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Wednesday, 17 August 2011
Page: 8425

Mr HUSIC (ChifleyGovernment Whip) (19:35): In March I spoke about the price differentials that exist in relation to products sold in Australia compared to overseas. I did not imagine at the time it would trigger the response it did. I received a wide range of emails and calls complaining about the way Australian consumers and businesses have been, frankly, ripped off. Back then I put the spotlight on a particular company: Apple. I will not go into detail about the differences now, because I did at the time. It was clear that the products they were manufacturing and retailing had a significant difference in price. Even the products of other manufacturers sold by Apple via its website had some massive differences.

So I wrote to them in March. Amazingly, at the time I was quietly warned by IT journalists and consumers not to expect a response. Chase them up I did; my office followed them up a number of times. They promised that by 16 July Apple Australia's Managing Director, Tony King, would personally respond to the concerns raised in March once he returned from leave. In the meantime, Apple began to reduce the prices of the apps it sells via iTunes. I congratulated them for it at the time but indicated I wanted to see where they would head with hardware costs. Yet only a week later it became clear that Apple was not going to move on this issue. Tech website Delimiter reported that Apple was set to hit consumers again. Its new MacBook Air was estimated to cost up to $300 more than US consumers would have to pay and the new Apple Thunderbolt display would cost up to $270 more. July 16 came and went. Apple refused to respond and I am staggered by their behaviour: they've snubbed consumer, media and parliamentary interest in this matter.

But they are not the only ones with a case to answer for in relation to glaring price differentials. Some other culprits are PC manufacturer Lenovo, which released their ThinkPad X1 laptop in May and which costs $1,959 here, despite the same model selling in the US for as little as $1,399; Microsoft's flagship cloud productivity suite Office 365 costs 76 per cent more here than in the US; and Adobe's Creative Suite—and this is incredible—which costs US$699 but nearly A$1,200. Gamers pay up to 60 per cent more here for products compared to those in the UK or US. Consumers have noticed this, the media has noticed this and now it appears even the Productivity Commission has noticed this. Here is what it said in its recently released report into Australia's retail sector:

The Commission is aware of the longstanding practice by which some international suppliers set differential regional prices. This effectively treats consumers in one region as willing, or able, to tolerate significantly higher prices than those in other countries.

It goes on to say:

Some international suppliers have attempted to defend such price discrimination as due to the cost of supplying a remote and relatively small market like Australia, which in some cases has its own unique requirements. These arguments in most cases are not persuasive, especially in the case of downloaded music, software and videos, for example, where the costs of delivery to the customer are practically zero and uniform around the world.

The commission summed it up neatly: the arguments are, in its words, simply not persuasive.

It is well known that as a nation we are early adopters of technology, but being early adopters has definitely come with a price. If you are a small business needing the latest software to help keep pace with changes in your business or industry, or to be more productive, you should not be hammered by these price differences. Younger people, with less spending power but with a demand for these products, should not be hit with these variations either. Families that also want access to technology, whose impact has been far reaching in our homes and lives, should not be fleeced for the sake of Silicon Valley's bottom line. These companies would simply not do this to consumers in their home countries. Why do it in ours?

I have raised this matter within government and certainly believe that the Productivity Commission's views are compelling. If IT companies are not prepared to be transparent about their pricing decisions, then perhaps it is time for our pricing watchdog, the ACCC, to take up the case for long-suffering consumers and carry out a formal inquiry into why these prices differ so wildly.