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Forum: Our World Australia RSS
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Member since May 2011 · 2485 posts · Location: Brisbane
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Subject: Why Australia's so expensive.
My dad linked me to a discussion on a photography forum about the high costs of camera gear in Australia.  This post in particular really spelled it all out:

I work for a global Japanese manufacturer here in Australia, and I can tell you it all has to do with ‘scales of economy’ and the high cost of doing business in Australia compared to say the USA.

Take for example Australian wages and conditions… Compulsory 9% superannuation paid by employers to all full time workers, 4 weeks paid annual leave, 8 days (on average) accumulative paid sick days per year, 10 paid public holidays, high award wages (the average Australian adult wage is AUD$1162 per week), high cost of compulsory workers compensation for each employee.

Then you have the high interest rates (compared to the USA), higher costs for communications, cell phones, internet access, high fuel and transportation costs to move stock around this big country, etc, etc.
Take annual holiday leave alone as an example compared to these countries;

China: no leave legally required
USA: no leave legally required
Hong Kong: seven days
Singapore: seven days
Taiwan: seven days

All these costs of doing business have to be factored in when a product comes into Australia, through the distributors, middlemen, retailers and finally to the end user.

Australia is a big country with a very small relative population, 80% the land mass of the USA but with only 7% of the number of people…. This makes distribution costs high in comparison.

To give you an idea of ‘scales of economy’ in terms of photographic gear, a store like B.& H. Photo in New York, would sell more in one day than what the total number of specialist photographic stores in Australia would do in one month !

And we are talking just one store in the US…. Now add the total sales of all the camera stores combined in the USA, and you realize just how small the Australian market really is for high end photo gear (dSLRs and lenses, etc).

When an Australian distributor (even if owned by the Japanese manufacturer) places an order from Japan for stock, the quantities are minute compared to shipments to other countries. Pricing for stock varies considerably with quantity ordered at one time, not to mention the amortized shipping and transportation costs per item overall.

A followup post by a man in Norway claims the prices are 15% higher in Australia, despite Norway having a smaller population and 25% higher employee costs for businesses.   

There's no way that the size of Australia or the distance of it from the rest of the world should affect the price of anything by more than one or two percent.  The economies of scale don't affect people here to the effect some would have us believe: Nikon makes the same camera for the whole world, and let's face it, English manuals aren't exactly unique to Australia.

Fact is the reason things cost so much here is 'cause people put up with it, or don't realize how badly they're getting screwed.

Finally, one guy said this:

The government will never outlaw 'grey marketing' or parallel importing of products because this is good for the consumer as it adds to the competition and ultimately benefits the end user who are the voters :-)
Right, which is why they enforce game ratings, effectively outlawing any retail sale of unrated (ie: greymarket) games.
This post was edited on 2008-03-06, 12:03 by NFG.
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