Australia’s parliament to question Apple, others on pricing

“Apple Inc has been ordered to appear before Australia’s parliament with fellow technology giants Microsoft Inc and Adobe Systems Inc to explain why local consumers pay so much for their products, despite the strong Aussie dollar,” Rob Taylor reports for Reuters

“Broadening a row between the world’s most valuable company and Australian lawmakers over corporate taxes paid on Apple’s operations, Apple executives were formally summonsed on Monday to front a parliamentary committee in Canberra on March 22,” Taylor reports. “‘In what’s probably the first time anywhere in the world, these IT firms are now being summonsed by the Australian parliament to explain why they price their products so much higher in Australia compared to the United States,’ said ruling Labor government MP Ed Husic, who helped set up the committee.”

Taylor reports, “High local prices and soaring cost-of-living bills for basic services are hurting the popularity of the minority Labor government ahead of a Sept. 14 election it is widely tipped to lose, giving political momentum to the inquiry.”

“Husic took aim at Apple last week over local taxes paid by the company, telling parliament that Apple generated A$6 billion in revenue in Australia in 2011, but paid only A$40 million in tax – less than one percent of turnover,” Taylor reports. “‘While they generated A$6 billion in revenue, they apparently racked up from what I understand A$5.5 billion in costs. How?’ Husic said. ‘They do not manufacture here. They have no factories here.'”

Read more in the full article here.

MacDailyNews Take: We’d hazard a guess that Apple’s not breaking any tax laws. Rather than trying to score cheap political points, Husic might glean more insight simply by reading and understanding Australia’s current laws.

25 Comments

  1. Forget cheap political points! Prices for Apple products that are closer to those in the U.S. would be fan-bloody-tastic, not to mention f-a-r too long coming.

    Re tax – ALL big companies avoid paying tax where possible. It’s only normal people who can’t get out of it.

    1. Most Australians seem to forget the 10% gst when thinking Apple is overpricing things.

      That A$539 iPad is actually A$490 + $49 tax. So its not overpriced at all. (Apple also does have Aus expenses and must hedge somewhat against exchange rate changes).

  2. If you do not like the tax laws, change them. Don’t haul company executives in to ask them the insanely stupid question, “Why are you following the tax laws as written?”

  3. The pricing doesn’t seem that different compared to US (according to the example given here.
    The tax question is different. 10% margins in Aussie seem very low since Apple reported ~25% overall margins.
    Of course if the tax authority have issue with that they should audit them.

  4. MDN has a pretty good take. Countries that have lots of extra taxes, custom taxes, and internal regulations that cost extra money, have higher prices on its products.

    Brazil has such super high import taxes that Apple is actually assembling there to avoid paying them.

    Politicians should actually read and understand their own tax and regulatory structure before bitching to companies about how they have to deal with the country.

    Just a thought.

    1. ‘Politicians should actually read and understand their own tax and regulatory structure before bitching…..’
      ROTFLOL

      *sigh*

      ROTFLOL

      Thanks for that, it relieved a lot of pent-up frustration. :-/

    2. If you openly share that Apple / Foxconn is building iDevices in Brazil here on this blog, that revelation may be used to educate the talking heads who still to date have no idea what Apple is doing around the world. They also have no idea where Apple is building their next billion dollar server farms. Apple has shared only 4 locations and has been developing solar and fuel cell technology in NC. NC has 2 water sources and 2 electrical sources (one is nuclear). So, you may ask, where is Apple going to need the solar and fuel cells? Maybe where power is unstable? Parts of Africa, Russia, Asia, South America, … Will Apple need lots of local server farms for their next big thing? Streaming TV? Video conferencing?

      Don’t tell the clueless talking heads until it is over and Apple has a server farm on every continent!

  5. It doesn’t matter if Apple’s not breaking any tax laws MDN, true blue Anustralians have a so called “healthy disrespect for the law” so unless Apple employees are all American there will be something going on. Corruption is as rampant and woven into their culture as much as their racial hatred is.

