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​Review recommends measures to reduce 'Australia Tax'

A government review into competition policy has suggested dropping parallel import restrictions and geoblocking limitations to give Australians access to cheaper prices.

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Image by Claire L. Evans, CC BY-ND 2.0

A review into Australia's competition policies has recommended a number of measures to eradicate the so-called 'Australia Tax' on products such as software, digital music downloads and hardware.

The Draft Report of the Harper Competition Review covers a range of competition issues, including product pricing, supermarket competition and retail trading hours, and includes a review of parallel import regulations in Australia.

According to the report, parallel import restrictions "benefit local producers by shielding them from international competition" but they are also "an implicit tax on Australian consumers and businesses".

The Harper Review has recommended abolishing the remaining restrictions on parallel imports, noting that while Australians were once limited in how they could purchase products such as software or music, the realities of modern retail are changing.

"The impact of changing technology and shifting consumer purchasing practices...means that some of these restrictions are easily circumvented," the report noted. "However, the removal of remaining parallel import restrictions would promote competition and potentially deliver lower prices for many consumer goods."

Alongside the easing of these restrictions, the Harper Review has also sided with findings from the IT Pricing inquiry calling for the dropping of geoblocks, thereby "ensuring that consumers are able to take legal steps to circumvent attempts to prevent their accessing cheaper legitimate goods".

Consumer advocacy group Choice has welcomed the review and the moves to drop what it calls the "Australia Tax" on software, hardware and digital content -- according to Choice CEO Alan Kirkland, the report "has a real potential to benefit consumers" in the form of cheaper prices.

We provided evidence [to the Harper Competition Review] of the significantly higher prices Australians pay for identical products, ranging from new release movies, games and TV series to clothing and cosmetics.

The review has responded with support for market solutions to empower consumers and help them beat the 'Australia tax'.

This includes exposing industries to greater competition from overseas, for example by reforming intellectual property laws, removing restrictions on parallel importing and giving Australians the confidence to get around barriers, like online geoblocking, that keep local prices high.

Submissions on the Harper Competition Review Draft Report are now being accepted until November 17, 2014.