The great Aussie rip-off

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By Leith van Onselen

On Friday night, I caught up with two old mates in the Melbourne CBD. Working from home these days, and having two young kids, I don’t venture into the city much anymore, let alone go to bars or dinner. So Friday’s activities were a rare event.

After blowing $30 each on a very basic Chinese meal including one beer, we attended a run-of-the mill bar in the centre of town, where we each bought a round of beers. On my turn, I was shocked to find that three stubbies of Heinekan set me back $30. After forking-out $10 a beer, I didn’t feel much like drinking anymore; and besides, I was knackered after a long week of writing at MB. So just after 10pm, we called it quits and I caught a cab to my home in Melbourne’s Eastern Suburbs.

My tally for this quiet night out was as follows:

  • train ride to city ~$4;
  • basic Chinese meal with one beer $30;
  • three beers $30;
  • cab ride home $28.

So, all up, just over $90 for a couple hours catching-up with some old mates, including a basic dinner, four beers, and transport. No drunkenness. No extravagance.

To say that Australia is an expensive place to live is an understatement. We already know housing costs in this country are a disgrace. And we each see it every time we venture out, whether it be paying $18 for a movie ticket, $8 to $10 for an over-priced drink in town, or a meal at a restaurant. Now there is proof.

Earlier this month, Deutsche Bank released its annual “Mapping the world prices” report, which is a simple survey of prices and price indices of a wide array of goods and services from around the world, with data gleaned directly from prices posted on the internet or from sources that have collated data. This year’s survey found that “Australia and Japan are very expensive across a wide range of products while the United States is generally the cheapest developed country”. And according to the report’s author, Deutsche Bank global strategist Sanjeev Sanyal, “in Australia’s case it is massively more expensive on most goods and services”.

It should be noted that while Australia ranks poorly on most goods and services, it does score one win with the cost of basic health insurance coverage is just over 0ne-third of the cost in the US; albeit it is still higher than every other country in the sample (see next chart).

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Full report below.

Deutsche Bank Random Walk Mapping Prices 2013

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. reusachtigeMEMBER

    Another reason why I am a proud crashnik. Only financial collapse will bring prices down. Sad but true.

    • In the 90’s Geelong bitter cost 14 cents to make. We had $10 all you could drink or 50c pots or $1 pots or free happy hours… what happened? lol.

      Someone is milking that $9.xx.

    • This thread demonstrates ultimately, why Australians are losers.

      You pay these prices, and other than shelter and a handful of items, you’re not compelled to buy them.

      Exercise your consumer pressure, DO NOT buy.. ANYTHING.

      Bring it down, watch it crumble before your eyes. The $$$ message is the strongest of all,

      ‘We do not accept those prices’.

      ..but alas, I am wasting my time.

  2. The tables make little sense, Australia consistently listed at the top, but other countries on each table have higher costs. What gives?

    That said, it is damn expensive here and I rather expect we’ll see a lot of SMEs go the wall when the economy hits the skids

  3. Working from home these days, and having two young kids

    You and me both mate, but you need a few more years practice at being a total tight arse before you can really budget.

    A cab ride?! Sheesh! I haven’t been in a cab for 10 years!
    $18 for a movie? Tuesdays, only see movies on Tuesdays.
    Beer? bar? What’s that?

    • I’m the professor of tight arse. Been shopping at Aldi for ten years. Go to the movies maybe three times a year (usually use Movie Money). Never buy coffee out (make at home). Cook home meals. Etc.

      The cab ride was a once-off as I missed my train and had a 30 min wait. It was also raining, so didn’t want to get wet walking from the station home (8 mins walk).

      • no need to be a tight arse to shop at Aldi.I never look at the price tags and Aldi is by far my favorite shop, I cannot stand too much choice, It s exhausting to have to choose between 30 tomato sauces when you only want a good one, Aldi has only one, I find Aldi very relaxing.
        furthermore their product has not artificial coloring, knowing the side effect of them on kids brain, I happy to shop at Aldi just for that.

        and I love specials πŸ˜‰

      • GunnamattaMEMBER

        ‘Working from home these days, and having two young kids’

        That has come to reflect me of late (2 kids as of December). We are seriously thinking of going back to Moscow (which usually rates near top of worlds most expensive cities) on grounds it would be so much more economically viable.

        Movie ticket there circa 5 bucks. Bottle of coke is 1. Metro trip circa 30 cents. Gypsy cabs always peanuts. Then there is kids trips/outings

      • Shopping at Aldi? Home made cofee and meals?
        Sheer “lookshoory”! When I was a wee one I lived in a shoe. Now I live in a box and dream of home made meals and coffee!

