What is wrong with Australia?

Submitted: Sunday, Jan 04, 2015 at 08:14
ThreadID: 110608 Views:3979 Replies:20 FollowUps:83
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There is something fundamentally wrong with Australia and pricing of retail goods.

I travel fairly regularly and recently returned from a trip to Japan.

Everyone tells you .....dont' go to Japan it is sooo expensive.

Well if it is expensive then Australia is out of control

Here are some examples.

-I bought a jacket in Japan, $89. SAME Jacket in Australia - $320
-We dined out every night goog restaraunts great quality food. 5 people, 3 drinking alcohol. $100 - 120 for everyone, even Tokyo was about $140 try that in Australia
-Ski lift tickets $160 for a week, kids free. Compared to $140 a day and $120 a day for kids here.
-Wife bought a brand name coat - $180, got back here, same thing $480
-I bought an Fiskars Axe from the US. $38 plus $20 delivery. Same axe at bunnings $128
My wife's sister lives in the US. She regularly ships Polo etc pullovers and shirts to us. $10 - $25. Here $80 - $180.

I bought ski boots online in the US$125 ( about $150 AUD). *Exactly* same make and model here on sale at $499.

We regularly buy from HK US and now Japan. they are 1/3 to 1/2 the price here.

Same with Apple songs and apps etc.

Why is EVERYWHERE so much cheaper than Australia.

Gerry Harvey says it is the fact that there is no GST on imported goods over the internet. But that only accounts for 10%, not 100 to 200% difference. ( perhaps the fact that the various departments in a Harvey Norman are all franchises of the main store which is a franchise of the Harvey Norman, and the store pays rent to Harvey Normans property division which then pays rent to the store owner may have something to do with their problem. That is a lot of mouths to feed.

Does anyone know why this is. It drives me crazy. Actually you are foolish to buy many products in Australia. But greed of the retailers will eventually lead to their death and loss of employment.

No wonder all the shops in most shopping strips have been replaced with cafe's.
I just don't get why Australia and only Australia is double or triple what other countries are for so many goods.

Lets hope Australia has a coffee led recovery.
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Reply By: Been-Everywhereman - Sunday, Jan 04, 2015 at 09:02

Sunday, Jan 04, 2015 at 09:02
I would think because lazy "Aussies" want maximum hourly rate for minimum output. Go into any workshop and try and get something done to your vehicle and try being happy with it and not having to take it back for warranty. Also we all want something for nothing and shop on Ebay etc... The day we started buying washing machines and fridges from China back in the 90's was the start of all this. We are our own worst enemy and then we complain when Australia cannot match the rest of the world which take home $5 an hour or less. How many of us drive Aussie built vehicles? How many of us have Aussie built appliances? How many of us are prepared to drop our hourly rate to help prices go down? Cheers...
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Follow Up By: Been-Everywhereman - Sunday, Jan 04, 2015 at 09:03

Sunday, Jan 04, 2015 at 09:03
BTW. Born and bred here
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Follow Up By: Bigfish - Sunday, Jan 04, 2015 at 09:25

Sunday, Jan 04, 2015 at 09:25
Mate...every country in the world has a huge population that shops on e-bay. And why not? Why the hell would I pay $740 for a leather motorcycle jacket here in Oz when I bought EXACTLY the same thing delivered to my door for $200.00. Thieving dealers. Yes we do live a good lifestyle. And why not? We do have high hourly rates across most professions/trades. However if anyone wants to buck the system and work in a sweat shop for $4.00 an hour...go for it. You'll be hungry and homeless but you will be standing by your principles!!to have well paid for \. Many of us don't drive Aussie vehicles because the amount of tax that the govt puts on the local car manufacturers is disgraceful. A new Toyota v8 landed in Oz can be purchased for $38,000.00 IF your in the right industry! It has also been predicted that within another decade or so there will only be 4 car manufacturers in the world.
Free trade..an absolute joke.

Capitalism is not working around the world. The rich are getting richer and the poor are getting $#&%%##. The younger generation do not have the same work ethics that most of us had instilled into us. Also the me ,me , me syndrome is prevalent everywhere. Wouldn't it be nice also if the big companies actually paid taxes at a decent rate instead of pulling shifties and paying bugger all? The govt also are just as bad with mismanagement and fraud/dishonesty high on the agendas.

Like most people on here I am frustrated as hell with the way we as a nation are going. 2 sad, egotistical parties to chose from, dishonest state govts, incompetent councils. Where do you start.

Mate ..4 days into the new year and now I,m depressed!!

lolol

Take a chill out pill and think of something nice.

all the best.
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Follow Up By: AlbyNSW - Sunday, Jan 04, 2015 at 10:46

Sunday, Jan 04, 2015 at 10:46
Agree with you Bigfish but you can't blame the big corporates regarding avoiding paying tax we should blame the government for the lousy tax rules that allow them to legally not need to pay it.
As Kerry Packer once said, "only a fool would pay more tax than he has to" and don't we all minimise our tax payments to the best of our ability?
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Follow Up By: Gone Bush (WA) - Sunday, Jan 04, 2015 at 12:13

Sunday, Jan 04, 2015 at 12:13
Bigfish, I can't send you a PM so could you post the source of that leather jacket please?

I'm glad I ain't too scared to be lazy
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Follow Up By: Steve - Sunday, Jan 04, 2015 at 12:41

Sunday, Jan 04, 2015 at 12:41
Even the good old Oztent I found cheaper in the States than here - trouble is, they've got it all tied up so they can't distribute to Australia.

I suppose it helps when a lot of the low paying jobs over there actually are low paying and willingly taken up by Mexican and black population whereas we have costs like holiday loading and payroll tax. A lot is obviously pure profiteering though and as previously mentioned, they'll charge what they can get away with whilst there's little competition
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Follow Up By: Bigfish - Sunday, Jan 04, 2015 at 12:42

Sunday, Jan 04, 2015 at 12:42
Gone Bush ..I used a mob called DH Gate. 2 -3 years ago. I bought a Harley jacket. 18 months ago I bought a "Marlboro Man" jacket for about the same price. Harley Davidson get all their jackets made in China. Look up DH Gate and then type in motorcycle jackets. I just did it and I,ll be buggered. Most of the known brand jackets have disappeared. The quality is good and I have half a dozen mates who have all bought jackets from them. These are the real deal. Try this mob too...

GuangZhou TongHai Apparel Co.,Ltd

good hunting
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Reply By: PajeroTD - Sunday, Jan 04, 2015 at 09:36

Sunday, Jan 04, 2015 at 09:36
It's a combination of three things:

1. High cost of running a business in Australia (employee entitlements, taxes etc).

2. Not enough competition to drive prices down.

3. Australians are conditioned/willing to pay an arm and a leg for everything.



The keys to fixing the problem are:

1. Deregulate so more new businesses are incentivized to open.

2. Minimal to no corporate taxes. There will be more businesses open and more people employed so less money will need to be invested in welfare, and plenty of tax dollars will come in through personal income tax.

3. Deflation! It's a negative word, so people think it's a bad thing. What it really means is increase the value of the dollar against all commodities. Yes that means people might take a pay cut. But, with more businesses hiring, that will keep wages up. Supply and demand will be in the favor of the job seeker.
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Follow Up By: Bazooka - Sunday, Jan 04, 2015 at 14:26

Sunday, Jan 04, 2015 at 14:26
Why not throw in minimal to no personal income tax? You could just as easily justify that using the same simplistic model. Deflation has very little upside. In most cases it brings about economic stagnation and unemployment.

Competition, market size (that big bogeyman - population), and national "wealth" with all its protections and encumbrances, and bricks and mortar lease costs are the prime drivers of retail costs in this country.

It's easy to cherry pick examples of retail prices in other parts of the world. Bottom line is you have to put it into a context of the overall liveability (wages, facilities, clean environments etc) and markets.

That said I agree some retail markups on imported goods are (appear to be) ridiculous.
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Follow Up By: PajeroTD - Wednesday, Jan 07, 2015 at 02:34

Wednesday, Jan 07, 2015 at 02:34
I'm not cherry picking anything. No income tax is not an incentive for businesses to open and hire people, but it would be an incentive for people to want to work, rather than be on the dole. I like how you keep calling my model simplistic, yet you don't offer your own solution. But that's the problem, we keep looking for complex tax solutions, and that is part of the problem! By the way, our income taxes should be flat, to incentivize people to want to earn more money. Even with a flat tax, the more you earn, the more you pay. Sounds like you were sold on the left-wing idea that all these corporate taxes, regulations, more entitlements, property taxes, etc., have a positive impact on economic development. Yet you probably wonder why the automotive industry is leaving Australia. I tell ya what, go learn about business and economics, then you and I can have an educated discussion about this.
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Follow Up By: Bazooka - Wednesday, Jan 07, 2015 at 11:53

Wednesday, Jan 07, 2015 at 11:53
Your "solutions" have been thrown up more often than I've had baked dinners PTD and thankfully they've invariably been given the short shrift they deserve in this and other countries. The topic is far too complex to be debated here. Suffice to say that I like your sense of humour - suggesting I need to I learn about business and economics while proposing flat income taxes and no/minimal corporate taxes as a "solution" and implying that deflation is an economic positive is ironic to say the least. No I'm not wondering why the car industry and manufacturing has moved offshore, nor would I look for for rational discussion of the reasons on this website- those topics have been publicly analysed by people with much more in depth knowledge elsewhere.
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Follow Up By: PajeroTD - Wednesday, Jan 07, 2015 at 12:34

Wednesday, Jan 07, 2015 at 12:34
Yeah I get it, you don't have any solutions. Everything out of your mouth is blah blah blah, and a pathetic attempt at trying to make me feel like I don't know what I am talking about, when I actually do. But you keep on with your politics, while I sit with real business experience and education. Let me ask you a question. Why do you not own a business? Think about it honestly? Is it because it's too hard, too risky, not enough reward these days? The same reasons why you don't own a business apply to many other people. That's why there are fewer businesses than what there should be. This is a subject that's so clear and evident to me, that any attempt from you to try to confuse me or have doubts has ZERO impact. Please try to understand that. I suppose you wonder how I know that you don't own a business. I'll see if you can work that one out on your own.

"those topics have been publicly analysed by people with much more in depth knowledge elsewhere."

I like how you don't disclose the WHO or WHERE, it allows you to be nonspecific, because, quite frankly, you can't. Now come back when you have an MBA.
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Follow Up By: The Landy - Wednesday, Jan 07, 2015 at 14:26

Wednesday, Jan 07, 2015 at 14:26
Wandering through this thread and was avoiding comment given the issue is far too complex to discuss and debate fully here. But I do have a question (and comment!)

How will deflation help?

Deflating the economy may well depress prices as no one will want to buy anything, it will be cheaper tomorrow, right? But more importantly, people will become savers rather than consumers. If you are deflating the economy you are in fact depressing economic growth, eventually that will lead to loss of jobs, through lack of economic activity, and therefore will result in poor consumer sentiment.

And the cycle goes on, poor consumer sentiment means reduced spending by households, which will lead to a scale back in activity by business and eventually to job losses. This is exactly the problem facing the world presently. Despite low interest rates all around the world there is a lack of economic activity.

Why? The consumer won’t spend…or can’t spend!

Look at Australia, if you were a business in Australia why would you invest in the business presently given the severe downturn (yes, I’m using the word severe) in economic activity?

If you invested $1 in your business presently you may or may not get a return; alternatively if you cut costs (usually staff) you get full value to your bottom line, cut $1 in costs and that is what you get on your P&L.

The last thing you want is deflation in the current environment!

Deregulate – What are you suggesting we deregulate? I can’t help but feel this is a throw-away line, unless you can demonstrate the what and how…

On taxes, there is no doubt Australia needs a full review of our tax structure, however I’m not sure that to unilaterally suggest that reducing Corporate Taxes to minimal or nil will be the panacea you are looking for.
Apart from anything else the structure of the political debate in Australia would suggest such a move would be political suicide and will never occur for this reason alone.

