Apple is sitting with federal politicians in Canberra today, having been granted a closed-door hearing in the parliamentary enquiry into why technology costs more in Australia – the so-called ‘Australia Tax’.
The Australian Financial Review reports that a US representative for the computer giant is arguing its case, “but no media will be allowed and no Hansard notes will be recorded”.
Microsoft, on the other hand, provided a three-page public submission that questioned the inquiry’s comparison of technology prices here and abroad, saying: “Any such comparisons are of limited use, as prices differ from country to country and across channels due to a range of factors.”
These additional factors, the AFR reported the US firm as saying, included transport and distribution costs and “the relatively high cost of labour and rent (and) the higher costs of marketing, training and advertising”, plus the fact that research and development in Australia is expensive.
“The fightback by industry,” the AFR says, “comes after months of intense pressure from consumer groups and politicians. While some companies previously blamed the price differences on a weak Australian dollar, it has been all but equal to the US dollar since late 2010.”
Also quoted in the report was Australian Home Entertainment Distributors Association chief executive Simon Bush, representing Walt Disney, Twentieth Century Fox, Universal, Sony Pictures and several other studios, who blamed Australia high cost of labour, its large physical size and small population.
“The minimum hourly adult wage in the UK is $9.68, in the US is $7.37 and in Australia is $16.51,” he said. “We hire a lot of localised distribution, sales and marketing teams and my members are huge employers in Australia.
“Each would have hundreds of people and they then hire marketing teams and PR teams that flow through the local economy.”
He also took a swipe at the inquiry, saying technology was an easy target and that the probe was “a bit of populism”.
However, the AFR said Matt Levy, the head of campaigns for consumer advocate group Choice, “dismissed the arguments and said the profit margins earned by the firms showed locals were being gouged.”
Read the full report here.