    • Cab ride? I Walk/ ride the bike.
      $18 for a movie ticket? I only have the net. If it ain’t playing on the net, it doesn’t exist.
      Beer?? Agree, what’s that?

      Saw organic avocado’s “on sale” at Coles the other day: $4.90ea

      $4.90

      EACH

    • For cinema lovers everywhere…

      With Hoyts and Village you can go buy vouchers on their website for use. This brings down the price to around $13 per ticket.

      With Palace, you can get a $13 movie club card which entitles you to a $12 movie any day.

      If you have credit card rewards points, or an Entertainment book, or go with Red Energy you can get cinema tickets even cheaper.

      No-one should pay full price for cinema tickets anymore.

      • Or Optus, or Telstra, or… it seems like the last minute “let’s go see a movie (and pay $18)” crowd are getting suckered for opportunity cost.

        • ..or a bit torrent site. Might a little coincidental that Australian are some of the biggest downloaders of pirated content given the fact we pay some of the highest prices.

  4. What I don’t understand is why people appear happy and almost proud to pay so much for everything. It seems to be a kind of validation of success to pay top dollar for what the rest of the world considers to be a base model BMW 3 series, or to put a couple of hundred dollars through the pokies when out.

    While I’m at it, when did everyone in Aust get tattoos? I didn’t know anyone with tattoos when I left Aust a decade ago!

      • My friend is starting to specialise after finishing his med degree. I’m pushing him to move towards dermatology and tattoo removal. I just see future rivers of gold when I look around the streets of Melbourne.

          • The important word there is trend. Trends come and go so when the tattoo craze is over they’ll be looking to clean up. At least the visible ones. As my Dad would say ‘Never get a tattoo where a Judge can see it.’

    • I don’t understand it either. It seems like some people really enjoy being ripped.

      Bar prices are out of control at the moment.

      • I was worried that 10 pounds would not cover a pint and soft drink in a UK pub, was shocked when I got over 5 pound back in change!

  5. As a stupid seppo, the most stupid thing that I have ever done financially was to move to Australia. (Hits self repeatedly.)

    • Mining BoganMEMBER

      It could be worse. You could have gone to Canadia and been in the same situation, only colder.

        • Mining BoganMEMBER

          You know what’s annoying? Back whan I was young and grotty and used to backpack the world, it used to really annoy those nice Canadians that we would call Canada Canadia.

          Now they do it themselves. No fun anywhere anymore. πŸ™

          • ps- I really do like Canadians. Gross overgeneralisation, but compared to Americans I found their character more generous and polite, their humour better and accent less “biting”. Lovely country. Though there was little that could have prepared my for the extreme cold of a clear, windy (-35c) degree day in Montreal, or the expansive white desolation of the Winnipeg prairie…

  6. Deus Forex Machina

    Mate – I’m based in bond street in Sydney these days. You should try and by a shout across the road.

    17 bucks for two beers here in Sydney and I go home and that’s 4 beers.

    Vive la Port Stephens!!!

  7. At the risk of stealing PhilBest’s thunder I’m becoming convinced it’s all down to the high land prices – which drive up wages and commercial rents to the point where businesses need to charge obscene prices just to break even.

    Which then drives up wages.. and repeat.

    How do we have such ridiculous prices but no inflation?

    • I think you may find that wages aren’t going up that much. And land prices aren’t part of inflation. Lastly, most Asian restaurants employ people for $7-$10/hour off the books. Perhaps other restaurants are resorting to cheap student labor that matches their style. There was an article about Italian restaurants doing it 1/2 days ago..

    • mine-otour in a china shop

      +1.23456 (I used an excel spreadsheet!)

      Back to basics:

      Stage 1: At the start of the cycle profiteering is also in there, but as costs rise and prices rise, guess what? Demand falls for most things, even services.

      Stage 2: The profiteering is then wiped out later in the cycle as rising costs are driven up and revenue stays static or falls.

      Stage 3: Those who are unable to raise prices any further come under pressure from the banks concerned about cashflow and loan repayments. They quickly close up shop.

      Stage 4: Those that are left to survive are those with low borrowings, innovative selling ideas and the ability to reduce margins. That said their revenues start to dip as those who lost jobs from stage 3 start to reduce demand.

    • An but that $20 beer mentioned above probably came from an upmarket stainless-steel and glass palace. As such the ‘product’ is more valuable, so if we apply hedonic indexation, voila! Low inflation.

      • Mining BoganMEMBER

        Bang on.

        It’s not about the beer. It’s about being seen drinking the beer.

        ‘It’s not about the beer’. Good band name that.

    • hubris_and_hyperbole

      Agree with that theory too mate.