Key to Australia’s growing problem is that we have a relatively high living standard and a welfare structure that is expensive to maintain. Exaggerating the problem in recent year is the globalisation of the labour market and is the reason why manufacturing is “dead in the water” in Australia. You can pay the minimum wage in Australia; or in China or another developing nation. I’m not necessarily an advocate of it, but this is the reality of what is happening, and to a large extent is consumer driven.

We all want it cheaper, right?

How good would it be to continue to be highly paid in Australia and buy your goods from a country with cheaper labour inputs (which is usually the only real variable).

Market forces are well at work, economics 1.01 is kicking in and Australia’s marker will be called one day, perhaps sooner, rather than later…

Just thinking out aloud, Baz – The Landy
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Follow Up By: PajeroTD - Wednesday, Jan 07, 2015 at 18:37

Wednesday, Jan 07, 2015 at 18:37
Deflation: Yes, like I said, it's a negative word, most people (not economists) think it is a bad thing. What causes everything to go up in price in the first place? Inflation (devaluing of the dollar). Unless your goal is only to have a higher dollar amount shown on your pay cheque, this doesn't help the consumer because everything else grows in costs at a rate outweighing the increase in dollar shown on the income. Remember the good old days when everything was cheaper and more accessible? Deflation is the way to go back to that. That means increasing the value of the dollar so that it goes further (everything becomes cheaper). The only criticism to that is well what about investments? There are things you can't increase supply on, such as antiques, rare minerals etc., there will always be investment methods. Would you complain if petrol was 20c a litre next week? Or your grocery and utilities bill halved? Would you feel that you have no incentive to spend your money? Look at another scenario. The biggest shopping day in Australia was Boxing Day, and in America it was Black Friday. Why? Well, it wasn't because customers were excited about increasing prices!

Deregulation: it is a general philosophy, and wasn't specific like you said, but the goal would be to have more competition in every industry, rather than let the incumbent corporations control the market with an oligopoly. Eg. wouldn't you like to have 10 car manufacturers building in Australia? How about 5 domestic airlines competing? 10 mobile phone companies? I don't mean to the point where there are no laws requiring safety or responsibility, but just so it isn't preventing new startups.

Taxes: we are in a global economy now, and companies from anywhere can invest anywhere. Just like you, companies want the best prices available, if they are in China, they will go to China. Want to keep them in Australia and have others invest in Australia? You gotta compete on price (all costs of operating a business). The only way out of that is to end FTAs, stop all the importing and exporting, then Australia doesn't have to compete globally. But all the products and services available to you will totally suck, because they won't need to be competitive on a global scale. It would mean R&D budgets would be low, profits would only be within the scope of a single nation.

Anyway, hope that adds clarity to my views.
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Follow Up By: The Landy - Wednesday, Jan 07, 2015 at 19:35

Wednesday, Jan 07, 2015 at 19:35
Hi Pajero...

Yes, perhaps it adds clarity, but it is flawed, with due respect.

If you had deflation in Australia tomorrow we would have so many people on welfare benefits in a nano-second, not to mention businesses going bankrupt, that they'd have to increase government revenue to pay for it or start borrowing from the rest of the world to fund it.

In these circumstances the credit agencies would most likely put Australia on a negative credit watch and this would mean increased borrowing costs for the government (read you and me!)

In a deflated economy no-one would invest in anything, unless of course you wanted to make a small fortune, out of a large one...

And I'm not sure which economists' are suggesting that deflation would be good for Australia, or the world for that matter. Governments around the world, via Central Banks, are doing everything they can to inflate economic growth, not stop it.

Sure, don't pull any out, I'm sure I could find one myself, but they won't be main stream, or credible...

Deflation will stop economic growth by definition.

On deregulation, we couldn't support 3 car manufacturers, let alone 10!

Okay, for sure we could deregulate wages for example as a way of encouraging investment, after all that is one of the biggest problems Australian manufacturing has faced. But who is going to work in Australia for the equivalent wage a worker in China will. You wouldn't be able to feed yourself let alone put a roof over your head...

Mind you, this is well outside the gambit of ExplorOz and travel in Australia (well obliquely you might find a connection) so I'll leave comment at that.

My background is 30 years (and still going strong) of analysing and trading foreign exchange and interest rate markets professionally, so I've got a reasonable handle on the global economy - doesn't mean I'm necessarily correct all the time, but I have a good grasp on the issues and the playing field.

And I'm still getting a pay cheque every fortnight, so I guess I'm calling it not too badly...!


Cheer's Baz, The Landy



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Follow Up By: Bazooka - Wednesday, Jan 07, 2015 at 19:37

Wednesday, Jan 07, 2015 at 19:37
I'm not familiar with any economic school which holds defaltion near to its heart PTD. In certain circumstances and in the short term it can have some positive benefits but in general it's not something I've heard economists anywhere embracing.

The Economist published what I thought was an excellent commentary on current global financial conditions late last year - including a summary of the history, (benefits), and dangers of deflation. It touches upon many apparent economic contradictions including the pros and cons of the current low oil price. Compulsory reading for anyone wanting to understand some of the issues and risks currently at play in global economies: http://www.economist.com/news/briefing/21627625-politicians-and-central-bankers-are-not-providing-world-inflation-it-needs-some
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Follow Up By: AlbyNSW - Wednesday, Jan 07, 2015 at 20:42

Wednesday, Jan 07, 2015 at 20:42
Pajero with your model, what would happen with everyone's homeloan when the value of their property is 30% plus less than the bank valuation that the financial institution geared your loan on?
Wouldn't the banks be forced to reduce their gearing to stay in favour on the world financial markets which would result in the borrower to either come up with a lump sum repayment from.........? To bring the gearing back into line or sold up at a devalued price and most likely face bankruptcy
Off course the same thing would happen on a commercial front as well but on a much larger scale

Or am I misunderstanding what you are saying?
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Follow Up By: PajeroTD - Thursday, Jan 08, 2015 at 03:28

Thursday, Jan 08, 2015 at 03:28
Landy, everyone wouldn't be on welfare, there would be more people employed because there would be more companies doing business. That would change the supply/demand ratio in favor of the employee, causing wage increase. You are making the mistake of looking at money like a constant value. It doesn't matter if we make $1000 a year, if houses are $850, milk and fuel are 1 cent - just an example to make a point. If we make $1m a year on average and houses are $2m then we haven't really made any progress in my opinion. Like I said it all depends on whether you want a lot of money, or do you want to own a lot of things? Money with no value is as good as Monopoly money. If inflation is the answer, then all they need to do is add two zeros to everyone's income and bank accounts. Just replace the word "cent" with "dollar." It costs the same to print currency no matter what number you put on it, so let's just start making trillion dollar notes for everyone. But if that happened, who would bother building a someone a house for $200,000? See, everything would go up, and people like the OP would be complaining about it. Alby, yes everyone's homes would go down in value, but so would every other house. So you could still sell yours and buy a similar house elsewhere for the same money. The only reason they are so high is because the government is artificially controlling values in how much land (supply) becomes available to residential and commercial. USA has the same amount of space, with over 10 times the population, yet land is much cheaper. The only downside to this scenario is that people have mortgages from when homes were overvalued. I don't think homes should be for investment, like I said there are other ways to invest. The people currently renting would be able to afford heir own homes, rather than like now they can't - making it good for investors. I'd rather make it better for everyone else.
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Follow Up By: The Landy - Thursday, Jan 08, 2015 at 06:33

Thursday, Jan 08, 2015 at 06:33
Pajero

I did say I would leave this, but I need to ask the question regarding housing. What about those with borrowings? Okay, so we've managed to reduce the wages of everyone, house prices have come down, meaning most people will have negative equity.

But the bank says, you still owe me the original amount you borrowed...how do you now repay that with your reduced borrowings?

And what about all the foreign borrowings of the major Australian Banks?

You've created a scenario where the housing is only worth a fraction of what it was, but the outstanding debt is still the same. The currency will collapse, banks will need bailing out because foreign lenders will not roll-over maturing debt of the banks.

You won't need to look to far back in history to review the impact of this, just take a look at the GFC.

I'm not sure what you are basing your theory on, but it won't work in the real world as we don't have the luxury of just "making a change" and resetting everything lower...

I hope you don't get to see your deflation...it will be a disaster for Australia, and all Australians...

Cheers, Baz - The Landy
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Follow Up By: The Landy - Thursday, Jan 08, 2015 at 09:16

Thursday, Jan 08, 2015 at 09:16
Could I just add, it is a topic that interests me, but it isn't for the forum pages on ExplorOz.

My contact details are on my members page, feel free to email me!

Cheers, Baz - The Landy

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Follow Up By: PajeroTD - Thursday, Jan 08, 2015 at 09:52

Thursday, Jan 08, 2015 at 09:52
That's fine, I will agree to disagree. There really is no perfect solution (a process that has no downsides), but my concept would be necessary to make everything cheaper and more accessible if that's the goal. Obviously not everybody has that goal. I would rather have more access (supply) to healthcare, education, housing, cars, food, fuel, etc. But that's just me. If that means I have to have my own home value come down and finish paying off my high mortgage, then so be it, at least I will save money in many other areas and be able to pay that loan off. Cheers.
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Follow Up By: Bazooka - Thursday, Jan 08, 2015 at 12:25

Thursday, Jan 08, 2015 at 12:25
Unfortunately deflation has been observed to do almost exactly the opposite of you claim it will do PTD. Jobs don't increase and business actually stagnates. An economic system where prices fall but wages continue to increase is doomed to fail on many fronts. Some countries might be shielded for a period but the waste of human capital and social costs will be felt for decades.
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Follow Up By: TomH - Thursday, Jan 08, 2015 at 12:46

Thursday, Jan 08, 2015 at 12:46
Im no economist but surely if you reduce wages you wont have enough to pay off your high mortgage.

They wont take turnips or promises.
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Follow Up By: PajeroTD - Friday, Jan 09, 2015 at 05:13

Friday, Jan 09, 2015 at 05:13
Forget the currency aspect, just make everything in more abundance, restricting supply for the benefit of a few investors hurts the average person. Driving up inflation might help the top 1%, but it hurts everyone else. You will widen the gap between the rich and poor that way. The first basic law of economics is supply and demand. If you increase supply of everything, then it becomes more accessible to everyone, not just those at the top. It amazes me that some uneducated people do not believe in supply and demand principle.

Tom, I actually think wages would increase if businesses were opening up everywhere, you wouldn't need minimum wage laws (an artificial attempt at creating wealth), it's an illusion. If you made the minimum wage $100 an hour, then you are just inflating everything. I think the real goal should be to have a high earnings to costs-of-living ratio. That would happen if all the commodities we need are supplied in abundance, and the job market favored the employees. (Many businesses trying to find employees, fewer people needing to look for work). When you have fewer businesses hiring because fewer are in existence, then it is in favor of those few employers. The employee has very little power because he or she is a little more desperate to take whatever job is available. You don't have to be an economist to understand this. When I say increase supply, I mean of everything: raw materials, finished goods, the whole supply chain in every industry.
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Follow Up By: AlbyNSW - Friday, Jan 09, 2015 at 08:44

Friday, Jan 09, 2015 at 08:44
I hope they are not teaching this stuff at Uni
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Follow Up By: The Landy - Friday, Jan 09, 2015 at 10:39

Friday, Jan 09, 2015 at 10:39
Pajero

This is turning into a circular argument, but I am still drawn like a “moth to a light”. But I suspect the Mods will (rightly) flick the switch on the off topic nature of it, eventually...

The problem is that you are doing precisely what the “academic” economists do. They look at everything in isolation, it doesn’t work that way in the real world. You can’t erase everyone’s balance sheet, whether it be household balance sheet, or the balance sheet of business and start all over again…

And by this I mean, if you have falling asset prices, something you are advocating, on the opposite side of the balance sheet the liability section remains the same – you still have to repay the original debt the household or business borrowed.

