The New Daily

Why is everything in Australia SO expensive?

Anyone who has travelled overseas, or shopped online, will have first-hand knowledge of just how much more Australians pay for everything from electronics to cosmetics. But why, exactly, is this the case?

Empty pockets

Wage growth has fallen to a 17-year low. Photo: Shutterstock

By almost any measure, Australia is one of the costliest places on the planet.

The Economist Intelligence Unit’s (EUI) global cost-of-living survey, which compares 131 cities using New York as its baseline, ranks Sydney as the fifth and Melbourne as the sixth most expensive on places earth. That’s pricier than Tokyo, Geneva and Copenhagen. Brisbane and Perth are tied for 21st spot.

Thanks to the declining Australian dollar, we have fallen down the cost-of-living rankings a little this year – but our nation is still a very expensive one.

According to the latest data from Numbeo, a global database on living conditions, the cost of renting in Australia is 26 per cent higher than New Zealand and 36 per cent higher than the US. And Americans can stock their cupboards for 21 per cent less, and Kiwis for seven per cent less, than it costs us here.

So why, exactly, is Australia so pricey?



In his submission to the Senate Inquiry into Housing Affordability, Saul Eslake, chief economist at Bank of America Merrill Lynch Australia, blamed government policies such as negative gearing for inflating residential property prices while failing to promote the construction of new houses. This, in turn, had forced aspiring first-home buyers on to the sidelines.

Mr Eslake told The New Daily that Australia’s highly urbanised population was a further contributing factor.

Almost two-thirds of us choose to live in cities of over a million people – the highest proportion of any population in the advanced world after Hong Kong and Singapore – for which we pay a premium, he said.

Our concentration around the coast and our preference for relatively large houses on sizeable blocks of land were further contributing factors, he added.


Australians pay more than their fair share for technology and online entertainment because of geo-blocking, a policy that restricts our access to content based on geographic location. In other words, big companies charge us more because they can.

Tom Godfrey, head of media at consumer group CHOICE, said this frustrating reality means we often pay hefty mark-ups on products and downloadable content from companies like Apple, Microsoft and Amazon.

Australian consumers pay an average of 52 per cent more for iTunes music, 50 per cent more for PC games, 41 per cent more for computer hardware, and 34 per cent more for software compared with consumers in the USA, according to CHOICE research.

Thankfully, geoblocks can be circumvented. Third-party delivery services like Bendigo-based company Price USA allow you to buy products direct from America at local prices. Virtual private networks (VPNs) can also be used to open up Netflix, HBO and US iTunes accounts, which are usually blocked in Australia.


Cosmetics and colognes

Australians are also paying a high price for beauty.

We splash out a premium for big brand cosmetics. For example, the Revlon Colourstay Ultimate Suede Lipstick costs $25.95 at David Jones, whereas in Walmart in the US the price is as low as $7.89 (not including US sales tax), according to a recent CHOICE report.

For men, the popular Giorgio Acqua Di Gio Essenza cologne (75ml) cost $125 at Myer, but only $68.53 at Nordstrom in the US (not including sales tax), CHOICE found.


The tyranny of distance

When you read these figures, you could be forgiven for thinking that local retailers are ripping us off.

But part of the reason that Australians pay higher prices on retail goods can be explained by our distance from the rest of the world, Mr Eslake said.

Transport costs, and the need to stock greater quantities of products in case they run out, are both factors that drive up the price of cosmetics, colognes and many other foreign-made products.

Higher wages

The comparatively high hourly rates paid to Australian workers is another reason why we pay higher prices than elsewhere.

International data shows our labour costs have risen at a faster rate than in any comparable country besides Norway, Mr Eslake said. These higher wages, and more generous penalty rates, help to explain why our restaurant meals “are typically much higher than in other countries”, he added.

In other words, our waiters and waitress are paid better than in other parts of the world.


Nic Moulis, CEO of the Australasian Convenience and Petroleum Marketers Association (ACAPMA), said Australian petrol prices are comparatively low – the fourth lowest in the developed world after Canada, the US and Mexico.

But this is little consolation for motorists who are paying more and more for their fuel.

Mr Moulis said government taxes were partly to blame, with 36 per cent of the average petrol price over the last two years made up of GST and fuel tax. A further 52 per cent was made up of the cost of the petrol itself.

“The service station owner is making 2 cents [per litre] for selling petrol while the government is making 51 cents,” he said.

Screen Shot 2014-03-05 at 12.43.44 PM

Sparse population

Finally, we are a population that is spread out over a very large area, often with vast tracts of land in between.

The widely scattered nature of our population means that “we need to spend more on transport and more on inventories than a similar population on a smaller landmass would have to”, Mr Eslake said.

With all of that in mind, it doesn’t look like our prices will be falling any time soon.


  • harry

    Simply lack of knowledge,I don’t know if to laugh or cry when people pay a million dollars for a house which in reality is only worth $200k at the most, considering the actual lifestyle in the area, and the price[$8 kg] of a capsicum in the supermarket.

  • Peter

    You forgot all the extra taxes we pay. Importing a product as a company you pay duties on custom inspections, freight forwarding fees, government additional duties on products of certain types, administrative fees and more. Often the price of a product here is only higher vs the USA for example due to all the gov taxes and duties.