      Had a similar experience to UE a couple of weeks ago. 3 beer shout = $30 as a city bar. FFS!

      Am currently looking for overseas work to escape this sh1t

      • Hubris….head to Czech Rep. 500ml of beer around $1-2, depending on how posh you a pub you seek. Some of the dives are the most interesting though.

        Pay as you leave at many places….so no need to continually wallet dive, and table service!

        Plenty of times I have left a pub and paid for the whole table after a couple of hours drinking…nothing nicer than hearing “25 beers….that comes to $30”. Then again I could go out in Sydney/Melbourne have 3 beers between 5 mates and use straws to ration the precious amber liquid!

        • Mining BoganMEMBER

          Hungary too.

          A fun thing to do that I would recommend is to ride a bicycle from Budapest to Prague. Pretty scenery, pretty people, good exercise and great beer at genuine third world prices.

          Wouldn’t attempt something like that in Oz.

          • MB – Hungary has top wines for a good price as well! So that is 2 food groups covered Beer and Wine. Cycling and outdoors is very well catered for with cycle-ways to ride on and beer-stops ever few kms!

          • Mining BoganMEMBER

            Indeed they do.

            I could live there except for that it gets cold and other countries don’t revere bogans as much as Australia does. πŸ˜‰

          • Budapest winter days bit short but presently green and warm πŸ™‚

            500ml beer (good quality) $1.75
            Duck steak + two wines $17.00
            Villa Buda Hills 3 bedrooms $1200 per month.

            Generally everything 1/4 – 1/3 of Oz prices.

      • hubris, I have been thinking the same thing but what happens when you come back to Australia relatively poorer? I find it hard to get similar wages in my profession overseas, meaning that when I come back I’ll be behind everyone else, so to speak.

    • I’ll avoid arguments about wages, casual rates, casual awards etc. which in the last couple of years have been on the move. Also avoid govt imposed costs of employing people which are really a serious problem.

      However re inflation domestic non-tradable is measured at about 5%(offset by zero tradables). What YOUR inflation is depends on what you buy. However without doubt inflation is much higher than stats record. Examples are here re prices of beers in bars etc but that probably doesn’t register much in the CPI. It’s just high if you inhabit bars.

      However general inflation is very much higher than CPI as well. For example a few months ago for some ‘event’ I bought some ‘Smarties’ It had been quite some time since I’d last tasted them. There was no comparison between the items last time and this time. This time it had a thick coating of fairly tasteless but sweet candy and a little almost tasteless chocolate inside. Smarties used be really tasty chocolate offset with a thin layer of a tasty candy. In the food industry the Coles/Woolworths dominance has brought about an appalling deterioration in the quality of fruit and vegetables.

      In my own industry I could give numerous examples of this ‘hedoninc inflation’ Steel tubing with thinner walls; waterproofings not as described; fabrics not as described; etc etc etc
      One wonders where the end point of quality deterioration is. It must be close for most items.

  8. of course australia is crazy expensive but do not forget these international comparison are all in US$, if the aussie was at 0.6, the australian cost would rank much better.
    just saying

    • reusachtigeMEMBER

      Sadly, if our $ falls by half it all still costs us the same here regardless, and probably even more due to increased import costs, but the survey will say we’re cheap as.

      • most of the costs are salary/rent/taxes these would not be affected by the tiny portion of the import costs

    • mine-otour in a china shop

      What about the ridiculous prices of some domestic services no affected by exchange rates?

      That really exposes high wages, utilities, raw material costs, insurance and a whole heap of other rip off costs which lead to higher service prices.

      On average I find Australia 25% dearer than UK as a fair 2.0 exchange rate, which rise to about 50-60% dearer when the current exchange rate does come into play. This is an average Basket of goods and services.

      • 25-30% gels with my experience here.

        I paid 20 bucks last week for a chicken caeser pub lunch washed down with a 6 buck pint of lime and soda.

        It was nice, but it wasn’t 17-18 quid nice, the equivalent from say Weatherspoons would be 10-12 quid.

    • When our dollar was half a $US, we payed double for everything. When it equalized, the prices remained as we were so easily gouged. If/when our dollar goes to half a $US again, I expect prices to be doubled again.

      • what I just say is, these comparison are in US$, if our dollar is half, from a US point of view we would be “cheap”.

        • Yeah agreed. I do think Australia is a pretty expensive country but these international comparisons all depend so much of the value of a country’s dollar.

          • Of course that works both ways.

            http://blogs.wsj.com/scene/2012/10/10/asia-becomes-worlds-wealthiest-region/

            The Credit Suisse report concluded that the richest nation in the world remains Switzerland, with an average wealth of $468,000 per adult, seven places ahead of the U.S., where adults have an average of $262,000 to their name.