In the case of business, margin calls on loans, or the inability to roll over maturing debt, means that you enter a cycle of business (or households) trying to sell assets, which may be illiquid, at fire-sale prices and you end up in a downward spiral.

Don’t take my word for it, do some research. I have the advantage of working with it day in and day out, in the real world. Theory is great, and the notion of fairness for all is admirable, but the problem is we all head to the lowest common denominator under that scenario.

Like it or not, we live in a capitalist society, and that has benefitted far more than it has affected. And a capitalist society needs growth and inflation. The “theory” being that business borrows money to invest in productive enterprise, creating employment and jobs, and with the effect of inflation the debt in “real” terms is less than what it was when borrowed.

The opposite happens with deflation.

Could I suggest you do some reading of the impact of the GFC and the knock-on effect it has had. Especially for countries like Spain. It will highlight that your thinking is an “idealogy” rather than a “solution”.

And if you have time, take a look at Japan. For most of my career it has been trying to stimulate its economy. It has been stagnate, and the reason why is that they turned into a nation of savers. Save money today it will be worth more tomorrow in a deflationary environment. The economy stagnates…

But to perhaps assist further, could I suggest you investigate history to find examples of companies “opening up everywhere” in a deflationary environment…you'll be reading lots to find an example, any example.

Mind you back in the mid 1800, it did actually occur then. Deflationary prices coupled with economic growth. This was due to developments in technology at the time and productivity.

Anyway, as always, it is a matter of opinion for which I am happy to agree to disagree on…

Cheers, Baz – The Landy
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Follow Up By: PajeroTD - Friday, Jan 09, 2015 at 17:35

Friday, Jan 09, 2015 at 17:35
You keep saying you want to end this discussion, but you keep making claims, and throwing out lines like "you do what all academics do." I'm not trying to start a fight. Look, I want everything to be cheaper, you think it's better if everything is really expensive. I will NEVER agree with your philosophy that inflation is necessary for economic prosperity. It's ridiculous. Now, if you want to end the discussion, you don't also get to demand the last word. I like capitalism by the way, but it should be free market, not government picked (crony capitalism). There's people who say free market didn't work for us.... we never actually had it, we've been heavily regulated for a long time.Australia, England, Europe, USA have all gone for inflation, mandated higher wages. Look at us, there is no growth. We are doing it wrong! The growth is in the BRIC countries. They don't have unions impeding the growth! It beats the hell out of me why you are trying to discuss Spain, which is nothing like what I am talking about. Clearly you do not understand. Again, if you respond, I will respond back, so if you want to end the discussion, you are free to do so right now. If you don't respond, I won't say another word. By the way, I thought Australia was too expensive to live, I chose to move to the states, tomorrow, I will go fill up my 4x4 F150 for $40! I could never afford such a nice big vehicle or the tank of fuel in Australia, unless I was rich. See here, anybody can have it. That's because they are supplied in abundance. That way, not just the rich get to enjoy having nice things. But I think even here has gotten out of hand, I am seriously looking at investing in Brazil! My dad owns a factory in China. Wake up! Western civilization is going backwards. It's doing everything the opposite of what I am saying, and there is no growth. Why would we invest money in Australia, just to have it go nowhere? Yes deflation can be a bad thing if the cause is a poor economy, it's a good thing if the supply is high, and demand is still there. Why would companies invest in Australia when everything's so expensive and hard to start up. If you disagree with me, why don't you just start a car manufacturing business in Australia and hire thousands of employees? You can't, it's too hard, too expensive, you can start one in China a lot easier and make a whole lot more money. If the mods feel the need to close the thread like you say because people can't handle opposing opinions, then so be it.
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Follow Up By: PajeroTD - Friday, Jan 09, 2015 at 17:46

Friday, Jan 09, 2015 at 17:46
So Alby, you just admitted you have no f'ing clue about what they teach at uni. No doubt one of the many reasons why you can't offer a substantial argument. Just empty attacks. Pathetic! You can sit back and say "oh but it's all theoretical/academic," fine, run your own business, and then say you wish your costs would go up through the roof. It's a lot easier to work for someone else (or not work) and suck everyone else dry, so I recommend you just do that. :)
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FollowupID: 831104

Follow Up By: Michael H9 - Friday, Jan 09, 2015 at 17:49

Friday, Jan 09, 2015 at 17:49
That's why the US with 5% of the world's population uses 25% of the world's petrol. If we get the rest of the world up to speed we could burn it all in no time.
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FollowupID: 831106

Follow Up By: The Landy - Friday, Jan 09, 2015 at 18:41

Friday, Jan 09, 2015 at 18:41
Pajero

I’m a self-confessed “moth to the light” on this stuff (said so earlier), so given you are continuing to place a point of view on a topic that is oblique, at best, and put it out there in a public forum expect to be challenged on it by those who may not agree or who have a differing viewpoint.

And rest assured, I’m interested in your viewpoint, but there is no need to get worked up and bust a boiler because I, or others for that matter, don’t happen to agree.

My concern is that eventually the moderator’s will blow the whistle on the discussion because we are way off topic here, and rightly so, and hence why I offered for you to contact me directly, by using my publically displayed address in the members section, where we can continue to discuss. But I’m happy for it to continue here until the whistle is blown…

As for making claims, well I’ll assert I am giving you sound economic theory that works in the real world…and as for fighting, hell, I don’t need a fight over this – I see it as a discussion on viewpoints, never considered it a fight!

Cheers, Baz – The Landy
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Follow Up By: PajeroTD - Saturday, Jan 10, 2015 at 03:13

Saturday, Jan 10, 2015 at 03:13
Landy, when I read the science on this stuff (or any science), I only care to read peer-reviewed journal articles. I can send you some PDFs by email or Dropbox if you are interested, I don't have open links for them, and they are all way too long to copy and paste. It sounds like you are interested in economics, and that's a good thing whether we agree or disagree. Not even in the world of economists, is there consensus on what is better or worse. It all depends on what you're trying to achieve. Since I have been in the US, I have seen two deflations (if we can use oil as the benchmark here). Petrol (gaaaaaaaassss) was up to $4 a gallon in mid 2008. Around about November (election time), it fell to around $1.30. That was because of the GFC, it was a result of a bad thing, though people still enjoyed the lower prices. What we are seeing now is a cartel losing power because it now has to compete with fracking and alternative energy sources, so we have competition, and reduced demand on Middle Eastern oil. That's what brings us lower prices today, and that's a good thing unless you're a multi billionaire in Saudi Arabia or UAE. When people have their own private 747s, you know they are monopolizing the market, and that's a bad thing (unless you work for Boeing).

@Michael, yes I am the reason for our global oil consumption! Mind you, all America would have to do is make each state its own country and have the EU form its own country, then they would be the ones consuming most of the oil! Think about that. Seriously though, I hope for a reduction in demand, that will bring down the prices even further! :)
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Follow Up By: AlbyNSW - Saturday, Jan 10, 2015 at 09:51

Saturday, Jan 10, 2015 at 09:51
Pajero with all due respect I have not attacked you at all, I have respectfully asked you questions on basic fundamental principals of real world economy and note you have no answer to them
You are right that I have not been to university as it is of no value to me
I started my business from scratch 30 years ago and employ a number of people including those with university degrees
I am from the real world and make my comments from real world experiences not textbook academic ideals
I dare say, it is you who have never run your own business or had to approach a bank for a large business venture and demonstrate its viability and your asset backing to support it

I will take a wild guess and say you are university taught and work in a public sector perhaps even in Canberra? Am I close?
Oh and please don't turn this into a personal attack , I have said all that I have with respect
Cheers
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Follow Up By: PajeroTD - Saturday, Jan 10, 2015 at 10:57

Saturday, Jan 10, 2015 at 10:57
Actually Alby, you have it completely wrong. I didn't even pursue a degree until after 10 years of working in the PRIVATE sector, yes I have owned two businesses, about to start a third, so you can get that image out of your head of a 21 year old college student with no real world experience and "text book" answers. Nice try though! I will never try to work for the government, I am a free market capitalist! Also, if that's your idea of "respect," do you mind sharing a little less of it? Thanks kindly. :)
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Follow Up By: TomH - Saturday, Jan 10, 2015 at 13:33

Saturday, Jan 10, 2015 at 13:33
You say you can fill your F150's tank for $40.

Must be a pretty small tank as when I was in the USA a few months ago we would have got on the average for $40, 11.14 gallons. Even at this weeks prices would only get 13.79gal at $2.90 average
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Follow Up By: AlbyNSW - Saturday, Jan 10, 2015 at 14:20

Saturday, Jan 10, 2015 at 14:20
I am not sure what I said in my last post that you have taken as disrespectful, my guess that you were from the public sector was not meant as a derogatory comment , we need public servants and it takes all types to make the world go around.
I made that assumption on the basis that you must be in an environment of a stable income and employment and not so effected by the state of the economy. The industry I am in is the first to stop and last to get going again when we gave an economic downturn so your economic theories send shivers down my spine.
Anyway back to my original question which Baz also asked in a more detailed fashion
How with your model do you deal with the massive negative equity that the vast majority of Australian individuals and businesses will encounter? The only outcome I can see is bankrupcies on a massive scale and our whole economy collapsing. I am happy to be wrong on this and learn from someone who is far more qualified in this field than I.
Regarding your comments on China, they are already heading in the same direction as much of the rest of the western world and getting too expensive for manufacturing for a number of companies that are now moving on to exploit other other economies like India
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Follow Up By: The Landy - Sunday, Jan 11, 2015 at 08:07

Sunday, Jan 11, 2015 at 08:07
Hi Pajero…

As I indicated earlier in this thread, not only do I have an interest in this stuff, I am involved in trading and analyzing financial markets; currencies, interest rates, and commodities. I do this for a major financial institution and have been involved in the market for over 25 years, in fact since the Australian floated on world markets...

Doesn’t mean I get it right all he time, but rest assured my employer makes sure I have access to the world’s best thinking on the topic, and in return their expectation is that I can analyse and make sense of it. I guess I’m doing the right thing because I’m still there.

I’m just putting that back out there so you can understand I’m not some “luny” with a warped idea on how this stuff works…

Deflation is when prices in the economy fall as a whole.

You use oil as an example. Oil is a freely traded commodity on world markets and responds very quickly to supply and demand fundamentals, and perceived economic activity in the future. But I would not use it as a benchmark for determining whether we have deflationary forces in the economy.

It is right to suggest that higher oil prices have encouraged the development of alternative sources of oil, or energy, as a way of capping prices – the supply and demand curve at work.

High oil prices a number of years ago made marginal alternatives more viable and that has acted as a damper on prices. Mind you with the oil price at current levels the more marginal producers of oil, and many alternative sources will not be viable. Supply will be curtailed and prices will eventually respond higher.

But can I say, this is quite different to your suggestion of encouraging “deflation” in an economy as a means of achieving good outcomes through lower prices.

And I also highlighted earlier that is simply not possible, not in the real world at least, to ignore the current state of the household and business balance sheet – you can’t just instantly make all prices cheaper without having severe consequences for the economy.

Perhaps a better measure for what you are arguing is “affordability”. What is the cost of goods relative to the level of current income and viewed in a historical context?

Cheers, Baz – The Landy
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Follow Up By: PajeroTD - Sunday, Jan 11, 2015 at 15:28

Sunday, Jan 11, 2015 at 15:28
@Tom, yeah it's come down a lot since you were here. We did a road trip in May, and the highest we paid was about $4.40 a gallon in California. It was about $3.70 here in Idaho at the time. It's dropped to about $1.80 here and about $2.20 in California now. Crazy! I'm normally used to paying $80 to fill it. 25 gallon (95L) tank I think.

