometimes lower) than the US sales tax exempt price.
There’s also the issue of comparable income; taking some very quick and dirty research, this piece suggests that the median US income is around $US26,364. By comparison, the median Australian wage sat at around $54,000, and it hasn’t changed for a number of years. It’s not an exact like for like, again, but something’s got to pay for those wages.
In any case, all of this doesn’t mean that as an Australian you can’t score a minor bargain on Apple gear in the US in the right state, but the key word there is minor.
I get where Husic is coming from; he’s a politician, and headlines are important; going after the biggest target (and one that definitely has a history of charging premium prices to Australian users) makes good publicity sense.
Once you crack it down into the numbers, it’s a less compelling story. I think that’s a pity; there are plenty of areas — most notably in things like cameras, lenses and things like digitally delivered software — that can make this case much more compellingly. With a little bit of maths work, Husic could even get better headlines. After all, if the headlines were accurate, which sounds better?
“Apple charges users a tiny bit more here (maybe)”
“Adobe software costs more than double US price for download copy“
Although, again, Adobe’s claimed that it’s working on this — but not with any specific figures in mind.