            Three Asia-Pacific countries cracked the top 10: Australia ranked second, with an average wealth of $355,000 per adult, while Japan ($270,000) and Singapore ($258,000) ranked fifth and eighth, respectively.

    • Fabian AlderseyMEMBER

      The aussie hasn’t been at 0.6 for quite a while. Sure, we can play the “if” game as much as we want. We can also play “what if the aussie was at 2.0”?

      Currently, and for a while now, prices are ridiculous for anyone who visits Australia from overseas.

      • dumb_non_economist

        Prices haven’t just been expensive currently or for a while now. We have been ripped off on almost any item you wish to name for decades. Our housing is a recent addition in the last decade.

        As to being a tight arse, I refuse to pay double for something just because I can afford it. If I don’t need it I don’t buy it, no buying useless crap that sits in the corner gathering dust 2 minutes after you bring it home. When I was a kid money was very tight so the way I see it is I don’t work to put my money into someone else pocket so he/she can drive around in the latest Merc and live in Applecross! I’ll donate to charity before wasting money like that.

      • The beneficial side effect of removing 70 grand V8 utes driven by utter onanists is a benefit which cannot be overstated…

  9. Oh, but our incomes are the highest around and they just keep charging.

    Tracking that can from the cost of production to $10 would be a fascinating exercise.

    • Wholesale is about $1 per can. You would cry if I told you what the cost of production was (excluding shipping.

  10. I regularly go to restaurants where the meal price is between $10 and $20 and they are BYO with a modest corkage fee. A bottle of wine can be bought for as little as $4.

    It’s not possible for a married man with children and commitments to live like a single man with none of that financial baggage, especially if they are on an executive salary.

    • mine-otour in a china shop

      A single man with no financial baggage – do you mean like a young first time buyer who has just bought an apartment at 600k on a 60k salary as it has never been a better time to buy? Or those who are being paralysed by high rents even in share houses, who have little income to spend elsewhere?

      I feel sorry for young people (with or without no financial baggage).

      • hubris_and_hyperbole

        You might get a clean skin for $4 if you buy 6. A bit of a lottery. Some not bad, some poison.

        Mod: lay off PF thanks h and h

        • hubris_and_hyperbole

          Mr Frazer was saying that he can get restuarant food and wine at prices far cheaper than than I have seen. It appears others have doubts as well.

          Why can’t I question how long it has been since he has paid these prices? You seem very hypersensitive.

          • See below. I’m sorry but I don’t know the cheap restaurants in other areas, but it’s always a nice adventure to find them yourself.

            I used to be a food wholesaler and I know a lot of chefs and restaurants – the price on the A la Carte menu is not a guarantee of quality – I’ve been in their cold rooms and there are expensive restaurants that I wouldn’t eat at for more than price alone.

          • …and I used to be a restaurateur, and the money isn’t in the food, as you know, Peter, it’s in the alcohol. Hence Leith’s experience….

          • I don’t wish to offend you Janet, but if the money was in the alcohol then your business model was wrong to begin with.

            You are in Melbourne so you won’t know our restaurants, but the seafood restaurant that I mentioned was started by a family who had previously won awards for their seafood and their restaurants were very expensive. They left that business model and then went with a low cost low rent BYO model and now their place is packed with diners and they make more money with far less stress.

            Fine dining is pretty much dead apart from the few places where they really do offer an exceptional dining experience, and each city can only support a few of those establishments. I don’t mind paying a high price when I get superior service and food, but I won’t pay top prices for a second rate experience.

            We have a lot of second rate bars and restaurants who charge very high prices and offer little in return, so I agree with Leiths points, but there are alternatives if you seek them out.

          • Yes very similar to Ritzy Fish – I know the owners of that establishment as well, say hello to Jose for me the next time that you go.

            They are also very experienced restauranteurs who changed from fine dining to good quality low cost dining. Try Rajah’s at Jindalee for great curries and some wonderful chinese restaurants at Sunnybank in particular.

      • Oh that – Dan Murphys cleanskin “soft red” is about $3.86 and it’s a damn good quaffer – try it sometime.

        A little free “financial advice”

        • Mining BoganMEMBER

          My mum used to get those. I started to regularly send her cases from Margaret River. She can’t go back now. Hooked, she is.

          Her retirement savings may run out a bit earlier now… :p

        • hubris_and_hyperbole

          Am aware of clean skins. As per my comment they can be hit and miss. Need to include price of aspirin if it is a miss.

          Q. Did you think my questioning of your experiences was offensive and required deletion?

          • I understand your point. I have several Chateau Neuf de Pape and some Gigondas in my wine fridge, so I appreciate quality wine, but for casual everyday drinking it is a folly to spend large sums of money on every bottle.