@Alby, yeah I wouldn't be surprised if China stops growing and the growth moves to Brazil or India (or both). There's many places that have low costs, but they don't have the technology to compete with China yet. However, I am sure it will happen.

@Landy, I think your last sentence summed it up pretty well! That's what I was trying to say with earnings to costs ratio. We are earning more dollars now than we did in the 80s and 90s, but those dollars seem to disappear quicker and easier with the higher costs of living. Some things are cheaper now than back then though. My dad's Apple Mac SE30 cost $15,000 and had an 80MB hard drive and black & white screen. I remember he paid $2,000 for a 68cm TV and $1000 for a 4-head VHS with stereo sound. Flights between Melbourne and Sydney were around $800. Nearly everything else seems to have at least doubled in price.
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Follow Up By: Bazooka - Sunday, Jan 11, 2015 at 16:32

Sunday, Jan 11, 2015 at 16:32
There's perception and reality. As a whole we (Australians) are significantly better off than we were two or three decades ago (assets and disposable income), not just in terms of purchasing power but also taking into account the value of social benefits. But that, like any economic fact/factor considered in isolation is a gross oversimplification - it depends among other things on personal circumstances, age-group, and the "pecking order". Some have obviously done far better than others leading to a widening of the gap between the have and have-nots, and housing affordability in some cities is at its worst for a long time. Overall though products are now either "better" or cheaper or both when purchasing power is taken into account, and certainly air travel has never been more affordable.

The GFC hasn't been as kind to many other nations or individuals but some economists point out that Australia's unprecedented period of sustained growth must eventually peter out. Or, as the RBA said recently, "recession is a 100% certain, only the timing and the causes are unknown". Highly leveraged (often younger) households will struggle most in that scenario.
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Reply By: Jarse - Sunday, Jan 04, 2015 at 10:27

Sunday, Jan 04, 2015 at 10:27
I affectionately call it the "Australian Tax".

It's not just foreign goods purchased overseas - you can often purchase Aussie-made goods from overseas sellers at a significant saving.

Case in point RESMED medical products. Over 90% of their product lines are made in Australia and exported all over the world. A fantastic export story. HOWEVER - the medical device I bought locally cost $2000.00 The price of the same Aussie-made device in the USA is $950.00 WHY?

The "Australia Tax". We're being gouged by these companies.

I buy all my medical gear from the USA now. I don't care if I have to pay GST on it in the future - it'll still be cheaper to airfreight the same item into the country in a couple of days than buying the same item locally. And the Aussie manufacturer still gets a sale (albeit without its thieving "Australia Gouge Tax").
AnswerID: 543699

Follow Up By: Bludge - Monday, Jan 05, 2015 at 11:41

Monday, Jan 05, 2015 at 11:41
Jarse,

While I agree that it seems wrong and the same has been said of ARB with their products.

The real aspect is that in Australia with 20 million people they may sell 1000 of that product while in the USA they with 250 million people they will sell 12,500 of that product.
That gives them purchasing power.
Not only that but the importer will order and pay for those 12,500 items up front in many cases to obtain the cheaper price knowing that he can sell or turnover that product and still make a decent profit.
Unfortunately it's the 12,500 items plus every other big overseas market that buys in bulk that keeps RESMED open, not the 1000 items in Australia. If they sold the product in Australia for USD950 the bulk buyer would want to pay even less than they do now. Catch 22, or like so many other manufactures, move to China.

So there will never be equality in pricing globally as long as your bum points down

The "on cost" to operate in Australia is enormous compared to many places.

Floor space rent- Rates - Addition waste disposal - insurances -Power
Wages - Super - Leave loading - Sick pay - compulsory training - work cover etc.

Office floor space in Sydney is over US$300 per square metre dearer than New York. Retail is closer to US$700 per sq mtr dearer in Sydney according to International construction cost survey 2012.
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Follow Up By: TTTSA - Wednesday, Jan 07, 2015 at 17:57

Wednesday, Jan 07, 2015 at 17:57
Then please explain to me how the Monaro that sold in the USA was 15-20K cheaper than here, and they weren't buying in bulk in the USA.
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Follow Up By: Michael H9 - Wednesday, Jan 07, 2015 at 19:21

Wednesday, Jan 07, 2015 at 19:21
If they sold it 15-20k cheaper here then they would go broke. The same can be said about ARB diff locks. Much cheaper in the US. If they sold them here at that price they would have to shut their shops. It's all about margin, turnover and overheads. Not about how much it costs to make.
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Follow Up By: TTTSA - Thursday, Jan 08, 2015 at 16:24

Thursday, Jan 08, 2015 at 16:24
They've gone broke anyway so that didn't work. Surely cash flow is the key, sell cheaper sell more.
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Follow Up By: Michael H9 - Thursday, Jan 08, 2015 at 16:32

Thursday, Jan 08, 2015 at 16:32
You have to find the sweet spot where the price versus turnover gives you the maximum return. If you drop your margin 50% you have to sell twice as many to stay at the same level. In some markets you can't sell twice as many but your overheads keep on chugging away at the same level. Do you think they would sell twice as much petrol at Cameron Corner if they dropped the price?
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Follow Up By: Bludge - Friday, Jan 09, 2015 at 12:01

Friday, Jan 09, 2015 at 12:01
Sorry TTTSA I have been away from civilisation.

How could they sell them cheaper, quantities as I said the US buy in bulk.

I quote Quote from Carsguide (click here to read).
___________________________________
In 2004 and 2005 Holden shipped 31,500 Monaros to the US as a Pontiac GTO - more than twice the number of Monaros sold locally over four years.

More than 41,000 Commodores were exported to North America as Pontiacs between November 2007 and February 2009, almost equivalent to Holden's annual sales of Commodore at the time - but the deal ended when the Pontiac brand was axed in the wake of the Global Financial Crisis.
____________________________________

So just to reiterate that, if you bought 1 car at $30,000 would you expect a discount if you bought 4 cars? Now multiply that purchase by 1000 what discount would you expect. This is without Australian sales and luxury tax compared to USE sales tax.
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Reply By: The Bantam - Sunday, Jan 04, 2015 at 11:32

Sunday, Jan 04, 2015 at 11:32
Sure there are "additional costs" to operating in Australia compared to some countries overseas......but the claim that they alone are responsible for some of the rediculously inflated prices we typically pay is compltely false.

Truth is there are a lot of things we pay for that the price we pay has nothing to do with the cost of supplying the product or service...bottled industrial gas for example.

There are a lot of items that are being priced "as high as the market will stand" ......as a matter of polocy.........these mostly large companies are not interested in making a reasonable margin and a fair profit......they want to make as much as they possibly can and FU.

While there are some local distributors and retailers that are guilty of what is plainly profiteering, it is mostly the large international companies.....in particular US companies that are to blame for most of the rediculoulsy high prices.....they simply DO NOT supply to the Australian market at the same price they supply elsewhere and that has not a thing to do with scales of economy, freight or the cost of doing business.....it has everything to do with making as much as they can a FU.

Music is a prime example.....considering the product is in many cases delivered electronically from US servers and there are virtually no incountry costs to delivering the product .....we still pay 70% more for MP3 downloads across the board than they do in the US.

If buying music on CD, in almost every case it is way cheaper to buy NEW product from a ligitimate US or UK seller...including freight than it is to buy from an ligitimate Australian seller.

What realy grates is when you can buy Australian branded, Australian made, 4wd product like diff locks for much less from a US bricks and mortar store INCLUDING FREIGHT than you can buy them here.

Of course the economic liberals will try to tell us that competition will drive prices down......in a very few cases it might...but in most cases its not a valid idea.
Particulraly when the large players deliberaly avoid or supress competition.

There are some markets where there is no competition and there never will be because there are only one two or three players in that market world wide and they studioulsy keep out of each others way...OR..they are not stupid enough to get into a price war.

In many markets there may be many players......but no real competition and no downward price pressure.

There are plenty of examples of products that we pay a fair and equatable price for and reasonably comparable to what is paid overseas.....and mostly these products incur the same costs and have similar distribution systems.

Powertools for example.....we pay failrly similar prices for very similar if not identical products as they do in the US or the UK......even before internet was big, I was reading a couple of US and UK woodwork magazines....the prices in the adds in those magazines where comparable to what I would expect from an Australian bricks and mortar tool discounter.
If ya want to check this out....look at AXMINSTER in the UK and TOOL CRIBB OF THE NORTH in the US and compare them with your best locak tool shop.


It the same time I was getting US pro sound industry magazines.....and our wholesale prices where more than the advertised US recommended retail prices....that represents paying at least 50% more in Australia.....in many cases 100% or 200% more.

There where a couple of pro sound brands that dropped a full 30% off their entire Australian wholesale price list, when they realised that clone products that where better built than their own, and paralell imports where realy giving them a spanking.

If they can afford to drop a full 30%.....they have to have plenty of margin up their sleve.


When charaters like Jerry Hervey, come out bleating about this cost or that......believe one thing.....they want to continue charging as much as they can and they will shout loud and long about the smallest impact on their bottom line.

As far as supporting Australian business and buying local.......you can do that if you like...but don't be under any illusion where a very large portion of the ticket price is going.......straight into the pockets of the very rich and probely overseas.

Buy where you can get the best deal.......then spend what you save with a local tradesman or a small time direct importer.

I recently paid $400 of a new digital oscilliscope.....yeh out of china.....If Id have paid retail it would have cost me well over a $gorrilla.....If Id have baught it "wholesale" on one of my accounts it would have cost me arround $800.

That is between $400 and $800 I can spend with local businesses.

I know if I spend $110 on a wheel align and balance down at my friendly independent tyre and mechanical......arround $40 will go directly out in wages and another $30 into the business owners pocket....the rest in business costs mostly locall incured.

If Id have paid $1200 to one of the major test equipment companies.....arround $200 might have stayed in the country.

Buying overseas may just keep more money in Australia.

cheers

AnswerID: 543703

Follow Up By: AlbyNSW - Sunday, Jan 04, 2015 at 13:17

Sunday, Jan 04, 2015 at 13:17
Whenever these sort of conversations come up all I can think of is how foolish we all are being exploited by these big businesses, over worked and under paid as we do these half cocked calculations on how much money they are gouging from us simple plebs.
I often say to people if it is that easy and there is so much money to be made why are you still working for the boss and not out there getting some of the action for yourself?
It is a free country with various govt grants you can exploit to get your venture under way what are you waiting for?

The reality is that business is tough for the great majority of companies and I don't begrudge the likes of Jerry Harvey who has created a business as he has on his own ( these days his wife is more of the driving force I am told) and good on him for doing so. Any one of us here had the same oportunity to do as he has and the many others like him
Business is just that, they are in it to make money not run a charity for the publics consumption.
We all make the most of our own situations and try to get the best $$$ we can for what we do and the corporate end of town are no different, they charge what they like for a product or service and nobody is making me buy it off them so market forces dictate the level of the market
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Follow Up By: The Bantam - Sunday, Jan 04, 2015 at 14:19

Sunday, Jan 04, 2015 at 14:19
Mate I stopped working for the boss over 20 years ago.....how do you think I know what the wholesale prices are.

Ya right no business is in it for charity......opps sorry some ARE....there are a lot of charities in business...and there are a number of business and not for profit organisations that would have you believe they make no money, where in fact they are channels or fronts for large major companies


The fact is If many of these predatory business had their way we would not have any choice but to pay the price they demand and in many cases that is very much the case.

many of these businesses engange in what is plainly market manipulation, commercial coercion under threat and a whole piple of other plainly dishonest practices that the average working joe would be absolutley goob smacked that they actually get away with....because if the average joe tried the same practices they would end up in front of the judge.

What I do begrudge Jerry Hervery is trying to piss in the pockets of the Australian Public....like somebody is stealing from him by buying from anybody else.

BTW...I don't buy from Mr Harvies operations, because I do not like how they treat me as a customer walking into their store.

