Why are things so expensive in Australia?

Not so long ago, most of the necessities of life were pretty cheap in these parts. A trip overseas meant haemorrhaging money and then returning with a debt to make your grandchildren’s embryos blanch. Now all that’s reversed, for visitors here, returnees from long voyages on the seven seas, and home dwellers all know that we pay among the highest prices on the planet – even surpassing Norway for many things.

Why? Many theories have been put forth:

1. Transport costs. This is crap, since transport covers about 7% of costs, as I am told by a recently retired head honcho in the world’s largest shipping firm.

2. Taxes. Nope. The goods and services tax is a measly 10%. This hardly explains the 100% markup (and more) on many goods from overseas. For instance, I can buy my favourite (and only) pair of shoes at less than half the price on the internet than in the local shoe shop.

3. High wages. True enough to some extent, since Australia has one of the highest average wages in the world, and a decent minimum wage. Hence the high cost of coffee, restaurant meals and so forth. But it still doesn’t explain everything, like those shoes.

4. High dollar. We’ve slaughtered the US dollar, the Euro, the pound. Great when you are on the road, but now it supposedly pushes up prices here. Not sure I can see how that obtuse argument works, for does it not push down the price of anything you buy overseas?

5. What transnational company executives think Australians will pay. There seems to be a bit more in this one. Music, software, computers, mobile phones … the list is long indeed. They all cost more here relative to prices overseas. Why? Because people keep paying for the damn things at the prices listed. Infamously, there is some software that costs more here than the airfare overseas and its purchase price somewhere else combined. Since some idiot will pay for it, the companies charge it.

That said, being a somewhat stingy bastard, I can say it is possible to live very cheaply indeed in the land of Oz. Less than $50 per week is no problem at all.


4 thoughts on “Why are things so expensive in Australia?

  1. $50 assuming you don’t have to pay rent and don’t include the odd medical, costs, etc? Transport costs – let me guess – don’t own a car and cycle everywhere?

  2. Go on – give us a breakdown of the food you eat in a week, with costs. This is what blogging was designed for!

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