            I would rather spend $10 to $20 per head in a family restaurant where the owner knows me and I get a genuine welcome, than spend a large sum of money on snobbish fine dining, or some trendy place that will be gone in 6 months, but each to their own.

        • You have to pay $8-$9 for a good cleanskin at Dan Murphys. I have never come across a bad one at this price and you would need to pay twice as much for a label of similar quality.

          • Winemakers who have a glut of wine would rather sell the surplus off in a clean skin than cheapen their brand, so a lot of clean skins are actually premium wines in disguise.

            It takes a lot of research to find the right clean skin wines, and I happen to know a lot of very keen wine researchers.

            It’s a tough job but someone has to sacrifice themselves for the betterment of all.

          • Look for margaret river cleanskins, High quality, big glut!
            Avoid anything from SE australia vintage 2011

          • Thanks for the heads up. I have just returned from Margaret River – the vintage was quality but smaller than normal, so the quality of the cleanskins may fall off or the price may rise next year.

          • “The price may rise” – what I live in fear of is the nanny at work: “Alcohol taxes to double after bogans caught fighting in club”..

      • Wife gets Bowlers Run Chardy (Dan M) for less than $3 a bottle. Not bad for a quaff apparently.

      • Fish Lovers Rosalie – family basket $30 and it feeds 6 people, plus some mediterranean salad and Calamari – all up around $45 for 6 people.

        Great little Viet and Asian restaurants around Darra and Inala. Good food if you know where to go and aren’t snobbish.

      • I’ve no idea of it’s name but there is a new Turkish place near me where I can barely move after spending $8.50 on the meal. A big main with large, light side salad. Add a super strength coffee and I’m bloated and buzzing for about $12.
        And I’m happy to eat there because all the staff is family. Nothing is more off putting than seeing miserable, underpaid employees drop your food onto your table.

      • hubris_and_hyperbole

        Actually WN I would like to know where you can get pub meals for $10 these days — other than a bowl of chips etc.

        standard parma seems to be min $20+ in the richmond area. burger and chips $14 …

        • If you’re on Canberra’s north side, The Lakes Golf Club does 2 pizzas for $16. Also there are the usual schnitty and steak nights for $10 at the Golf and Raiders clubs, tappas and a bottle for wine for two for $25 at the local bar etc. Plenty cheaper eats about our area. Outside of this, sadly you’re up for a few quid.

      • A plate of dumplings at a cheaper asian establishment would fit that bill! Just look for an asian restaurant with no white people in it!

  11. Lets stand back for a second and think about why having high prices – both relative to other countries purchasing power and our own real wages – is not just a whinge, but a real brake on economic prosperity.

    A prosperous nation – as opposed to a wealthy nation – would have relatively cheap goods and services.

    i.e everyone could reasonably afford basic necessities and some basic niceties – a few quiet drinks, a good meal, a movie or even an okay car. Healthcare – emergency and basic – would be out of pocket expenses.

    Not, everyone would need to go into debt to pay for all the above. Thats what a wealthy, but hugely indebted country does.

    With higher debts becomes higher debt servicing costs, which begets higher wages, which begets higher prices. This is a vicious circle – not a prosperous one.

    If you hollow out your economy and only have services, whilst squandering (i.e pissing away) the one time benefits – i.e natural resources – you end up with this inflationary spiral, that usually only has one way to go.

    Then you get imbalances where the shrinking middle class can’t afford basic stuffs, so to capture those votes, the politicans of the day say: hey – we’ll pay for that – and then the rest of us who can afford it (out of savings) then has to skimp a little more or go into debt a little more to pay for it. Whilst usually, the higher income folk get away with tax relief or the like.

    These imbalances are not visible – they are talked down and way as just whinging. Meanwhile, private debt grows, provision of public services for those who cant afford higher costs grows, and the gap between the “wealthy” and the “prosperous” grows.

    Almost finished – so as much as we all dont mind the higher wages (no objection to making more money), is this really a sign of prosperity if we have to pay MORE for less/same we got 10 years ago.

    And this cascades into the other problem – with higher prices, higher taxes, higher house prices – where are the savings?

    Sure we have a trillion in super….of which by my calculations approx. 30% is invested directly/indirectly into banks/housing, and a big remainder speculating directly into the share market (which is not a savings or investment pool – check out how much the primary market has raised recently. SFA)

    The actual savings – real capital investment for a prosperous future – wheres that?

    Its getting pissed down a drain when you buy beer for $10 a bottle.