    I find this ironic, because the cons of the land levied such high taxes against imports so that they could develop and promote locally manufactured electronic goods. Optima was one of the spearhead companies, (http://www.optima.com.au/).

    The more recent insulation fiasco is just another example of what you can do with a single IQ digit mentality, but as they say down under “sheila be white” or something to that effect. They never really learn how to ennunciate properly, it all comes out as a mumble. At any rate there is a very good reason that Apple has no factories down under, although I do have to say how impressed I have been by the mining industry. Mind you keeping Anustralians deeper than 6 feet under (a lot deeper in metric) sure must be the right incentive for them.

    I find it especially amusing and ironic how a so called local salesperson tried to convince me that it would be cheaper for me to buy a Mac in Australia so that I could bring it back to the States with me. This was after telling him that I wasn’t an American.

    Anustralia is just trying to pull a David Einhorn and con all the money they can from Apple and other LOUD MOUTH YANK, uh American companies. It’s not unlike the Buzzle situation (http://en.wikipedia.org/wiki/Buzzle). At the end of the day, it really doesn’t matter if Apple is acting legally or no, it’s just another reeanctment of the Battle of Brisbane and the LOUD MOUTH YANKS uh Apple, will lose and subsequently be fined. You can ical it, November 26-27 thereabouts.

    1. You idiot. Australia us ranked higher than the USA on the transparency scale and so us regarded internationally as LESS corrupt: http://www.transparency.org/cpi2012/results
      The two incidents you refer to are firstly an individual government botched policy made worse by individual business people trying to make a quick buck and secondly a company going broke with outstanding debts. This happens all around the world.
      “Sheila be white” is not an Australian expression, you are perhaps confounding the phrase “she’ll be right” which is just a slang way of saying “everything will be alright” which probably hasn’t been in frequent use for 50 years by most Australians.
      Back on topic, the main focus should be on companies like Adobe and Microsoft who charge Australians a multiple of US prices for downloaded software which carries no or little additional cost to the supplier.
      As for the market, it has spoken with intelligent Australians using the usual means to pretend to be purchasing from a US IP address.

    2. I’m guessing that you, Road Warrior, are one of the arrogant, loud mouth yanks that us Australians have no time for and would no doubt make your compatriots cringe with your ignorant ill-considered diatribe.

      1. As I said in my original post in my post I am not an American but I won’t try to convince you that I am otherwise, I’ve never succeeded at turning off an Anustralian’s LOUD MOUTH YANK hatred once it gets going.

        I guess that’s part of how you make Americans look good. Thank you for proving my point about Anustralian ignorance, oi oi oink.

  6. Price differences are often quoted between the US and the UK, but what is frequently, and conveniently, forgotten when this comes up, is that US prices usually don’t include tax, as taxes are set at state, rather than national level, which is almost certainly the case in Oz. this is just political point scoring.

  7. Mr. Husic answered his own question. “… ‘They do not manufacture here. They have no factories here.’”

    Anywhere in the world, shipping costs and import fees, taxes, etc., add to the cost of anything sold anywhere… and since all of those costs will vary from country to country, so will the prices of whatever is being sold.

  8. This is political grandstanding. If everyone is honest, the exchange would go something like this:

    “Why are your prices so high?”

    “Because lots of people are willing to pay them.”

    “Oh.”

  9. The price difference of Apple hardware between the U.S. and Australia is negligible. Music prices are dictated not by Apple but by the international music cartels.

    The main culprit for obscene price gouging is Adobe. You would expect that a download copy Photoshop to be basically the same price anywhere, however the Australian price is a magnitude greater than the U.S. price, in many cases close to double. Adobe offers dubious claims of localised support costs but the last time I checked there was a UK English dictionary but no Australian dictionary in Adobe software. Also call centre support is provided by foreign centres. It’s the likes of Adobe that are the criminals here.

    I suspect when apple points out why their prices are only modestly higher taking into account local taxes, it will put the likes of Adobe into a very difficult position defending the indefensible.

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