One major thing I do have against many large businesses is that their proffit and much of their sucess at the cost of others....they stole their sucess plain and simple.

Believe me I have stood toe to toe with this sort of people...they have absolutly no concern or respect for either their suppliers, employees or their customers.

They are quite prepared to treat their suppliers, employees and customers badly....but when they get on the other end of the stick the winge loud and long.

These are the businesses that jump up and down when their small customers are a few days late paying their bill....applying unreasonable and illegal penalties.....while at the same time routinely running their suppiers and contractors...especially the small ones (who don't have legal staff on hand) well in 90 and 120 days.

Don't bleat to me that business is hard.

There is reasonable profit and there is exploitation....plain and simple.......and here in Auatralia we have been copping the Pineapple for a very long time.


There are good reputable, responsible and ethical business that make very good steady profits.

Business that realise they will continue to make good profits if they treat people properly.


We do pay over the odds for a lot of stuff in this country......AND...there IS NO reasonable justification for it.

cheers
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Follow Up By: AlbyNSW - Sunday, Jan 04, 2015 at 16:07

Sunday, Jan 04, 2015 at 16:07
Agree with you about the charity in disguise comment , a couple of years ago I did some work for one of those 'charity' organisations that have shopfronts all over Australia. I was gobsmacked to hear the revenue they produce from some of their Sydney stores, some are turning over over a million dollars a year selling donated items using volunteer labour.
As far as the big end of town bullying the little bloke, yes I know it does happen and I don't agree with it but it happens at every level of business. Medium size businesses do it to small business and small business does it to sole traders. The local cafe does it to his wait staff as well. Doesn't make it right but that is how it goes and you have to do your best to avoid it
It is a lot easier for the faceless corporate companies to treat people unreasonably though, just like a faceless beaurocrat does as well
I try and do business with companies of similar size so that I can stand my ground when needed and feel I have a fighting chance should a dispute arise

Jerry's stores are all ( or nearly all) franchises so you are actually dealing with a small business so any comments he is making are on behalf of small businesses as I see it.

as far as paying over the odds goes, yes I agree with you that it happens in some areas but the main reason it happens is because the consumer allows it to happen, stop buying a product and see what happens.
You can say they are greedy and exploiting the public but look at it from another point of view. You are a company from O/S or a local who has been appointed distributor of a product , you do some market research and believe that you can comfortably sell that product on the Australian market for $X , you would have been happy to sell it for less but the marketplace will accept the higher price tag, what would most people do in that position? Or to put it even simpler, how many people would do their job on less salary than they are currently offered?, there would be many but no one says to their boss "no no don't worry I will happily do this job for 10k a year less because I like this job"
It is human nature
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FollowupID: 830765

Follow Up By: The Bantam - Sunday, Jan 04, 2015 at 17:21

Sunday, Jan 04, 2015 at 17:21
Yeh... well.

A friend of mine who is a pretty good salesman and a fair sort of bloke with it says.

"the scriptures say, "a fool and his money are soon parted"... I have no hesitation in parting a fool from his money..at least I'll give him some value for it...someone else may not."


I have to say that the average australian consumer is not very clever..some are outright dumb.

It amazes me how little people know or want to know about where stuff comes from and how it gets to them.

I know builders and tradesmen who buy all their tools from major hardware chains, completely unaware of the quality tool discounters and specialist trade suppliers...and of course they either pay well over the odds or they get rubbish.
You talk to them about tools and they only recognise a couple of major mass market brands...those brands being medium quality and at full retail price & then some.....when you mention a top shelf brand, they have never heard of it and immediately dismiss it as inferiour to the brands they know.
Mention that some of the generic brands sold at half the price of their favorate brand may actually be of similar or bettter quality..and they wont believe you...in spite of all the mass market tools comming out of china these days.

I was in a major hardware store this week looking for a mid quality cauking gun.......the excelent value item I have been using is no longer stocked......BUT.......there side by side were three identical caulking guns under three different brands...painted 3 different colours.
Because the quality I wanted was not there at any price....I certainly was not gong to cough $40 to pump a bit of sealer.
I baught the one priced at about $4......next to it was another priced at arround $7 and a little further along the same item in a different colour with a " top spec brand" on a cardboard tag at nearly$20.

How do I know they where identical.....I sat on the floor and looked at em....carefully......mould for mould, rivet for rivet, dag for dag.....it was plain they came out of the same machines.

What sort of ignorance or arogance could support such a waste a valuable shelf space.

we often hear people bleat that it is the consumer that is responsible for the market being price focused.....well when you are being gouged every day and you know it..its hard to be anything else.

But speak to any good sales trainer.....the price focus lies squarely at the foot of the marketers.......it is stupid, lazy marketing......but they want people to buy on price...why because the managers of most of the consumer retailers arent very clever either........they have neither the marketing smarts nor the guts to sell anyother way.

Truth to tell...most of the large retail stores have nothing other than price to compete with.
So much of the retail market has become so price/discount focused.....that they can not see, do or offer anything else.


On the matter of being discount focused......the australian public has swallowed this fuel discount thing hook line a sinker.

It is amazing what poeple will do to get arround 2.5% discount on their fuel....THEN..under the guise of a further 2.5% discount have the money saved taken off them in the extra margins charged on the goods ( that they did not need) purchased to achieve the extra 2.5%.
That is without the actual arguments about fuel prices.

Yeh Ill use a fuel discount voucher...but only if I have one for the service station in question.

The average retail customer needs to get smart.....yeh and not half smart like many....or they will continue to pay more for less.

cheers
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FollowupID: 830772

Follow Up By: AlbyNSW - Sunday, Jan 04, 2015 at 18:28

Sunday, Jan 04, 2015 at 18:28
You are right about the consumer in general is not very clever or savvy with their purchases and the retailers know it and use it to their advantage
I know what you mean with identical products in different packaging, you are seeing it more and more
I know it sounds crazy but they must still sell lots of the $7 and $20 caulking guns as well otherwise they wouldn't be there. If a product does not turnover well on a shelf it is deleted from the lineup

My mate is a wholesale supplier to a lot of these chain stores and the brief is often that they want a wheelbarrow for example and we need it to retail at $X dollars, what can you offer me...........he then gets on to his Chinese connections and arranges to have samples sent over for evaluation. As you said it is all about the price not the quality. That is what drives a lot of these markets nowadays
I am looking to purchase a new socket set and was checking through the Sidchrome catalogue and it says product sourced by Sidchrome, even they are not making their own gear any more it seems
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Follow Up By: Member - John (Vic) - Sunday, Jan 04, 2015 at 22:46

Sunday, Jan 04, 2015 at 22:46
Your wholesaler was buying that very same oscilloscope he was trying to slug you $800- for from the same Chinese manufacturer you bought it from for $400-.
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FollowupID: 830792

Follow Up By: The Bantam - Monday, Jan 05, 2015 at 00:21

Monday, Jan 05, 2015 at 00:21
Actually no he was not.

There are several asian based test equipment RESELLERS that carry a full range of genuine brand name items such asTectronics, fluke and kyritsu at prices well below the Australian Wholesale cost.
They mostly also offer brands such as Atten, Rygol and Hantec.

Several of these resellers actually have Australian wharehouses or at least trans-shipping basses.

I was chatting with a local independedent instrument calibrator, who is also a fluke dealer and service agent about this very matter.

While he sells Fluke product to business and institutional buyers who insist of buying product thu the authorised australian dealer chain.....he knows he can buy genuine fluke product from an asian reseller at half his dealer buy......If he is buying fluke for his own use....he buys if out of asia not thu the local dealer chain.

By the time it gets to the end user...we are paying at least 3 times what the authorised dealer purchsed product would cost in asia.
And the asians are still making a good profit.


If you realy want an example of a real rip....look into fibre optic equipment.
I priced a name brand stripper from a "reputable local supplier", I was quoted $100 ( pluss freight out of Sydney), if I purched the very same item from a similar "reputable suppier" out of the US it would have cost me around $75 including freight....the actual item cost would have been arroud $50.
I purchsed mine thru a well known test equipment supplier in asia......It cost me $15 pluss about $5 freight.
And that is what I would think is reasonable for two bits of flat, straight, metal with two groves ground in them, riveted together and the handles plastic dipped....seriuolsy they look like something you would see in a WW2 POW moovie.
Its not like they where a real piece of engineering like Lindstrom 80 series cutters.

There are some things we are being ripped on badly.

On the matter of test equipment and beeing ripped......Calibration..hell some people are beeing ripped good and propper.
Back when I first started getting my megger calibrated.....I was quoted $250 and 2 weeks turn arround for a regulatory cal.....the lab I go to now does it for arround $50 certificates tags the lot and most times I don't even sit down..and yes it is a full NATA certified lab.
Its 10 to 15 minutes work..including the paperwork...wot costs $200.

These days it is just so easy to par far too much.

cheers
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FollowupID: 830796

Reply By: Peter T9 - Sunday, Jan 04, 2015 at 11:45

Sunday, Jan 04, 2015 at 11:45
You should try being a farmer in Australia and making a decent living.

We are the only industry that pays full retail for our inputs and get wholesale for our outputs.

When you compare what we pay for machinery parts in Australia to oversees it is horrific.

Many people are now directly importing from overseas for huge savings.

You can't tell me the importers are unable to source parts at a cheaper rate than a single farmer can.

AnswerID: 543705

Follow Up By: Member - johnat - Sunday, Jan 04, 2015 at 13:09

Sunday, Jan 04, 2015 at 13:09
Not only do we pay retail for inputs, but we take our outputs (products) and put them to the buyer asking them "How much will you pay for this?" The auction system is flawed as far as a farmer is concerned, as there is no certainty of return on investment (of both time, effort and inputs costs).
Can you imagine Holden or Ford making a car or several, and then putting them all to auction at the end of the month - no dealer sales, etc, just the auctions. Not a chance!
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FollowupID: 830728

Follow Up By: BunderDog - Monday, Jan 05, 2015 at 17:17

Monday, Jan 05, 2015 at 17:17
And add to that the levies, fees, Jamie tax etc that farmers have to pay.
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FollowupID: 830830

Reply By: Member - mark D18 - Sunday, Jan 04, 2015 at 11:56

Sunday, Jan 04, 2015 at 11:56
Boobook2.
Factually you may be right on some of your points.
But I think there is not much wrong with Australia.
Best country in the world by a mile.
The more you travel Oz the better it gets.

Might be time to Smell the roses.
AnswerID: 543709

Follow Up By: Boobook2 - Sunday, Jan 04, 2015 at 12:27

Sunday, Jan 04, 2015 at 12:27
Don't get me wrong Mark, I love Australia and travel much more than most. Generally 2 x 4 - 6 week tours and 12 - 15 3 - 6 day trips. That is a completely different issue to being ripped off when shopping though.

Australia is a beautiful place but it is far from perfect.


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FollowupID: 830717

Follow Up By: Member - Mfewster(SA) - Sunday, Jan 04, 2015 at 12:40

Sunday, Jan 04, 2015 at 12:40
I'm a proud Australian and love the place. But you do need to open your eyes a bit. Travel overseas as well as in Australia and there is much to learn.
The biggest problem we have is housing prices. It is ridiculous that with the land we have that housing costs should be so high. The problem is land costs rather than building costs. Need to pay for housing creates the main pressure for upward wage movements. No government here has been game to address the causes of our housing costs.
And also add our exceptionally poor public transport system. This adds enormously to everyone's daily cost of living and pushes wage pressures upwards.
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FollowupID: 830720

Follow Up By: Member - johnat - Sunday, Jan 04, 2015 at 13:13

Sunday, Jan 04, 2015 at 13:13
Public transpotr? What is that?

