anyone thinking of migrating to OZ better think twice!
Australia's pricey prices
February 22, 2012, 6:18 pm Damien Hansen Today Tonight
Australia's long been known as the lucky country, but we're also becoming the costly country, as our prices keep going up due to the strong economy.
Consumer
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Oliver Marc HartwichRebecca GillAustralia
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It's the great Australian rip off - a national epidemic of unaffordability fuelled by antiquated and overzealous Government policy.
So why are we paying two, three and even fourteen times more for everyday items than the rest of the world?
From cars to books, movies tickets, CDs, fruit and vegetables, to houses and parking - Australians are paying way over the mark.
More stories from Today Tonight
Migrants leaving Australia
Paying more for petrol
Power price hikes
Oliver Marc Hartwich and Rebecca Gill are the authors of a Centre for Independent Studies report which points the finger for our expensive way of life squarely at unnecessary Government policy.
“We've compared price differences and sometimes they were just staggering,” Gill said.
“We hear about the mining boom and we hear about how Australia's come out of the GFC. Europe's the one that's still in there, and aren't we lucky? But really, I think the ordinary man on the street would say 'I'm not seeing that'.”
Things you’re paying too much for
A trip to the cinema in Australia costs on average $12.98. We've got 90 screens for every million people. Canada has 86 per million, and they pay half the price.
But businesses pay more for retail space here, and they pass that cost onto you.
“In the US it was $7.50, in France $8, in New Zealand $8.50. Why are we paying more,” asked Gill.
Today Tonight's latest consumer stories
It's a question we can also ask when we go shopping.
If you compare a shop for ten basic items at a supermarket in the United Kingdom to purchasing the same items here, the difference is surprising.
Supermarket prices (converted to Australian dollars)
Food item UK price Australian price
Corn flakes $3.06 $5.25
Flora $2.50 $4.60
Eggs $1.01 $2.39
White bread $1.01 $1.00
Dolmio sauce $1.47 $2.19
Baked beans $1.00 $1.75
Mince $2.19 $4.12
Bananas $1.00 $2.98
Cling wrap $0.78 $1.39
Potatoes $1.60 $1.98
TOTAL $15.62 $27.65
“We are being ripped off unnecessarily. These are simple goods that every family should be able to afford, and they can't now,” Gill said.
Today Tonight's latest financial stories
The price of Australia's most popular grocery item – bananas – was affected last year when Cyclone Yasi obliterated much of the country's crop, and prices started going bananas.
They went up to just under $14 a kilo. At the same time New Zealand, the UK, France and the United States were all paying less than $2.50.
“A report was done in 2006 that recommended we open the market, but nothing's been done, and I think this is because the Australian banana growers are really fiercely against it,” Gill said.
More stories from reporter Damien Hansen
According to Hartwich, “the Government has actually made it very expensive for us to live here.”
Four years on, and the Government’s own recommendation allowing the conditional import of green bananas from the Philippines is yet to be implemented.
“I think if Australians only knew how much they were being ripped off on a daily basis, they would be even angrier,” Hartwich said.
Yahoo!7 Lifestyle: What would you pay for a coffee?
But do we have a right to be, or are we a nation of wingers suffering from economic hypochondria?
Lynne Wilkinson from lobby group AUSBUY believes the bitter pill of higher prices is one we must swallow.
“It is a catch 22 to say you want to buy cheap, but you still want high wages,” Wilkinson said.
Reduce the cost of your monthly bills with Moneyhound
“We've got a lower population, we've got more expensive transport costs, and we've got higher base wages, and our retailers have to pay higher rents,” she said.
Our expensive reputation stands to threaten our tourism market too.
Visiting backpackers offer the perfect barometer, saying “the food is expensive as well as alcohol, cigarettes, and transport. A lot of things are very expensive in Australia.”
We've got even more to whine about when it comes to beer. In the UK they pay half what we do.
And who would have thought Pitt St Mall is more exclusive than the Champs-Élysées?
“Well I would argue that Paris is still probably a little bit more glamorous than Pitt St Mall, and yet it is cheaper to rent a store there. Something it not quite right here,” Hartwich said.
There's nothing right about our overpriced parking either. Three hour parking comparisons sees Sydney top the list of nineteen cities worldwide.
At just under $35 an hour, it is cheaper to park in London and even New York. And while you're there, you're better off looking for a car as well.