    /rant

    • hubris_and_hyperbole

      agree

      “…you end up with this inflationary spiral”

      which begs the question why the ABS is unable to measure what everyone of us seems to be experiencing. We are told, via official stats, that inflation is low. It almost seems Orwellian.

      • “which begs the question why the ABS is unable to measure what everyone of us seems to be experiencing…”

        IMHO Inflation can only really be measured in terms of lowest price available. If a $1 beer can be found than that is the level that should be used regardless of our willingness on average to spend $15 on the same product. The $15 beer is simply a $1 beer with $14 service / delivery cost.

      • Wage increases that come out of some one else income do not cause inflation! In hospitality earning less than the award has become the norm.
        It beats not having a job!

    • GunnamattaMEMBER

      +100

      But we have never had it so good.

      Although today it would seem the MSM is starting to seriously wake up to economic issues (about 18 months after MB was alerting to issues I would add

      • Mining BoganMEMBER

        Yeah, what’s going on at Fairfax today?

        Have their free coffee and muffins been taken away due to cost?

    • This is a good point, may I raise the example of the Spanish conquistadores – the greatest extraction of wealth to ever occur was from the Spanish gorging themselves on South America during their conquests – Spain became fabulously wealthy, however instead of using that wealth for productive nation building development, they got lazy and just bid the price of everything up – paying hundreds of dollars for a simple apple, because – they had lots of money – until they realised they had spent it all on speculation and they had been robbed.

      Well done Australia – what does $EU1.3 trillion in debt matter when you live in a $million dollar house, well it matters when your house is now only worth $100k no one has a job and you still owe $1.3trillion in Euros, which is now $2.6 trillion Euros because the Chinese have stopped buying our dirt and are flogging off their flats faster than you can say collapse.

      .

      • What? Dutch disease by another name? Excessive liquidity and cultural traits are different things amigo mio.

    • “A prosperous nation – as opposed to a wealthy nation – would have relatively cheap goods and services.”

      And I’m sure we all know at least one person who would grunt when contemplating this commonsense idea.

    • Spot on observations Chris!
      Your note re Super investment ought be framed! Most of it is not ‘saved’.

    • Yes.

      All our growth is in assets and our investment is in pyramids. We don’t make much and just employ each other in service. A hollow economy.

      Part of the problem is the metrics used allow politicians and simple folk to congratulate each other on how rich we are getting buying houses of each other and acumulating debt.

      Although – the reason much of my imports, DVD’s games, books etc cost more is distribution and publishing monopolies. Regional pricing is gouging us hard for exactly the same goods available at half the price overseas.

  12. Well that is why we had 88,000 Oze’s leave last year as economic refugees. Biggest group to go was the 25 to 35 year old professionals, the smartest…..

    • I came back here from NZ and don’t regret it at all.
      After I left the Kiwis decided to elect a former Merchant Banker and his party to run the country through a recession. With exactly the predicted results. It’s not pretty over there.

      • Don’t worry, Australia is just the western island of NZ! Were just a bit slower than them to catch on to things!

  13. mine-otour in a china shop

    If you speak to young people you will find that they too are paralysed by the high costs, particularly their housing costs.

    A lot of them also choose to stay at home, drink a few beers and have a pizza. When I was a student we were not rich but we didn’t have it half as bad with high costs.

    • I remember my First year at Uni in 96, Free beer and BBQ could be found on almost any day of the week!

  14. We went to the movies recently on a Saturday (being pepetual tuesday nighters) and were shocked to discover that the ticket price for each adult was $20! for a normal ticket.

    Not often going to a pub/bar, and being much stricter about dining out (only places where the food justifies the price) I hadn’t realised how expensive it all was

    • Try taking one of your children to an international cricket game! Cost us $80 for 2 for Silver seating at the SCG, $7 for a mid-strength beer, $5 for a dirty ol pie and $5 for chips. Don’t get me started skiing in Australia. Did it once and now avoid with any lame excuse including “no” I’d rather go on a holiday to NZ than spend a weekend at the ski fields.

  15. Not sure that I agree, entertainment expenses and our willingness to pay outrageous amounts for entertainment are the ways that we socially differentiate ourselves.

    Twenty ago I can remember talking to a couple of young female social climbers (gold-diggers) at an expensive Sydney bar. The girls told me that they never drink at a bar where a regular beer costs less than $10 (20 years ago). Their logic was that it a kinda pre-sort mechanism (contender present, pretenders eliminated)

    When I pay over $500 for a bottle of wine, I differentiate myself, maybe it tastes better or maybe I just think it tastes better, either way it is behavior that is expected to be noticed. It is all just part of an elaborate of ranking and ordering system through which our social status is established.

    My unwillingness to pay for $10 a beer, also does not go unnoticed, in many ways this is how we subordinate ourselves socially.