Oh, yes, that's the trains and buses and trams that proliferate in the cities but never get beyond the sandstone curtain!
Living, as I do, just 20km from a fair sized country "city", we have no choice but to drive to town (walking is out, and the groceries would not fit on a treadly) as there are no trains/buses/trams out here!
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FollowupID: 830733

Follow Up By: Member - Mfewster(SA) - Sunday, Jan 04, 2015 at 14:08

Sunday, Jan 04, 2015 at 14:08
Hi johnat,
Yep,that is exactly the problem and the pressure it puts on workers drives wage demands. When the mining boom was at its peak we needed to invest hugely the the infrastructure that would have made us competitive when the boom was over, like quality public transport. But what did we do? We blew it on big tax breaks to the wealthy who then used the windfall to buy up real estate.
It is absolutely eye opening to travel on trains in Asia and Europe.
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FollowupID: 830745

Follow Up By: Boobook2 - Sunday, Jan 04, 2015 at 14:34

Sunday, Jan 04, 2015 at 14:34
Member - Mfewster(SA) posted:
snip
It is absolutely eye opening to travel on trains in Asia and Europe.

Could not agree more. We have recently traveled on high speed trains in China and more recently Japan.

1 1/2 hours to go 500km 3 hours to go 800km. EVERY 15 mins....

Any politician pushing for Badgeries creek in Sydney should take a trip on those trains.

It is quicker than Mel to Sydney by plain by the time you count getting to the airport, parking, security, getting to the gate etc.

So we spend $40 - 50 Billion on a new Sydney Airport that will take 4 hours or build a bloody train line that has more room, no baggage limit, more comfortable and quicker. Unbelievable. The line could also go to Bris and Canberra and take freight.
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FollowupID: 830748

Follow Up By: Boobook2 - Sunday, Jan 04, 2015 at 14:37

Sunday, Jan 04, 2015 at 14:37
Oops no bloody edit on EO ( that's another thing wrong with Australia LOL).

Plane, not plain. I guess the train will go on the plain.....
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FollowupID: 830749

Follow Up By: Member - mark D18 - Sunday, Jan 04, 2015 at 15:07

Sunday, Jan 04, 2015 at 15:07
Boobook

I can your point to a certain degree , but I try really hard to concentrate on the positives of our great country .
I know there are many Negatives and you have pointed out a few of these, am not saying I don't complain about something's , but when I do the Minister for War and Finance gives me a well deserved uppercut .
The older I get the more I realise happiness mostly is a state of mind .

Cheers
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FollowupID: 830755

Follow Up By: TomH - Sunday, Jan 04, 2015 at 16:06

Sunday, Jan 04, 2015 at 16:06
Public transport in Brisbane is a joke nowadays. Trains once an hour during off peak to our area.

You used to be able to buy a daily ticket and travel around for a reasonable price. Now you can only buy single tickets that will cost a family a fortune for a days travel around the city.
In contrast we were in Sydney and could travel anywhere one way for $2.50 Oldies rate. Great we left vehicle at home and used transport.

This year in New York. Trains every 5 mins at times cheap as. $2 for 30 mins to Brooklyn Why would you take the car.

But then up to 11,000,000 a DAY use the subway which possibly explains how they keep the prices down.
Scale of economy I guess but I also try to buy overseas if possible.
Rockport shoes $240 here $75 at Orlando and Las Vegas.
Wifes perfume $235 here same thing in high end shop Las Vegas $120 This was when $ was at parity.

Some stuff is comparable to here Clothing like Jeans and shirts werent worthwhile carrying all the way home.

Fruit and veges were a lot cheaper. Meat was comparable.
House prices in the cities. Dont even think about it.
A run down Brownstone in the street we stayed in in Brooklyn would cost $800,000 and be a doer upper.

Cars looked at a GMC Denali top of the range 4x4 Had everything imaginable. hot/cold seats, off road suspension, the works. $54,000 drive away and that was out in the sticks in New Mexico.
Have to put a 1 in front of that here. Chrysler 300 $47000 here Our rental was new $26,000 drive away. Rental cost $36 a day fully insured. Try that here.

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FollowupID: 830764

Reply By: Michael H9 - Sunday, Jan 04, 2015 at 14:26

Sunday, Jan 04, 2015 at 14:26
I can tell you this, I run a small business that employs 4 people other than me. I make less than all of them. The overheads are enormous. Biggest cost by a mile is wages, rent is next, then insurances and utilities. If you think that business owners are ripping you off and hoarding cash then you are wrong, at least with respect to the many other owners that I know. We are all lucky if we can keep the doors open.....truly, I mean it. I can't speak for the large corporations though. All I do know is that they can retail items at what you call inflated prices, cheaper than I can buy them wholesale. How do you think I feel about that?
AnswerID: 543722

Reply By: Hairy (NT) - Sunday, Jan 04, 2015 at 14:45

Sunday, Jan 04, 2015 at 14:45
Gday.
Why is Australia so expensive?

We have to pay huge taxes to for the up keep of our over paid, lazy, incompetent, childish, lying etc, etc, etc government and their on going superannuation etc even after they are unemployable!

Also...because retailers need to put prices up because they aren't making enough sales to pay overheads and the above taxes, because people are spending their money overseas in places like Japan and ebay instead of buying localy...........

Not to mention, we aren't prepared to work for $2 a day like Ms Reinhardt thinks we should, while the Gov lets her bring in labour from over seas because she cant get AUSTRALIAS ore out quick enough, and flog it off overseas so she can become the richest person in the world.........

Any way I cant afford to travel the world as well as Australia so didn't really know Australia's such a bad place??? LOL

Did I mention about selling farms off to overseas countries and starting free trade with so they can use there own labour and send their produce home without paying tax on it? Probably not but that's another debate again..........

Any way........Im on holidays (in Australia) so Im going to grab a beer, clean the pool, have a swim and get ready to go fishing.......LOL

Cheers
AnswerID: 543724

Follow Up By: Boobook2 - Sunday, Jan 04, 2015 at 15:15

Sunday, Jan 04, 2015 at 15:15
Hairy (NT) replied:
SNIP

"Also...because retailers need to put prices up because they aren't making enough sales to pay overheads and the above taxes, because people are spending their money overseas in places like Japan and ebay instead of buying locally..........."

Hairy I think you have it the wrong way around. People shopping overseas and on websites is an effect, not the cause. It carries risks and can be more inconvenient than shopping locally but the cost of not doing so is enormous.

I have no idea where the system here breaks down, but it does.

I recall buying a new cooktop, an Induction cooktop. The price was carefully managed here as all shops had exactly the same price and told me that they weren't allowed to discount ( I thought that was Illegal). $3995 in every store.

Same part number same product in the UK worked out to be $850 or thereabouts including delivery to Australia. This brand isn't alone either.

I called the local office of the manufacturer and was told that if I imported it there was no warranty ( that is also Illegal from a manufacturer). I explained that I wouldn't require a warranty because I could buy the unit and 3 spares and still have a couple of hundred bucks change over the local price.

Now there may be add on costs here and all sorts of excuses. But There is at least $3200 or more in margin that is going somewhere. I'll bet I pay more for freight for one unit than they do when they import by the container load too.

It is beyond any reasonable logic IMHO. The manufacturer response is to block Australian web browsers.

Here is an eye opener. Get a free browser add on called Hola. It makes a VPN it it looks like you are shopping fron US, HK, Britain, or about 100 other countries. Chek the prices of stuff overseas with that turned on.

When there is a genuine reason for additional prices that is fair. For example I ALWAYS buy Diesel and some food if necessary at local service stations in remote areas even though it may be up to 80cpl more to support them. That is still a good deal in my mind.

But $2800 for Adobe in Australia compared to using the VPN above and paying $499 USD when both are electronic downloads and from the same server same disk drive in the US is nothing other than a rip off. They Deserve to be pirated IMHO. Same with apple and movies.
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FollowupID: 830757

Follow Up By: Hairy (NT) - Sunday, Jan 04, 2015 at 15:32

Sunday, Jan 04, 2015 at 15:32
Its a bit like the chicken and the egg thing really.....people bought online for convenience now they have to because of price.....maybe?

But the majority I blame on a greedy and incompetent government.......they carry on about sustainable businesses yet the biggest most expensive, non sustainable cost to this country are themselves and need to fund it by massive taxes etc.
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FollowupID: 830760

Follow Up By: Michael H9 - Sunday, Jan 04, 2015 at 17:04

Sunday, Jan 04, 2015 at 17:04
Our taxes are quite low compared to some other countries. Friends in France seem to pay a lot more percentage wise. The gst in a lot of other countries is 20% as well. I think a lot of the problem stems from having a large land mass with a small population. Providing the infrastructure therefore costs more per capita, economies of scale mean higher prices. As far as the rest of the world is concerned, we are living at Cameron Corner with the corresponding price scale associated with isolation and low population.
Complaining about incompetent government is a complaint against the majority of us. We choose and elect the government and also do the firing. Perhaps the voters need to lift their game? Personally I would rather give my money to a government that is elected than give it to the likes of Rupert, Gina or any robber baron that will bank it overseas. Government money belongs to us and is used on public infrastructure. Even government waste ends up in a multitude of different Australian pockets.
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FollowupID: 830771

Follow Up By: Boobook2 - Friday, Jan 09, 2015 at 13:41

Friday, Jan 09, 2015 at 13:41
LOL Australia isn't the only country to have lower taxes than France, Literally EVERY COUNTRY has lower taxes than France. It is hardly a comparison with a typical productive country. France is last in the list for competitiveness, tax rate, union control etc etc. I'll never forget when 50 or so merchant merchant bankers parked their Ferraris outside the bank when they went of strike because they had to work 35 hour weeks.

As an aside, the tax and union situation has got so bad ( 75% income tax, 66% payroll tax and best of all is the fact that it's illegal to work more than 35 hours a week in France even if the employee wants to. These were brought in to ensure all work is distributed evenly amongst all workers. Problem is that even French companies got the hell out of France and now unemployment has gone sky high.

Lets try to benchmark against a higher standard than rick bottom please. I suspect Australia looks cheap next to France.
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FollowupID: 831092

Follow Up By: Michael H9 - Friday, Jan 09, 2015 at 14:37

Friday, Jan 09, 2015 at 14:37
This report is typical of many I have read that puts Australia at the bottom of OECD countries tax burden.


http://comparativetaxation.treasury.gov.au/content/report/html/05_Chapter_3.asp

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FollowupID: 831095

Reply By: Ron N - Sunday, Jan 04, 2015 at 21:36

Sunday, Jan 04, 2015 at 21:36
There's about 7 reasons why Australia is so dear to buy stuff in.

1. The cost of land is astronomical, and the rents are likewise. If you knew what the rents were in many shops, you'd gag. On top of that, many big landlords insist on the shopowner handing over sales results monthly. Any increase in sales means a corresponding increase in rent.

2. Buying power (or lack of it). An American retailer orders some pliers, he orders 150,000 at a time. One of our retailers here orders 2000 pliers, and hopes he can quit them all before a cheaper brand takes precedence. Naturally, the bloke ordering 150,000 pliers gets an 80% discount on the buy price.

3. Population. We have so many towns where the population is counted in the low hundreds. We have a total of 5 cities/regions with more than 500,000 population. America, Europe, and Japan each have hundreds of cities with more than 1M population.

4. Distance. Everything we get has to travel vast distances to reach us. Across the worlds biggest oceans, and then around the worlds 4th largest continent. Then that freight is handled by some of the most expensive freighting methods around. Wharfies get exceptional pay, and still don't work too hard.

5. The "Australia Tax" bestowed on us by overseas sellers. It's well known overseas, that Australia is a wealthy country. Overseas sellers charge us accordingly. We travelled through Europe a couple of years ago, and the instant people found out we were Australian, we got, "Ahhhh! Australia! VERY rich country!".