“We found the same car advertised in Australia for $360,000. We found exactly the same car, same mileage, same engine, I think it was even the same colour it Britain, for $110,000 - an enormous price differences,” said Hartwich.
Again, we can thank the Government in part for our chronic hip pocket pain. Hartwich believes family and small cars would also be cheaper if the luxury car tax and current import duties were abolished.
“Why aren't we paying it on motor yachts, or caviar, or other luxury items? We're only paying a luxury tax on cars, and actually a lot of the cars in this category may even be just normal, larger family cars,” he said.
The Government regulations covering bookstores is also costing us.
“We don't import books, so every book has to be published and printed in Australia," Gill said.
The copyright act of 1968 prevents Australian book retailers from importing cheaper versions of books published overseas - but anyone can do it online.
“There really needs to be a change, as otherwise we will see more and more bookstores just disappear from our streets.”
The pursuit of owning a home is also similarly plagued.
“In real terms it costs about the same to build a house nowadays that it cost twenty or 30 years ago, so all the house price inflation really comes from the land component. In a country the size of Australia, land should never be that expensive," Hartwich said.
The Centre For Independent studies report calls to controversially abolish the First Home Buyers Grants, stamp duty, and negative gearing, which they say have all inflated prices.
However property analyst and buyers’ advocate Scott McGeaver argues that negative gearing should be here to stay. He does agree though that the First Home Buyers Grant could be adjusted.
“I think we've learnt in the last decade that we just can't have a boom like we've had again,” McGeaver said.
“Any Government that abolished it would be very brave,” he said. “Although it hasn't been the major part of the market, it has certainly been a big part of the market, and it has certainly been a driver for that sub $500,000 market.”
It seems the lucky country has become the expensive one, leaving millions of Australians counting the cost.
“The rest of the world keeps taking us for mugs, they really are because we keep on saying we're in a great shape, and at the end of the day we're not,” Wilkinson said.
And Hartwich agrees. “Once upon a time you thought of Australia as the workers’ paradise, where everybody could get a decent deal, and where there was always a fair go for everyone. I think these times have gone, and we have to work hard to restore them.”
Australia's pricey prices
February 22, 2012, 6:18 pm Damien Hansen Today Tonight
Australia's long been known as the lucky country, but we're also becoming the costly country, as our prices keep going up due to the strong economy.
Consumer
Read more about
Oliver Marc HartwichRebecca GillAustralia
Send
EmailIM
Share
DeliciousTwitterMyspaceDiggStumble UponFacebook
It's the great Australian rip off - a national epidemic of unaffordability fuelled by antiquated and overzealous Government policy.
So why are we paying two, three and even fourteen times more for everyday items than the rest of the world?
From cars to books, movies tickets, CDs, fruit and vegetables, to houses and parking - Australians are paying way over the mark.
More stories from Today Tonight
Migrants leaving Australia
Paying more for petrol
Power price hikes
Oliver Marc Hartwich and Rebecca Gill are the authors of a Centre for Independent Studies report which points the finger for our expensive way of life squarely at unnecessary Government policy.
“We've compared price differences and sometimes they were just staggering,” Gill said.
“We hear about the mining boom and we hear about how Australia's come out of the GFC. Europe's the one that's still in there, and aren't we lucky? But really, I think the ordinary man on the street would say 'I'm not seeing that'.”
Things you’re paying too much for
A trip to the cinema in Australia costs on average $12.98. We've got 90 screens for every million people. Canada has 86 per million, and they pay half the price.
But businesses pay more for retail space here, and they pass that cost onto you.
“In the US it was $7.50, in France $8, in New Zealand $8.50. Why are we paying more,” asked Gill.
Today Tonight's latest consumer stories
It's a question we can also ask when we go shopping.
If you compare a shop for ten basic items at a supermarket in the United Kingdom to purchasing the same items here, the difference is surprising.
Supermarket prices (converted to Australian dollars)
Food item UK price Australian price
Corn flakes $3.06 $5.25
Flora $2.50 $4.60
Eggs $1.01 $2.39
White bread $1.01 $1.00
Dolmio sauce $1.47 $2.19
Baked beans $1.00 $1.75
Mince $2.19 $4.12
Bananas $1.00 $2.98
Cling wrap $0.78 $1.39
Potatoes $1.60 $1.98
TOTAL $15.62 $27.65
“We are being ripped off unnecessarily. These are simple goods that every family should be able to afford, and they can't now,” Gill said.