    IMHO it is all part of the elaborate game of life, once absolute necessities are payed for ALL expenses beyond this are simply to establish social ranking.

    There is an interesting area in behavioral finance that looks at the ways in which some investors seem to intentionally select poor investment choices and literally destroy wealth, it is a form of narcissism coupled with a guilt complex, BUT it can be profitably mined by an astute financial adviser.

    • dumb_non_economist

      Gunna, that’s the problem, too many people worried about their “status”. Frankly I couldn’t give a rats arse about status as people who give weight to that generally aren’t my kind of people.

      I tell my daughters not to judge people on where they live or what they earn, but on how they treat others.

    • Astute observations, Bob.

      I think this is why we desperately need social mechanisms for earning, establishing and recognizing status that DON’T revolve around conspicuous consumption.

      My favourite example is the Japan, where the ratio between the wages of top level managers and low level workers is much smaller than in the West. I think a big part of this is because Japan has many, many other traditional mechanisms for acknowledging status — every verb is marked to indicate the relative status of the speaker and the listener, for example.

      • I’ve spent a lot of time in Japan, fascinating people fascinating culture.

        My favorite memory is, when too my surprise, I was taken to point, for misquoting Soren Kierkegaard, I flippantly threw some Existential theory into a bar room BS session. I had no idea how much the Japanese people respect and admire Kierkegaard, so it was a real eye-opener, a genuine glimpse at some real cultural foundations and a chance to understand Bushido, from a western framework.

      • ” every verb is marked to indicate the relative status of the speaker and the listener”

        but isnt it just formality/etiquette based on the age of the person?

  16. it s not all bad, at least here prices are high but that s because we have cash to spend (businesses charge these prices because they can ), I still have friends in spain and france, it s quite sad there, they would dream having our purchasing power,

  17. I recently went to Germany and bought a bunch of toiletries. Below is a comparison of the prices to AUS:

    AUD EUR EUR -> AUD %
    Tooth floss 3.78 1.45 1.83 106.90
    Shower gel 2.50 0.65 0.82 205.25
    Lip balm 3.30 0.75 0.95 249.21
    Tooth brush 3.38 1.15 1.45 133.26
    Tooth paste 1.00 0.55 0.69 44.30
    Gilette Mach 3 29.95 14.95 18.84 59.00
    Shaving crème 11.75 1.99 2.51 368.61

    The % column is the price comparison and all of the products are way more expensive in AUS. Overall the basket is roughly double the price.

  18. God I am so depressed, should have known better to click on and read the article and the comments. Terribly accurate, how can we be so dumb?

  19. $92?

    One of the $99 MacroBusiness donations should cover it then, you can use mine with seven bucks left over for a couple of coffees to ease the hangover. πŸ™‚

  20. I went to Stratco a fortnight ago to buy two meters of colour bond steel bar fence with a gate. It set me back $700 and I am still waiting for it. Last week I asked a carpenter for a quote to build a verandah (a few columns and a laserlight roof). The quotation was for $12K.

  21. innocent bystander

    I am only in Melbourne every so often. Sydney at least once a year. For eating out I find them both cheap compared to Perth.

    • +100

      Perth is by FAR the biggest rip-off capital city in Australia. Crap service, poor choices and very average food.

      Appalling.

  22. my local club has $10 beer and burger whilst you watch the NRL. Pretty happy with that. The beer is a schooner as well.

    • Here in Woodend you can buy a decent meal from the menu quite a few choices including a beer or a wine for only $15.00 mid week (Zarbys) we havent had a dodgy meal in fact they have all been good quality.

  23. Here in West Perth steak sandwich $23-28 (not more than 100gr) plus 1/2 kg of grass and 1/2kg of fries included. The steak reminds me on Charlie Chaplin’s “Gold Rush”. Couldn’t think about beer at all. They’re gonna start to sell tap water soon. Of course +40C inside because aircon didn’t work (in February). They call it business lunch. What a joke!

  24. I’ve blogged this before, but W.T.H. : Vegamite:
    http://www.mysupermarket.co.uk/tesco-price-comparison/jam_and_spreads/kraft_vegemite_220g.html
    In the UK at $1.33 per 100grams.

    Also available to mugs in your street at : $1.71 per 100 grams:
    http://www2.woolworthsonline.com.au/?gclid=CM7Qiafv37YCFWVKpgoddToA7A#url=/Shop/ProductDetails%3FStockcode%3D274334%26name%3Dkraft-vegemite%26search%3Dvegamite

    I assume the shippers pay us for the privilage of freighting it..
    As far as drinking out is concerned, a group called Wetherspoons started out in the UK as the pub equivalent of ALDI. They imported Polish beer (and very good it is too, try Zywiec) and sold it at just above cost, they also do a variety of good beers more cheaply than anyone else. They’ve cleaned up in most cities. Now, if we can remove penalty rates (cue howls from Left) , someone will grab this market and you too will be able to afford a beer at the pub..