6. Company mergers, takeovers, scheming and paper-shuffling shenanigans that basically enrich the corporate set. It all costs us individually, it's added to everything we buy. If Gina's old man hadn't driven some pegs in the ground and signed some sharp paperwork that delivers his daughter multiple tens of millions annually (tax-free, because the Hancock Family Trust still operates!), then the money that Gina claims is rightfully hers, would be flowing to every Australian, and we wouldn't even have a Budget deficit! Gina would have to work for a living just like the rest of us, instead of claiming to be Australian Mining Royalty.

7. We also have too big a Public Service for the size of our nation. It needs to be pared down and deliver better service at less cost to the Nation. There's a lot of Govt Depts we'd never miss.

Cheers, Ron.
AnswerID: 543753

Follow Up By: Steve - Sunday, Jan 04, 2015 at 23:02

Sunday, Jan 04, 2015 at 23:02
Turkeys and Christmas come to mind for that last para, Ron. Never going to happen, maddening as it is.
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FollowupID: 830793

Follow Up By: Member - Mfewster(SA) - Monday, Jan 05, 2015 at 08:47

Monday, Jan 05, 2015 at 08:47
Can't agree re the last para Ron, but too complex to try to argue properly here. But I sure agree that the Public service is duplicated. We need to get rid of State governments. Having State and Fed governments and Public Services is incredibly inefficient. It also leads to endless disputes, huge lawyer's fees and massive extra costs on services. But Australians get very small town minded when this is raised. Can you imagine the fear campaign in WA, for starters, if this was ever seriously on the table.
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FollowupID: 830800

Reply By: Bigfish - Monday, Jan 05, 2015 at 08:42

Monday, Jan 05, 2015 at 08:42
I,m just glad that Australia has some of the finest politicians in the world looking out for the people and land that is Australia. Selfless, honest, intelligent, caring and philanthropists the lot of them.

God bless them all....







Well I,m off to get another batch of snake oil ready............................
AnswerID: 543768

Reply By: Member - Beatit (QLD) - Monday, Jan 05, 2015 at 09:47

Monday, Jan 05, 2015 at 09:47
Last year I had reasons to buy a surgical loupe (you know the funny long glasses that surgeons wear) there was nothing under $800 in Australia and most were closer to $2,000. An international supplier based in HK supplied a pair out of Australia for just under $200. They are excellent delivered in a day and it highlighted why I needed to shop better.

Some may say I'm selfish but I feel no more so than big business and Government. Recently I went on a family day out to Newport Beach and as a non local was blown away by the $12 M2 costs and around $14 for parking at the beach, it made me realise that a cheap day at the beach is longer that and everyone wants a cut. Very sad!
AnswerID: 543775

Reply By: swampfox - Monday, Jan 05, 2015 at 20:37

Monday, Jan 05, 2015 at 20:37
hello,
I have been waitn for a thread like this ...
Way way past whinning but here are some facts
Owned a business after 12 years
Eaton hydraulic pumps were 550-650 US$ at the time from an industrial mower provider .
Eaton Aust REQUESTED $ 2500 each , I needed 4 ha ha ha ha ha ha . Yes I still have the email.
30-40% price rise in parts is very common or nil stock and when the part arrives 30% dearer than quoted
Radiator hoses diesel nil stock

The parts in Australia can be 5-7 year old when purchasing .I was caught with a plastic item cracked bad at 12mths old
Had a multi v belt 80 hrs stuffed shredded no warranty joke all others have LASTED 400-500HRS
Dealers in USA are told do not sell out of your zone or overseas
The brand I am thinking of has a dealer price structure for the usa and alternate one for overseas

The big importers /dealers drive the prices
Why do they come to Aust u ask ??? doh NO COMPETITION
Small market but very profitable

This is why overheads are high for small business . The wages were only a minor problem
at 5000-10,000 for a container not a big cost on 5000--10,000 parts oh look freight is a dollar per item

SICK OF BEING GOUGHED /SCREWED
Importing from overseas I am all for it

SWAMP FOX
AnswerID: 543802

Follow Up By: Michael H9 - Tuesday, Jan 06, 2015 at 07:55

Tuesday, Jan 06, 2015 at 07:55
I know importers that have done their shirts. It's a tough game, especially in areas like fashion. For every product they make a killing on there are a dozen they have to give away. The game is changing though because of the internet. We can all be single item importers now and take advantage of buying from markets that have extremely high product turnovers and therefore much lower prices.
People need to realize that places like the US have lower wages, lower overheads and higher turnover. Therefore they can run a lower margin, sometimes a lot lower. It's very common now for high turnover items to only be marked up around 4%. That's why some ultra cheap shops charge you 1% extra for using a credit card. Their margin is that slim they can't afford to eat into it with bank charges. This means the shop buys it at $100 and sells it at $104. A shop in a non high turnover area would need to sell the same item for around $175 to stay open. The second shop is labelled a rip off. The result is that the second shop will close and the first shop can't afford to operate in the low turnover area, so those living in the low turnover area lose their shop and have to either buy online or travel. This is happening on a global scale. The US shop isn't going to open a branch here, sell at US prices and make a killing, it would go broke.
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FollowupID: 830862

Follow Up By: AlbyNSW - Tuesday, Jan 06, 2015 at 08:11

Tuesday, Jan 06, 2015 at 08:11
Michael from your comments I can tell you have seen it from the Vendor side of the fence and agree with you 100%
It is not a gravyfest being in business in most sectors in Australia and you have to compare prices in context when comparing with other countries and their economies.
Why don't some Aussies go and sell product in places like Monaco, they would make a killing selling at Aussie prices there

People have to remember that buying online from OS means that there has been no warehousing and internal freight costs, no shopfront to run with wages etc, no Aust tax structure to comply with etc or statutory warranty to wear either. Plus they have to pay for the stock up front
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FollowupID: 830863

Follow Up By: Boobook2 - Tuesday, Jan 06, 2015 at 08:29

Tuesday, Jan 06, 2015 at 08:29
I hear what you are both saying but that should account for what 10, 15 or even 20% mark up. So how is it that things are 2 - 3 times the price of overseas. That is a 300 to 500% mark up.

It not just faceless websites either. Go shopping in Ginza, one of the worlds's most expensive shopping areas, or in the outer areas of Malaysia. They are all significantly cheaper than here ( Like 1/2 to 1/3 the price). Or why is it that Australian Crayfish is about half the price in HK as it is here.

There is something else at play.
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FollowupID: 830864

Follow Up By: swampfox - Tuesday, Jan 06, 2015 at 08:30

Tuesday, Jan 06, 2015 at 08:30
HI
As a former business owner i will never belittle some one for making profit . I do understand that in Australia the profit margin on low volume
items has to be higher than 4%.
I comment on the mechanical side as i have had 35 yrs of experience
The mechanical industry is an absolute joke.
The margin on parts is HUGE for the importer
The markup on diesel parts is a just a plane ripoff.
An example of the importer mentality is u must buy a new engine compared to repairing the old unit
eg small capacity kubota cyl heads are 3 x the price of the Usa
I purchased a fully dressed cyl head and all other major components to fully recondition at a third of the cost of local .

BRIGGS AND STRATTON 500% MARKUP FOR VANGUARD PISTON ASSEMBLIES retail usa to retail ozy

The importers do buy cheaper than the usa retail to start with .

Freight is not the expense ripping people a new one is

swampfox
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FollowupID: 830865

Follow Up By: swampfox - Tuesday, Jan 06, 2015 at 09:11

Tuesday, Jan 06, 2015 at 09:11
HI
Another diesel rippoff
Briggs and Stratton vanguard Diesel 3cyl
crankshaft USA retail $450usd ,
Aust dealer buy cost 1,000 ozzy from importer
Aust Retail $2,000 ozzy

This is just taking to u with a big stick and beating u senseless

On a side note the diesels that briggs r selling are Diahatsu and as we all know they are owned by Toyota
Briggs Aust has some of the worst cust service i have experienced in 35 yrs .
***** At there cost for parts it should be gold plated ****
Yes like most of us paying extra is ok but when u get ZERO CUST SERVICE PRICES BECOME PAINFULL

Swampfox

Ps not trying to ambush thread but some companies do need to be exposed .

Ozzys r to forgiving and except the treatment dished out by these companies


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FollowupID: 830873

Reply By: Member - Matt M - Wednesday, Jan 07, 2015 at 10:18

Wednesday, Jan 07, 2015 at 10:18
This is a little bit tongue in cheek, but only a little bit:

17 Outrageous Examples Of Rip Off Australia
AnswerID: 543853

Follow Up By: TomH - Wednesday, Jan 07, 2015 at 16:47

Wednesday, Jan 07, 2015 at 16:47
That is a paste up of stuff ups on pricing tickets and they have been on the net for a while.

The Banana Boat one is a typo as is the rack of lollies.
Not our fault about UPS pricing either Its as bad to NZ.

Maybe you get 4 M& M's for the $.

The reason Americans are obese is perfectly shown in the Maccas pic.
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FollowupID: 830979

Reply By: Member - Scott M (NSW) - Wednesday, Jan 07, 2015 at 15:34

Wednesday, Jan 07, 2015 at 15:34
Another interesting article today in the SMH around how geo-blocking affects local prices - fairly relevant.

http://www.smh.com.au/comment/netflix-apple-adobe-how-geoblocks-rip-you-off-20150106-12i74u.html
AnswerID: 543868

Follow Up By: Slow one - Wednesday, Jan 07, 2015 at 15:44

Wednesday, Jan 07, 2015 at 15:44
Scott,
good post. Thanks for that.
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FollowupID: 830968

Follow Up By: Member - Scott M (NSW) - Wednesday, Jan 07, 2015 at 16:18

Wednesday, Jan 07, 2015 at 16:18
Slow one - thought this was relevant...

"Submissions to the Parliament's 2013 information technology inquiry found music was typically 67 per cent more expensive than for customers in the US, games were 61 per cent more expensive and e-books 13 per cent more expensive. Professional software was 49 per cent more expensive and hardware 26 per cent more expensive.

Apple, Adobe and Microsoft refused to take part in the inquiry and so were summonsed – forced to appear. They tried to muddy the waters by talking about the GST, which can only explain a portion of the differences and isn't applied to many internet purchases in any event.

The unacknowledged reason they charge Australians more is because they can. It's called price discrimination and it's one of the most effective ways of turning a profit. The method is to find a group of customers not particularly resistant to high prices (in this case Australians), isolate them and charge them a premium."
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FollowupID: 830975

Follow Up By: Boobook2 - Thursday, Jan 08, 2015 at 11:22

Thursday, Jan 08, 2015 at 11:22
Scott I love the Adobe CEO's response to that inquiry.

He was asked to confirm that the US version of CS6 was exactly the same as the Australian version. He said yes.

Then he was asked why Australians are asked to pay $3949 vs $2500 ( aud at the time) , an increase of $1400. Reminding him that you could fly to LA buy the product and return for less.

He said the Australian web site was nicer, and a better user experience while buying and that justified $1400 extra for exactly the same downloaded software.

I'll take the crappy US site that seems to be ok for the rest of the world and save the $1400 thanks

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FollowupID: 831029

Reply By: JR - Thursday, Jan 08, 2015 at 09:00

Thursday, Jan 08, 2015 at 09:00
No one has mentioned the problem with consumer laws. We have the toughest in the world and that costs money directly and indirectly by companies will only play here if they are making plenty.
If you import something, you are liable for any problems and consequential damages
Largely on goods under $40 K
Great for consumers but very big risk for resellers.

We also have a swamp of labelling and Aus standards to meet which vary slightly to US or EU ones. Means often they need to produce australian packaging or even product.

Next issue is volume, big companies often dont get paid by smaller customers or credit companies or get screwed by exchange rates.
Doesnt excuse gouging but all adds to having to make big profits or not doing business here
Whether and how fast you get paid is a big deal. Massively affects pricing. If a company can sell 2000 items to single customer with bank letter of credit ( ie you pay upfront) its worth 10,000 sales with normal credit setup.

