Australia: land of the price-gouge

Last month, I completed a figurative journey I reckon I started more than 20 years ago, when I landed for the first time in America in 1990, a brief stop in New York City on my way to London, after a splendid New Year at Copacabana beach in Rio de Janiero.

After witnessing Chile’s joy in throwing off a military dictatorship in its first elections for nearly two decades, I found myself examining civilisation in the land of the free and comparing it with Australia’s (and Chile’s).

In New York in January, the ice is a foot high in the gutter and, in 1990, my impression was that it wasn’t a particularly welcoming place. One of the things that stuck with me was that the price of everything wasn’t actually the price: there were always undeclared extras, whether it was an airline ticket or a restaurant meal. It seemed I was constantly on the lookout for sharp practices.

“I hope this never comes to Australia,” I thought to myself, knowing that American trends inevitably migrated Down Under. In the meantime, there was the reality that every dollar of mine was worth not much more than half a dollar in New York City.

Having returned to the States a number of times since, and having lived there for six months in 2007, I eventually adjusted to the fact that even now there’s an undeclared sales tax of 10 per cent or so on top of the price of everything.

However, what shocked me when I returned there for less than a fortnight last month was that, when it comes to the cost of everything, America now has the type of economy Australia had 20 years ago, while price-gouging for daily purchases in Australia in my experience has become monstrous.

For Australians, America has become a shopper’s paradise – and not just because of the strength of the Australian dollar. In American retailing, there is competition almost everywhere and, now that the country is struggling out of a recession, I saw an almost total absence of price-gouging.

At the biggest local supermarket, oranges and bananas are around $2 a kilogram, steak starts at around $12 a kilogram, chicken pieces are under $2 a kilogram and a six-pack of beer is around $6.

At Target, I went on an el cheapo spree and bought Levi jeans and slacks for $20 a pair and, at Walmart, the same for a good-quality pair of slip-on shoes. In Australia, the no-name brands are at least 50 per cent dearer.

And we haven’t even started discussing wishlists. I can understand why more and more Australian online shoppers are buying everything from computers to whitegoods, clothes and sports gear overseas.

Even though fares to the US are on the rise again, with the $1000 return specials disappearing in the past few months in favour of starting rates of around $1500 return, a week or two in America can still be a profitable shopping expedition, even if you have to ship it home separately with 10 per cent GST and 5 per cent customs duty on top (as I’ve done with golf clubs).

In my opinion, Australia has become the world capital for anti-competitive rackets, whether it’s airports, supermarkets, banks or retailing, even though successive Australian governments have been exemplary in their promotion of policies that have made air travel incredibly cheap. But I reckon the rest of the economy has become close to a laughing stock of toothless window-dressing by watchdogs such as the Australian Competition and Consumer Commission.

In one of many recent gloomy media releases, the Tourism and Transport Forum (TTF) last week despaired that spending by international holiday visitors has dropped 15 per cent in the past two years, even though the number of visitors is increasing.

At the same time, the TTF complains that there are now more than a million more Australians leaving the country than there are visitors arriving per year.

I’d suggest that many visitors to Australia have stopped anything but essential spending because they quickly learn what a hellishly expensive place it is – a fact already discovered by those of us who live here, more and more of whom are holidaying somewhere, anywhere else.

Have you found, as I have, that it’s cheaper to live overseas than in Australia? Have you worked out an inexpensive way to holiday in Australia? Do you have favourite low-cost holidays overseas?