Today Tonight's latest financial stories
The price of Australia's most popular grocery item – bananas – was affected last year when Cyclone Yasi obliterated much of the country's crop, and prices started going bananas.
They went up to just under $14 a kilo. At the same time New Zealand, the UK, France and the United States were all paying less than $2.50.
“A report was done in 2006 that recommended we open the market, but nothing's been done, and I think this is because the Australian banana growers are really fiercely against it,” Gill said.
More stories from reporter Damien Hansen
According to Hartwich, “the Government has actually made it very expensive for us to live here.”
Four years on, and the Government’s own recommendation allowing the conditional import of green bananas from the Philippines is yet to be implemented.
“I think if Australians only knew how much they were being ripped off on a daily basis, they would be even angrier,” Hartwich said.
Yahoo!7 Lifestyle: What would you pay for a coffee?
But do we have a right to be, or are we a nation of wingers suffering from economic hypochondria?
Lynne Wilkinson from lobby group AUSBUY believes the bitter pill of higher prices is one we must swallow.
“It is a catch 22 to say you want to buy cheap, but you still want high wages,” Wilkinson said.
Reduce the cost of your monthly bills with Moneyhound
“We've got a lower population, we've got more expensive transport costs, and we've got higher base wages, and our retailers have to pay higher rents,” she said.
Our expensive reputation stands to threaten our tourism market too.
Visiting backpackers offer the perfect barometer, saying “the food is expensive as well as alcohol, cigarettes, and transport. A lot of things are very expensive in Australia.”
We've got even more to whine about when it comes to beer. In the UK they pay half what we do.
And who would have thought Pitt St Mall is more exclusive than the Champs-Élysées?
“Well I would argue that Paris is still probably a little bit more glamorous than Pitt St Mall, and yet it is cheaper to rent a store there. Something it not quite right here,” Hartwich said.
There's nothing right about our overpriced parking either. Three hour parking comparisons sees Sydney top the list of nineteen cities worldwide.
At just under $35 an hour, it is cheaper to park in London and even New York. And while you're there, you're better off looking for a car as well.
“We found the same car advertised in Australia for $360,000. We found exactly the same car, same mileage, same engine, I think it was even the same colour it Britain, for $110,000 - an enormous price differences,” said Hartwich.
Again, we can thank the Government in part for our chronic hip pocket pain. Hartwich believes family and small cars would also be cheaper if the luxury car tax and current import duties were abolished.
“Why aren't we paying it on motor yachts, or caviar, or other luxury items? We're only paying a luxury tax on cars, and actually a lot of the cars in this category may even be just normal, larger family cars,” he said.
The Government regulations covering bookstores is also costing us.
“We don't import books, so every book has to be published and printed in Australia," Gill said.
The copyright act of 1968 prevents Australian book retailers from importing cheaper versions of books published overseas - but anyone can do it online.
“There really needs to be a change, as otherwise we will see more and more bookstores just disappear from our streets.”
The pursuit of owning a home is also similarly plagued.
“In real terms it costs about the same to build a house nowadays that it cost twenty or 30 years ago, so all the house price inflation really comes from the land component. In a country the size of Australia, land should never be that expensive," Hartwich said.
The Centre For Independent studies report calls to controversially abolish the First Home Buyers Grants, stamp duty, and negative gearing, which they say have all inflated prices.
However property analyst and buyers’ advocate Scott McGeaver argues that negative gearing should be here to stay. He does agree though that the First Home Buyers Grant could be adjusted.
“I think we've learnt in the last decade that we just can't have a boom like we've had again,” McGeaver said.
“Any Government that abolished it would be very brave,” he said. “Although it hasn't been the major part of the market, it has certainly been a big part of the market, and it has certainly been a driver for that sub $500,000 market.”
It seems the lucky country has become the expensive one, leaving millions of Australians counting the cost.
“The rest of the world keeps taking us for mugs, they really are because we keep on saying we're in a great shape, and at the end of the day we're not,” Wilkinson said.
And Hartwich agrees. “Once upon a time you thought of Australia as the workers’ paradise, where everybody could get a decent deal, and where there was always a fair go for everyone. I think these times have gone, and we have to work hard to restore them.”