Regardig distributors charging big profits they are taking plenty of risk. Warehouse and freight in Aus is absurdly expensive. Cost more to truck a container 500km inside Aus than to bring it from other side of USA.

I deal with big US companies often and they really dont care if they are in Australia or not, sell more through single local diealer than here. The get paid fast, no risk, cheap freight, deal done under one set of laws. They dont have to offer support or warranty much.

They offer cheaper prices there with some reason.
It is a big issue to them when US dealer decides to drop product into Australia direct. That sale has no warranty support, no backup and can badly damage their brand if things go wrong.
Mostly we stand to loose more than they do if they pull out or local distributor dissapears

Im talking large value imported products, probably not the things you can buy on internet.

Im not supporting massive price margins but we enjoy jobs and safe products and purchasing protection its going to cost. Geoblocking is a bit like globalisation, carbon taxes and free trade, all great if everyones on the same playing field and we sure arent.
AnswerID: 543913

Reply By: Slow one - Thursday, Jan 08, 2015 at 13:43

Thursday, Jan 08, 2015 at 13:43
Having read all of this and analysed the input data at great length, I have found what is wrong with Australia.

Nobody loves us any more.
AnswerID: 543920

Reply By: The Landy - Thursday, Jan 08, 2015 at 16:22

Thursday, Jan 08, 2015 at 16:22
I found this thread interesting, much of it has been driven by impact on the hip pocket, and fair enough, it is your money and therefore you’re right to determine how and where it is spent. And to be fair, that is what the thread is about…

Much focus has been on the fact that foreign goods are cheaper, and in many cases there is a good reason for this, cheaper labour has produced it. In other instances goods made by foreign multi-national companies are offered for sale in different countries at varying prices, despite a fact that often the goods are produced in the same factory.

Apart from travelling the Outback, now there is something that is really good about Australia, I do a reasonable amount of mountaineering and have a requirement for varying pieces of equipment and apparel. Some of it is quite specialised and you buy the best you can afford.

Recently I needed to purchase a new sleeping bag for ultra-high mountaineering (above 7,000 metres) and there are some obvious makers of quality equipment. North Face is one that comes to mind, as it is tried, proven and tested. Of course the downside is the price differentiation between Australia and elsewhere. For this reason I avoid supporting them, unless there is not an alternative.

Anyway, a good news story for Australia

One Planet, which is a Melbourne based company, produces excellent equipment including sleeping bags. It is a manufacturing company that employs 30 people in Australia and mostly all work is undertaken here, although it concedes some product is made overseas.

I have a number of the company’s products and did not hesitate to speak to the company, in fact, the owner Andrew King, outlining I needed a specialist sleeping bag. The upshot is he is making a bag of a higher specification than The North Face equivalent and equivalent in price to The North Face’s US price catalogue!

Here is a company that manufacturers and employs locally highlighting it is possible to carve out a niche if you can offer something more than just an item at a price! I’m happy to support companies like this, even if there is a higher cost – sometimes things can’t just be measured in dollar terms!

PS: This isn't an advertisement for One Planet - just thought it is worth highlighting there are good Australian companies making quality products at fair prices...

Cheers, Baz – The Landy
AnswerID: 543932

Reply By: Alan S (WA) - Thursday, Jan 08, 2015 at 16:33

Thursday, Jan 08, 2015 at 16:33
BooBook

I have been watching this thread for a few days to see where it goes, but i think there is another aspect to consider.

Yes all of it is true that our costs of doing business are higher than many other places in the world, our wages are higher, isolation, and lack of competiness/ volume does effect the costs. And we are are probably conditioned to pay more, may be because we earn more?

But what do we do about it, Online shopping has certainly enabled us to buy cheaper and to become more aware of the world wide value of things.

A lot of items that are imported are supplied through a distrubution chain, manuafcturer or importer selling to a distrubution network in australia. Then the end seller adds a mark up to sell to you and me. Most of the reasons above for excessive pricing is recovered by the importer not the reseller.
In many cases depending on industry and individual product the end seller is only making a small markup. But in the big picture there is probably more people employed at this level of the supply chain.

By directly importing ourselves to save a few dollars what are we doing to our own economy?, are we punishing businesses that for reasons that they are unable to address. I guess it does depend on individual products or industries as well.

What i try to do now is use the Online pricing as a guide and depending on the item and amount i am then prepared to pay more. I also find that telling the endseller what you can get if for online often can get you a discount, and in some cases pressure from the end seller back to the importer may assist in price reductions long term.

Alan
AnswerID: 543933

Follow Up By: Boobook2 - Thursday, Jan 08, 2015 at 17:37

Thursday, Jan 08, 2015 at 17:37
Alan I too have been wondering where to go from here.

It is clear that there are a lot of people who have had enough, and a lot who have either experienced the higher costs and or believe that Australia has unique issues.

It is also clear that the Australian government are not capable of fixing it.

What is evident to me is that no reasonable 'on costs' could contribute to several hundred percent markup.

Some manufacturers seem to maintain almost identical pricing across the world. ( Samsung, Apple) etc.

I think every time we buy something overseas because of a 10% or more price difference, or find an overseas website blocking delivery to Australia, we should send an email to the distributor in Australia telling them that they lost a sale due to high pricing. Ether they will ignore it, try to fix it, if it is a supplier issue, address their greed if it is their issue or make noise to the government if is genuinely is a cost if business issue.

Let them know.

Anyway that's what I intend to do from now. A petition style website would be good but I certainly don't have time or motivation for that.

Also I believe the 10% GST should apply to all imported goods, regardless of value. That would shut that false argument from the likes of Gerry Harvey down.




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FollowupID: 831053

Follow Up By: Alan S (WA) - Thursday, Jan 08, 2015 at 22:19

Thursday, Jan 08, 2015 at 22:19
Booboo
Unfortunately in most cases the several hundred percent markup usually occurs offshore, so there is little the government can actually do, except in the case of dumping, which is the opposite issue.

I am not so sure the 10% gst threshold will change much anyway but I think people should consider this as part of making a buying decision.
I also think people forget the service provided by local business that often out ways the price difference. I would actually say you probably want to use a 20% price difference to use as a comparison.

Also what is not considered is local service, I can get it now, if I am unsure of the part I can get assistance in determining what I want, and if doesn't fit I can take it back.
buy it on line and although you can return it you loose any price advantage.
Alan
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Follow Up By: Boobook2 - Friday, Jan 09, 2015 at 08:41

Friday, Jan 09, 2015 at 08:41
Alana,

I dunno about Australian service. Apart from a few big retailers, and exceptions of course the service is often pretty bad. The onus falls back on you to prove a problem and push hard.

I have been stunned by the service I have had on ebay from no name chinese suppliers in somewhere in China. Generally they will do anything to protect their feedback score. Much more than most Australian retailers will do.

I would say without any shadow of a doubt that buying off ebay is as good as service can get.

I have many great service stories but my favorite is some seller in China sold me a mini PABX for $60 inc postage. ( it was about $350 here). They accidentally shipped a 110V one. I complained and they said send it back. I went to the Post office and was quoted $70 to post it. ( HUH? I bought it with postage for $60, and just postage in return was MORE - another example). Anyway I sent them an email telling them it wasn't worth sending back so they said take a photo of the 110V sticker on the box and throw it away. I did so and 5 days later I got the right one.

Less argument and hassle except for maybe Myer or David Jones.



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FollowupID: 831072

Follow Up By: Alan S (WA) - Friday, Jan 09, 2015 at 11:20

Friday, Jan 09, 2015 at 11:20
Boobook

I to have many success stories, as well as some failures when buying online. I also have many success and failures when buying locally.
I also don't have a poor view of local buisness services. I dont shop at Myer or David Jones often anyway. Over the years I have had some excellence service, notibly Nissan warranty service (which will surpirse many doubters).
One main advantage of buying locally is that you can touch, feel and see the item. Recently i had to get a new cutter pulley for my ride on, i have in the past used the part numbers and ordered from the states to some success. However as i needed it virtually straight away and i didn't think 1 pulley would justify the freight cost, i went to my local shop. Gave them the part number and got the item. Unfortunately it didn't fit, one of those rares occasisons where the part book was wrong and had the wrong part number for my model. The local shop took it back, looked at the old part, identified it and got me the correct part.
Had i ordered on line i dont know what would have happened as it was really my fault as i ordered by part number. I now go to that shop.
I bought clothing online, 9 times out of 10 no probelms, I stuffed up once on sizing, went through the return process got the correct size. At the end of the exercise I probably didn't save much.
Buy locally you can try it on.
Many local businesses do give good service, yet we tar all with the bad image when we justify buying overseas, and use the good examples of overseas suppliers as evidence to support the view that all overseas suppliers give good service.
As i mentioned in my first post most of any so called gouging in many cases occurs by the importer or foreign manufacturer selling into the country. yet by bypassing local sellers to get it cheaper overseas we punish business that are unable to do anything about it as well as damaging our own local economy.
Our countries economic success has given us high wages, a good standard of live comparative with the rest of the world, and if the price of this is that we have to pay a bit more i am not complaining.

Alan
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FollowupID: 831081

Reply By: Michael H9 - Friday, Jan 09, 2015 at 08:04

Friday, Jan 09, 2015 at 08:04
What concerns me a lot is that we are getting hit on essentials yet luxury items have dropped in price. Food seems to cost more here than in say, Europe or the US. I know the farmers aren't getting it, so it has to be the big retailers. We all have to eat so we are a captive market with few alternatives. Importing your own food isn't really an option. Then you see that a whopping big lcd tv is only $600. The price of things is out of whack.
AnswerID: 543958

Follow Up By: Bludge - Friday, Jan 09, 2015 at 12:30

Friday, Jan 09, 2015 at 12:30
Totally agree Michael,

Big retailers are a major issues along with shopping centre cost.

The Harvey Norman franchise model is a great example of on costing to the consumer.

It has been hard to do, but I have reduced my spend in the Coles/Woolies supermarkets.

I buy local, that includes meats and have found a paddock to plate butcher, to avoid paying or helping to pay the Halhal scam. (another compounding tax or sorts and another story).

With local veggies and fruit that last so much longer than supermarket GM/Gasses/waxed pulp. It takes effort to do this. The benefit is food that taste like it should and last well.

Is it cheaper? Well no, but the money is going to the farmer not the corporation.
TonyV

Cairns FNQ.

Member
My Profile  My Position  Send Message

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FollowupID: 831087

Reply By: The Landy - Friday, Jan 09, 2015 at 13:20

Friday, Jan 09, 2015 at 13:20
One should exercise some caution making direct comparisons to the cost of food overseas vs. costs in Australia.

In many cases overseas the cost of production and supply is heavily subsidised by the government...

Cheers, Baz - The Landy
AnswerID: 543980

Follow Up By: Boobook2 - Friday, Jan 09, 2015 at 13:46

Friday, Jan 09, 2015 at 13:46
While that is true, and there are exceptions everywhere. Like Australia subsidises growing flood crops like Cotton and Rice in near desert conditions, I guess these are the exceptions in the developed world Baz.

It certainly doesn't explain how you can get live Australian Lobster or Abalone at a restaurant in HK cheaper than at the Market here.
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FollowupID: 831094

Follow Up By: Boobook2 - Friday, Jan 09, 2015 at 15:09

Friday, Jan 09, 2015 at 15:09
I guess there are the kind if exceptions in the developed world Baz

LOL I love this site's user interface - NOT
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FollowupID: 831097

Follow Up By: Nargun51 - Friday, Jan 09, 2015 at 16:16

Friday, Jan 09, 2015 at 16:16
And in doing comparisons of food costs, take into consideration such things as minimum wages, median wages, disposable incomes, taxation rates, health care costs and other associated factors.

What may seem cheap for a traveller may cost prohibitive amounts for someone actually living there and being paid their rates of pay.
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FollowupID: 831100

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