  25. Well this is what you get as a result of real estate prices going up.

    So lets all support lower interest rates so that we can pay more for everything as a result of real estate prices and debt going up.

  26. High cost or real estate = high prices, it has a flow on affect

    So now we reap the rewards of house prices doubling every 7 years…

  27. Forrest GumpMEMBER

    $10.00 a beer is right. Considering the businessman needs to pay:
    the barman $25 an hour (plus super),
    pay Payroll tax,
    Public Liab insurance,
    workers comp,
    liquor license,
    hire a 6′ Tongan bouncer as a doorman,
    a cleaner,
    an accountant to do the BAS and tax return,
    Then pay the rent/mortgage
    Repay the bank (business loan)
    And hopefully make a profit.

    • It all goes back to land prices.

      the barman $25 an hour (plus super),

      Who sets his wages partly determined by having to access shelter, in Australia, the highest priced in the world.

      pay Payroll tax,
      Public Liab insurance,
      workers comp,
      liquor license,
      hire a 6β€² Tongan bouncer as a doorman,

      Who sets his wages partly determined by having to access shelter, in Australia, the highest priced in the world

      a cleaner,

      Who sets his wages partly determined by having to access shelter, in Australia, the highest priced in the world

      an accountant to do the BAS and tax return,

      Who sets his wages partly determined by having to access shelter, in Australia, the highest priced in the world.

      Then pay the rent/mortgage

      The actual cost of the highest priced shelter in the world.

      Repay the bank (business loan)
      And hopefully make a profit.

      The BCA cheered the bubble on the way up, don’t blame the low paid bouncers or bar staff, where were the BCA in all of this, supposedly looking after ‘longterm business interests’.

      has anyone looked at Heather Ridout and stated the obvious in ‘you really don’t know what’s going on do you?’

  28. OH, and one of the stand out indicators!

    In Japan there are 100 yen stores where everything (just about ) really is 100 yen. I used love that- when in need of a retail pick me up it could be accomplished for very little damage. These shops still exisit, and at the same price point (thank you deflation).
    They are now opening up several here in OZ. How much for each of those items? $2.80 Given that the yen is about 100 yen to the dollar right not, that is a hell of a mark up, especially when the vast majority of the stuff is shipped from China.
    I know it comes upon the expensive list- but Japan is my cheap holiday destination!

    • We were in Tokyo last year and loved it, it was actually cheaper to eat out than it is in Melbourne and the transport/subway is awesome we didnt have to wait more than a minute 3 minutes for a train, one time we didnt pay enough for the subway and the counter attendant just let us go through and we didnt have to pay the balance, the place was so clean you could eat your dinner on the road and the people were extremely friendly. We never did see one single policeman either.

  29. In the two small children camp and had a once a year babysitter last Saturday night. Went to Indian restaurant I’ve been going to for 15 years. Two entrees, one main and a bottle of mineral water – 90 dollars. We were horrified. It’s not the cheapest Indian in Sydney but really? It was also full and couldn’t get a seat until 9pm.
    Ten years ago, banquet used to be $27 for very generous serves.

  30. The train fare is ok, but there’s also the additional cost of paying for MYKI.

    I think you overpaid for the meal. In Melbourne you can get a very decent, authentic Chinese meal for around $10, just check out the cheap eats guide.

    The alcohol costs sound about right when going out, although you could get a couple of 6 packs for that price. Your cab fees don’t seem too bad. I was in Brisbane last weekend and got slugged over $50 for a 10km trip.

  31. High prices are a direct result of a) High fuel costs b) High property cost!

    The same thing happened in Japan…. just before their property bubble burst!

    read.bi/106ZrrD

  32. regrading Melbournes high prices, we were in Louisville (Kentucky, USA) and me and the wife went to a sports bar,had 5 games of ten pin bowling, a 2 course meal each with drinks, and around 8-10 alcoholic drinks each, we were also asked if we would like to buy any marijuana as we walked out the door and we got a taxi to the hotel all at a cost of 91usd. the games of bowling were 2.50usd incl shoes and no we didnt buy any marijuana the guy could have been a cop for all we know.

  33. I live in Switzerland now (supposedly very expensive) and can buy 500ml German beer for 80 cents at the supermarket, and a bottle of wine for $5, & Ozzie wine cheaper than at home. Australian prices seem to have gone bananas.