The great Australian rip-off

My friend insists on budgets: how much we need to live on each month; how much a holiday is going to cost; paying off our crazy car deal; affording home improvements back in the UK. As we prepared to come and live in Australia, in late 2009, he researched comparative costs of living in the UK and Australia, and concluded that living here would be about ten per cent cheaper. I don't know which websites he used, but they were as much use as a chocolate teapot.

On our very first day in Brisbane, we wandered around the centre of town, drifting into a bottle shop and a bookshop in Albert Street. In the first, we found a favourite wine for roughly twice what we used to pay at home: in the second, our faces fell further as we picked up interesting books and then looked at the price labels superimposed on the RRPs of foreign titles. 'We are going to have to revise our budget,' pronounced my friend gravely. I was time-zoned out and sandfly*-ravaged from the Botanic Gardens, and suddenly felt a little teary.

Two years later, I would like to share two lists with you. The first is of goods and services we have found to be cheaper in Australia than in the UK:

Prawns; Audi car servicing; tax advice/accounting; extra virgin olive oil; lightbulbs; fuel

Here's the 'more expensive' list:

Tickets for concerts and sporting events; cinema tickets; wine; many foods (notably cheese, fish, certain vegetables, processed foods); eating out; books; internet provision; mobile phone tariffs; computers; clothes; shoes, especially trainers; hairdressing and hair products; cosmetics; car hire insurance; house contents insurance; bank charges; credit card interest; 'middlemen' charges; rents; removal costs; gas and electricity; new cars; parking in cities; window cleaning; hotel accommodation; tattoos; penalty fines; cut flowers; flights to Europe; healthcare, especially dentistry; entrance fees to tourist attractions...

Some of the above need qualification. Certain food items may be more expensive, but we have never eaten better in our lives. On the other hand, some hoteliers rub salt in the wound by demanding full payment upfront 30 days before you're going to step over the threshold. You win some, you lose some: you pays your money and you takes your choice.

Australia is a very wealthy country, mainly because of vast mineral deposits that are exported to hungry customers in Asia. It therefore survived the Global Financial Crisis relatively unscathed by comparison with most other developed economies. But Australians don't feel well off. They complain about the cost of mortgages or rents and petrol and utilities and food and many other essentials, yet they earn good money, compared with Europe.

Today some light is thrown on this in the form of a report – Price Drivers: Five Case Studies in How Government is Making Australia Unaffordable – by the Centre for Independent Studies (CIS), who describe themselves thus:

'...the leading independent public policy 'think-tank' within Australasia. The CIS is actively engaged in supporting a market economy and a free society under limited government where individuals can prosper and fully develop their talents. Through positive recommendations on public policy and by encouraging debate amongst leading academics, politicians, journalists and the general public, the CIS aims to make sure good ideas are heard and seriously considered.'

Read this report at www.cis.org.au/images/stories/policy-monographs/pm-125.pdf. It is particularly interesting with regard to bananas and cars.

During tropical cyclone Yasi earlier this year, vast numbers of banana plants were flattened in Northern Queensland. Prices shot up to $14 a kilo (from $2-3 beforehand); and so it was that those growers whose plants were still standing profited enormously. Many people boycotted bananas, which are usually in great demand. Australia is by no means a major world producer, but bananas are big in Queensland – in every sense. Residents of this state are not nicknamed banana benders for nothing**. And growers' interests are represented forcefully by none other than the Federal Member for Kennedy, Bob Katter (see Limbo dancers, August 2010; And then there were two, September 2010).

In such a time of dire shortage, the Australian government could have bought bananas from the Philippines, a relatively close neighbour, so that their citizens would not be deprived of their favourite fruit. But that was not possible. Bananas, you see, cannot be imported under the terms of the Quarantine Act 1908, being of 'biological material', unless there is no risk in doing so. One of the authors of the Price Drivers report, Dr Oliver Hartwich, believes that, at the very least, the other, non-banana-growing states of the Commonwealth could import bananas without any risk. Instead of paying the price of such a protectionist policy, Queenslanders should be able to choose whether to support the growers or reduce their food bills by buying imported, much cheaper bananas like the rest of the world does.

On the other hand, bananas coming from Northern Queensland don't earn air miles. And today, I notice, they are back to their pre-Yasi price, if not lower. And do farmers not need supporting in this era of great mining hoo-hahs?

Australia protected its apple growers in the same way until this year, when it had to bow to a World Trade Organisation ruling that import restrictions in place since the 1920s represented a trade barrier to New Zealand apples rather than a genuinely protective measure against fire blight.

But never was Australian protectionism so forceful as in defence of its car manufacturers. There is a five per cent import tax on all foreign cars; the luxury car tax (LCT) adds 33 per cent above the LCT threshold (currently $57,500); so-called Australian Design Rules deter foreign car manufacturers from converting their cars to meet standards here; and private importation is virtually impossible as a result of good ol' Aussies rules (the vehicle must have been 'owned and used' for a year before importation, to mention but one hurdle).

What this amounts to is that Australians pay 20-30 per cent more for a fairly average family car than if they were buying the same car in Europe or America. Curiously, Australian-made cars sell in the US for two-thirds of what they cost here.

I care more for books than bananas, or cars. These three books cost me just over $100 in total, which at today's exchange rate is just over £64. Had these books been published in the UK, they would probably have cost about £40 (even less on Amazon), but they are only available here. I had to bite the bullet.

The Copyright Act 1968 states that, should an Australian publisher acquire copyright of a book within 30 days of its release overseas, book retailers may not import foreign-published editions of the book. Readers here have to pay whatever the Australian publisher dictates and cannot buy what would almost certainly be cheaper imported versions. This had the original intention of encouraging Australian readers to buy works by Australian writers, but a person's reasons for choosing a book don't often include substitutability options.

We make a list of books we want and then order all other than uniquely Australian titles through Amazon.co.uk, who, having cottoned on to an Australian demand, are offering free international delivery (on orders of £25 and above) until the end of next year. And some Aussies, who are nothing if not resourceful, use the fact that they don't pay import duty on items costing less than $1,000, to bring in supplies from abroad. One of my friend's colleagues imported bicycle components from all over the world (but mostly from the USA) and assembled a bike for $1,800 that would otherwise have cost him $5,000 to buy whole in Oz.

Within a couple of months of our dispiriting bottle-shop experience in Albert Street, we were pointed in the direction of Dan Murphy's, a big-box liquor store that keeps its prices down by buying in bulk and sourcing many of its wines directly from overseas. Owned by Woolworths, Dan Murphy's sells very cheap wines and reasonably-priced fine wines, thus saving us from both penury and despondency.

Australians and non-Australians seem to agree that it is very expensive to live here. Those of us who are temporary residents may have a lifestyle the envy of friends back home, but we do worry those friends won't be able to afford to come see Australia.

* Under the heading Biting midges in Brisbane on their website, Brisbane City Council say, 'midges are often called sandflies but not every sandfly is a midge. Sandfly is a common name for a number of types of small biting insects'

** Urban Dictionary's definition of banana bender: alternate name for a resident of Queensland, Australia, where bananas grow and people with nothing better to do put a bend in them


This post was last updated on 2 March 2012