Apple’s Australia Tax

After the release of the iPhone 4S, Apple takes flak for its jacked up Australian prices

As procrastinators all over the country hurry to lodge before the 2011 tax return deadline (31 October – don’t forget!), there was news earlier this week of a so-called “Australia Tax” on Apple products. But this is one tax you won’t be paying to the Australian tax office.

Before headlines became dominated with the news that one of the great innovators of our time, Steve Jobs, was dead, Apple came under fire for the so-called “Australia Tax,” a hike in prices on their products that they impose on customers down under. New South Wales Fair Trading Minister Anthony Roberts took advantage of the launch of the Apple iPhone 4S to criticize the technology giant’s treatment of Aussie customers.

He accused Apple of “gouging” Australian customers and even threatened action at the federal level if the company doesn’t take steps to correct the “Australia Tax.” Roberts claimed that given the recent performance of the Australian dollar, there’s no reason to hit Aussie’s with higher prices: “With the Australian dollar having spent many months well above or close to parity with the U.S. dollar, it has become increasingly obvious that Australian consumers are getting short shrift in regards to the pricing of many Apple products.”

Just to give you an idea of how much more Australians are being charged, the new 16 GB Apple iPhone 4S will go on sale in Australia on 14 October for $799. Americans can purchase the same product for $210, if they sign up for a two year contract with a service provider. And the price disparity doesn’t just affect products in the Apple shops of Australia. Australians get hit with the “Australia Tax” when it comes to digital downloads too. Because registering for overseas sites often requires a credit card and address in that country, Australians have to put up with limited options and higher prices. Some music downloads from the iTunes stores, for example, can cost Australians up to 60% more than their American counterparts. And Apple isn’t the only company that’s been called out. Adobe too has been criticized for unfairly jacking up prices on Aussies.

Companies like Apple have often cited transportation costs as the reason for higher prices. But with the cost of digital downloads almost zero, not to mention uniform around the world, it’s hard to justify the grossly inflated prices Aussies pay. It’s also hard to imagine shipping costs for physical products like the iPhone being that much greater. Surely these products, which are largely being assembled in China, can make their way to Australia for a lot less money than halfway around the world to the United States. Apple has already reduced the price of apps in the Australian apps store, but Roberts warned that if Apple doesn’t do more to correct the Australia Tax it might experience a backlash, as customers move their business to a growing number of competitors.

But for now, it seems, the Australia Tax isn’t going anywhere. And those of you who are ready to run out and snatch up an iPhone 4S are just going to have to grin and bear it.

Photo via TerryJohnston on Flickr.