Certain goods and services in Australia are unnecessarily expensive and we are all overpaying everyday.
To borrow a colloquialism from Prime Minister Kevin Rudd, Aussies are not getting “a fair shake of the sauce bottle” when it comes to unavoidable expenses – food, a roof over our heads and fuel for the motor. Below is my list of 8 things that Aussie consumers pay too much for. No doubt there are more things that could be included.
1. Broadband
Image: 1
Broadband speeds are slow in Australia compared to overseas. For example, the Japanese have download speeds of 160 Mbps while the South Koreans already enjoy 100 Mbps and plan to boost broadband speeds to 1 gigabit per second by 2012! However, this isn’t the case in Australia as research earlier this year showed we are probably not even getting the slow speeds we pay for. Arrrggh! The fastest download speeds advertised are supposed to be up to 30Mbps – which is fast to be sure. Such a service for home users costs $69.95 per month plus setup costs and of course you will need to be in a metro area to get that speed.
2. Bank Fees
Miss a payment of your credit card and you’ll get smacked down with late payment of over $30. Want to lodge a foreign currency cheque into your account and it’ll cost you $20 – $30. Wire money overseas to a friend or relatives’ bank account then expect to pay around $40. Go into overdraft on your transaction account and the banks will typically charge you close to $40. Need to use your bank debit card overseas and expect to see a fee plus a percentage of the transaction value on your statement. Use your bank card at a rival bank ATM and you will probably cop a $2 fee. The list goes on! This year the big Australian banks generate $5 Billion solely from banking fees and charges.
3. The Cost of Renting
Image: 1
Don’t get me wrong, renting is good. But renting a house or unit in Australia is not cheap. To hi-light the plight of renters, earlier in 2009 during the drama of the global financial crisis the RBA made interest rate cuts it actually became cheaper to pay the repayments on a mortgage than was to rent in some suburbs of the major cities. What kind of situation is it, where renting or buying a house is at parity? The current average weekly rent for houses in Sydney is $450 per week (up from $390 a year ago) a rise of 15.4% year-on-year. The average weekly rent for units or apartments is currently hovering around $410 per week (up from $380 a year ago) which is a rise of 7.9% year-on-year (data).
4. House Prices
Image: 1
Australia’s cities may be considered among the most liveable in the world, yet Sydney, Melbourne, Adelaide, Brisbane and Perth are all among the most expensive to live in. Amongst the list of contributing factors to the steep price of houses in the big cities, expensive living coast and the high average house prices push the affordability of houses beyond the reach of many working people, many of whom service the cities; i.e. nurses, ambo’s, firies and policemen. When you consider that the median cost of a house in Sydney is $570,000 and its $450,000 in Melbourne you begin to sense the frustration that people have. Simply put, houses are overpriced and Australians are paying too much for them.
5. Petrol Prices
Refueling your vehicle is an expensive prospect and over the years there’s been fair bit of debate, angst and media attention in response to rising petrol prices. And, rightly so, Aussies repeatedly are overpaying for petrol unleaded, premium and diesel. In 1999, the national average for unleaded petrol was only 70 cents Image: AAA. In 2008, unleaded rose to highs of $1.50+ per litre. Today its around $1.15 but its on the increase yet again. Worse still is that the cost of petrol always ’seems’ to climb just in time for bank holiday weekends and Christmas holidays just as more people are hitting the road and driving further than the usual commute. Its called ‘holiday gouging’. If you want a little bit of justice, you can dob in petrol stations who hike the prices using the Road Tube website. BTW: One good ‘money hack’ on this one – buy a car that uses an alternative fuel such as LPG fuel which is consistently cheaper (45 – 55 cpl) and fluctuates far less compared to unleaded petrol, premium and diesel.
6. Airport Car Parking
Image: 1
There are 4,300 car parking spaces available for passengers and staff at Sydney Airport to help service the 30 million passengers who travel through the airport each year. However, you should know that airport car parks such as Sydney’s short term and long term parking lots are big business. The ACCC revealed that airport parking from Australia top 5 cities, Sydney, Melbourne, Brisbane, Perth and Adelaide generate around a quarter billion dollars per year – which is staggering. Park in short term parking for long enough to collect a friend from an arriving flight (i.e. one hour) and it’ll cost you around $14. Melbourne Airport extort charge $12 while its $10 in Brisbane, around $5 in Perth and $4 in Adelaide. Long term parking is also expensive. Park long enough for a day return business trip and pay $25 in Melbourne and Brisbane, $24 Sydney, $20 in Adelaide and $17 in Perth.
7. Convenience Food
Image: 1
Aussies pay a high price for convenience! Compare the cost of 2 litre bottle of Coca Cola Coke in a service station to the supermarket price. The supermarkets charge around $3.59 but expect to pay $5.75 in the petrol station for the same thing – that’s 60% more. Again, compare the cost of the service station pie (sometimes called a ‘maggot bag’) to a superior but humble bakery pie. Expect to pay about $3.60 at the servo for that pie compared to the $2.50 than you would for a fresh bakery pie. Now that is the cost of convenience.
8. Restaurants
We all assume tap water is something we are entitled to in a restaurant. However this can be overlooked if you are pressured into ordering something. The first thing you are usually asked in a restaurant is whether you would like water or not. Howard from EatShowAndTell recommends that we don’t fall into the waiter trap if he or she asks you “Would you like still or sparkling water?”. If you don’t want to be ripped off for paying for the water, ask for tap water instead as it is free of charge. We all know we can get a 1.5 litre bottle of still (mineral water) in Woolies for less than half the price of it at restaurants, don’t fall for the trap and don’t feel embarrassed to ask for tap water because we are entitled to it.
9. Cinema
Who doesn’t love watching movies? To be honest I love going to the local Greater Union for a decent movie. The seats are clean, the cinema is well looked after and service is usually very good. However, going to the movies as 2 adults and 2 kids, will set you back a massive $57 before you get near the candy bar where drinks and popcorn and a packet of chocolates will easily increase the charge to a whopping $90. Book online and get charged a $4 booking fee! Going out to the cinema is far from cheap!
You can ripped off all the time, but when it comes to credit cards, bank accounts, personal loans and insurance be sure to look online for the best deals. Compare the market before committing.
Bonus: 10. Mutual Fund Expenses
Many Aussies pay too much in mutual fund expenses. Use more efficient investment vehicals, such as index funds or ETFs, instead. Here is a good ETF screener to get you started.
Share This:
Mark is one of the personal finance writers for Money Hacker where he blogs about everything from