The iPhone Australia Tax: What's The Damage?

A few flashy new gadgets from Apple were unveiled overnight. We already know exactly what we're going to pay for them (spoiler: lots), but is there an Australia Tax attached? What's the damage bill?

Image: Justin Sullivan / Getty

For those out of the loop on the so-called Australia Tax, it's the idea that large companies charge Aussies more for everything from tech and content right through to gadgets and even clothing simply due to the isolation of the Australian market. There's been a big government inquiry on it, which you can catch up on here.

Apple's new iPhone 6 starts at $869, while the larger iPhone 6 Plus starts at a slightly eye-watering $999. Both go on sale on Friday, 19 September.

Let's take a look at the full price list in Australia compared to the full price list from the US, courtesy of Angus from Lifehacker:

Model AU Price US Price Converted Difference
iPhone 6 16GB $869.00 $649.00 $778.15 $90.85
iPhone 6 64GB $999.00 $749.00 $898.05 $100.95
iPhone 6 128GB $1,129.00 $849.00 $1,017.95 $111.05
iPhone 6 Plus 16GB $999.00 $749.00 $898.05 $100.95
iPhone 6 Plus 64GB $1,129.00 $849.00 $1,017.95 $111.05
iPhone 6 Plus 128GB $1,249.00 $949.00 $1,137.85 $111.15

The Australia Tax increases ever so slightly as you go up in the storage range for both the iPhone 6 and the iPhone 6 Plus, but the general rule here is that Aussies will end up paying between $90 and $111 more for their iPhones outright in Australia.

It's also worth noting that you should never look at the "sticker" price Apple calls out in its keynotes. Comparing that to the Australian market will land you in a world of pain.

The reason Apple says that the price for a device is $US199 in a keynote is because it's talking about the cost of the device on a subsidised carrier plan. That means telcos like AT&T and Verizon will subsidise the cost of the device for the consumer so that people only have to pay a few hundred dollars up front for their expensive new gadgets. [Lifehacker]



    For the average person, 32GB is a good amount of storage for a smartphone/tablet. 16GB is ok if it offers removable storage. Why the hell would Apple offer 16 and 64 but not 32!

      They probably didn't want to have 16GB or 32GB versions, but made a 16GB version for smaller markets where they aren't going to sell so many 64GB and 128GB versions -- (read: the developing world)

        The justification that its for the developing markets is a bit silly as the cost of the device is still incredibly expensive. $600 for a phone is a lot of money for areas where the average wage may be $300 a month. Keep in mind that it is before living expenses, so their disposable income is very low.

        If you look at developing markets like Africa, mobile phone penetration is very high, however the bulk of users are owners of 'feature' phones, similar to what was around before iOS and Android were around.

        Companies like Samsung and Sony are starting gain ground in these markets by developing smartphones that are scaled back, so they are cheaper.

        As people get smartphones and 'lock-in' to an ecosystem (I don't want an Android, all my purchased apps are iOS), its very hard to move away, in this case I think that Apple not looking at cheaper alternatives for the developing work may bite them in the long term.

        I know a lot of people who want an iPhone but struggle to afford it, so literally get the cheapest they can, which is also the smallest. Especially when you're around students. a 32gb would of been more expensive, and anyone wanting a more premium device is able to make that jump to 64.

        The smallest iPhone is always the most sold on contract.

        Lol if the country really is a part of the developing world, they'd be buying cheap Android and WP phones, not iPhones!

          Which doesn't mean Apple don't want to sell them there...does it?

            Of course not, but in reality, look at growing markets like China and India where the masses are buying WP phones and Android phones. Why? Because of affordability. Sure you'll have the pockets of people who can and want to afford expensive things as a status symbol (as many who have bought iPhones in India), but the success rate will be miniscule.

      Not me. 32GB isn't enough, and I think the 128GB offering is fantastic. I was eyeing off a 2014 Moto X until it was released with just 32GB and no SD card support. I'm happy with 16GB+SD card support, or >64GB of internal storage. Anything below though I won't even consider.

      I agree though in that the low end iPhone 6 should have been 32GB, not 16GB. I suspect this has been done deliberately to coerce people into buying the more expensive 64GB iPhone 6.

