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Wednesday, 23 March 2011
Page: 3011

Mr HUSIC (7:42 PM) —Back in January, we witnessed the launch of a campaign by major retailers to start adding the GST to the purchase of products sourced overseas via the net. It was a short-lived campaign for a host of reasons, not the least of which was that consumer backlash swamped the campaign before it got off the ground. Many consumers know that the moment they get online they can see for themselves the major price differentials that exist between products obtained here and the same ones that can be purchased overseas.

It is certainly something that has not escaped constituents whom I represent in this place. Last month I received an email from Mount Druitt resident Anastassia Watson, who wrote on behalf of Andrew Luke and herself. Ms Watson and Mr Luke wrote to me because they had ‘concerns with the cost of products in Australia which in our opinion are overpriced compared to the United States’. They then listed a range of products such as food, clothing and electronic gear that could be purchased here, then compared them to the cost levied in the US. For example, Ms Watson highlighted—and I quote:

A good pair of TN Nike Shoes in Australia is $239 and in the United States it’s $100.

An NBA jersey in Australia is $139.95 and in the United States the jersey is $50.

An Xbox game is priced at an average of $110 on its release date in the United States its $60. On this point, it has been pointed out that Sony’s PS3 gaming platform has almost a $200 price differential between here and the US.

Ms Watson wrote:

Seriously, if I was an American coming to Australia and realised that Australian prices are more than double, I would put myself on the first flight back to the US!

She also asked me to pass on her concerns to the Treasurer, and I will be doing just that.

The issue of price differentials frustrates many consumers, particularly when they seek to purchase electronic items. I think it is well known I do not mind Apple products. Their sleek, smartly designed products are leading edge, innovative, and help shape the way technology caters to consumers. Besides their terrific MacBook, I have also been impressed with the iPad, which I am using tonight. It was a great platform from which I read my inaugural speech. I am led to believe I was the first member in this place to do so.

It is not unusual for users of Apple products to become fervent devotees of the brand, but in the rush to embrace the products the users sometimes find themselves checking out the cost of the products here versus what they would pay for them in the US. It is also front of mind for people weighing up whether they will purchase the iPad2, which will be released in Australia on Friday. I raised the issue of price differences on the social media platform Twitter the other day and got quite a strong response from the general public, and I want to thank them for taking the time to share their views with me. I had some of the price differences brought to my attention. In very broad terms, for example, and taking into account taxes and currency variations, it turned out that the 13-inch MacBook Pro costs $1,399 here and $1,218 in the US, the 17-inch MacBook Pro costs $2,899 here and $2,700 in the US, and the 8 gigabyte iPod Touch costs $289 here and $247 in the US. Going through the Australian Apple website, to buy certain brands of headphones might set you back up to $200 more than buying the same product on Apple’s US website. To Apple’s credit the 16-gigabyte iPad2 with wi-fi will cost $579 here but $543 in the US—a lot tighter in price. These amounts are in Australian dollars. For details on the calculations, people will be able to visit my website in the next day to see the breakdown for themselves. For many people these differences are not small. As someone remarked to me via Twitter: ‘iPads take into account 10 per cent GST. Mark-ups over that are hard to justify.’

It is important to bear in mind that Apple products are generally priced at a higher range to begin with. On top of that, do not forget that Apple is overwhelmingly the manufacturer, wholesaler and retailer, and, from what I understand, they give resellers little, if any, control over pricing. One more noteworthy point is that their products are largely manufactured in China and shipped out from there to both Australia and the US. Consumers are struggling to work out why they are charged way more for these products and they would like some answers. Given the enormous brand loyalty Apple no doubt enjoys, I think there is a valuable opportunity for the company to explain why the same products in the United States cost significantly more here. To help get some answers quickly, overnight I will be writing to Apple Australia’s managing director to put some of these differences to him.

The worn-out observation about the internet is that it has made the world a much smaller place. Clearly, it has brought before people’s eyes the fact that others are getting a better retail deal. Besides shrinking distance, let’s hope it has a similar effect on price differences too.