      I imagine it's cheaper to produce at one end, while at the same time encouraging sales of the 64GB model since the step up to the next model has a higher jump than the 16GB you'd gain from going 16GB to 32GB.

      iCloud can help get around a lot of the storage issues for many users too since you don't necessarily have to have your MP3 collection on your handset in order to have access to it. Along with cloud based photo storage, that can help reduce two of the big storage consumers, especially for users that don't use a lot of apps.

      16GB also is suitable as a business phone where you don't expect staff to be installing games and the like.

    The term Australia Tax makes me cringe every time i hear it as been hearing it alot, kinda like the term yolo. The difference actually isn't that bad, if you are spending over $1000 on your new iPhone, $111.15 is small change.

      I very much agree. On both the use of yolo and the fact that it is not a large difference. Much more reasonable than some other products out there.

        I am also fairly sure the US price does NOT include state sales tax (kind of their GST).
        If you compare apples to apples (sorry accidental pun) and remove the GST it is pretty much the same. In fact....the top model MAY be CHEAPER here!

        Not to mention....AGAIN.....that the AUD is looking like it will head downwards sooner rather than later so these are actually EXCELLENT prices!

        If we want competitive pricing we can't be all 'boy who cried wolf' on the "Australia Tax".

          Very true - in NY for example, you would have to add 8.5% (from memory - recent trip there), and add in, say, $50 for shipping to Australia, it makes the conversion more like $820 AUD for the base model iPhone 6. So we're maybe $80 worse off, give or take.

          Yes, but if you were going to buy one from the US, you'd be silly to not buy it from a state which has 0% sales tax.

      I wish I was in the financial position to regard $111 as "Small Change".

      I don't understand the complaining about using the term here, yes Apple's isn't that bad, but that's a good thing. Compare that to a lot of other products and Australia gets ripped off. It's a relevant term today, and should stay relevant until Australian pricing is fixed.

    Have these prices taken US taxes into account, their sales tax is not included in the advertised price so this price difference could be put down to a 10% tax (GST) being included in OZ but not in the US one?

    By the looks of the pricing its just the 10% tax that we have with GST.
    US prices never have tax included, ours do.

    You forgot to include Tax in the US prices... Including GST the phones are, in some cases, cheaper here

    If buzz words like Australia Tax didn't exist then Gizmodo wouldn't be able to fill there feed with pointless articles.

    1000 bucks for a phone? Tell them "they're joking".

    GST ?... US Quotes pre-tax (because tax is different per state), and Aus is inclusive.

    Do these numbers take into account local sales taxes in the US? Or is the iPhone exempt from those?

      It would appear they have added about 10% sales tax to the base US price before converting to AUD.

      Yes, my question exactly. Let's say you bought the phone outright from say an Apple store in California, then surely you'd have to add 7.5% sales tax onto those US$ figures? % varies from state to state of course, but the best comparison would be prices excluding US sales tax and in Australia excluding GST.

    Hang on, have we forgotten the GST?

    All the Australian prices are close to 10% higher than the US prices (converted to AUD). Isn't that just the GST? Keep in mind that when you buy one of these phones in the US you may have to pay an additional state tax on top of the amounts quoted in the article. It seems to me that the "Australia Tax" on the iPhone 6 is almost zero!

      Nope, other way around. Both have 10% salex tax added on. So the difference is even greater if you pay 0% US sales tax, which anyone with half a clue would.

    Personally I'm not too fussed by a difference of about 10%. There's far worse offenders out there. I'd like it to be a smaller gap, but I'm sure factors such as the AUD fluctuations have to be factored in to this unless Apple wants to be updating its AUD price every other day, something they've never seemed keen on doing.

    Either way it's going to be an expensive phone.

    *screams* pleaseeee Mr Apple... release a new ipod touch

    That's not what it costs! You need to base it off minimum hour wages. It would take an american 27.45hrs ($7.25/hr) to earn the base Iphone 6. An Australian requires 51.5hrs ($16.87/hr) to earn the same. If the same amount of hours were used. The Iphone should cost $463 USD - roughly $505 AUS at the current conversion rate with an added $50 GST brings the price of the Iphone 6 in AUS to $555, So we're getting ripped off by $314.00. THANKS APPLE!

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