    Importing electronic goods there are also compliance costs associated with products when you import as a company.

    Also when you compare prices to overseas, such as the USA, most products are listed ex tax and tax varies from state to state in the USA.

    The other main two are our wages and transport costs as you noted. Part of this also comes down to things such as the insurance costs you need when sending goods around Aust (shipping companies take no responsibility for damaged or lost products) as an example.

    Finally bring isolated with a population of only 23 million means that we can’t import in bulk like the USA can (350 mill). Often we barely meet the min requirements to import goods from a manufacturer so we pay a higher price. In some cases due to government standards requirements and that (for example) for electronic goods we run on a different voltage to many other countries, we pay extra to manufacturers for the shorter production runs and quantities made.

    • CGB

      Correct weight m8!

  • Jon

    I appreciate your hilarious writing style. “Blah, blah, blah… Australia is so expensive. By the way, here is link to an EUI report that costs $995.”

  • AussieInTX

    I moved to the US in 2003 when I married an American. I missed Australia so much for the first few years until we bought a beautiful 5 BRM house and pool on a double block in an exclusive suburb of Houston tx in 2009 for $180k. Now its worth $220k+ and even if I sold it and tried to move back here..what will that $220k get me? Absolutely nothing! I feel sorry for young Australians trying to buy the Aussie dream like we were able to do in 1982 when $60k bought you a brand new house and land in lovely new housing estates. They have no chance and all they are buying for half a million is a sweatbox in the burbs which look more like ghettos these days. I don’t understand how Australians have let it come to this. I can’t afford to come home even if I wanted to. Good luck Australia, you’re pricing yourself right out of the market and Australians are leaving in droves to attain the dream. There are plenty of ex pats living around the world in luxury and not looking back.

    • Gus Bedo

      Dude, ikr! My grandpa bought a house for 25k (with a pool) in the 70’s. The house is a piece of shit, and is in the worst spot ever (even though Hugh Jackman stayed next door to him for 2 weeks). Anyway, if they were to sell that house today, they’d get 3.4mil from it…. How crazy is that!

    • luke

      I am one of them too. Just moved out of Australia because it is getting way too expensive. Australians are slowly gonna get choked without realizing it

  • Kate

    seriously I don’t know were they get these figures from, they are so out of touch, rent alone in city $3000 per month with if your are lucky parking,,packet of cigarettes just basic winfield is $21.00, and going up. Most people I have spoke to Don” t work full time in sydney as full time jobs are hard to come by,like the rest of Australian cities, the average hourly rate here is between 17 to 21 Dollars the cost of food is ridiculously high compared to the rest of the world. The cost of Gas, Insurances,Taxes, Petrol, is day light robbery, What about taxis , they should be charged for criminal rip off. Anyone who says we should be lucky obliviously is young and hasn’t traveled the world, or raised a family, or been ill in their life, If you look back to the nighties income hasnt kept p with the cost of living, Let alone the cost of over inflated house Prices

    • Gus Bedo

      Cigarettes cost so much because they don’t want people buying them.

      • Dan

        If you actually believe that, you’re a very naive person.

        • Claire AwesomeSauce

          I don’t know about Australia, but here in the United States
          certain goods deemed over the years as being bad for your health have extra tax
          attached to them. These items range from alcoholic beverages to cigarettes. The
          idea is to try and price them up high enough to make people reconsider their usage
          of them, and give further incentive to break low intensity dependency as it is
          a large contributor toward impoverished living conditions. Saying that such
          taxation is there for the added revenue wouldn’t have as much ground to stand
          upon here given the exceedingly low taxation rates compared to other developed
          countries of similar Human Development. Increasing taxes tend to be associated with lower economic growth and loss of State and Federal revenue in the long run, and is a very difficult thing to accomplish.

      • madethatway

        Yes, there’s names for taking away people’s freedom of choice and making personal decisions for them – The Nanny State and Dictatorship are two that come to mind.

  • Bruce

    My wife and I just got back from Australia and we had a fabulous time. Sydney, Brisbane, Caloundra, Cairnes, Canberra were a few of our stops. We have Aussie friends who live in Caloundra.. We were there for 3 1/2 weeks. It is without a doubt the most expensive place we have ever been too., First gas there is 6.25 a gallon after figuring the liters, as opposed to 3.50 here. Hamburgers are 15 to 18 dollars as suppose to 7 or 8 here in a non fast food place, Breakfast , Good Lord what is it about breakfast there? bacon eggs and toast is 18 bucks. Here any decent breakfast place you spend 5 to 6 bucks for that. Most of our decent hotel chains include continental buffet breakfast with the room. There it is 19. Then of course a large coke at McDonalds in a cup that is half the size of ours is 4.50 and 1.50 here and in the good ole USA you get free refills at any restaurant whether fast food or five star on coffee tea and soft drinks. Chinese food is so cheap here it isn’t funny. Normal meal with shrimp let’s say costs 10 dollars and you get all the rice you want for free. There 25 bucks and then 4 dollar for small bowl of rice. Also at every place here you get free bread with your meals and all you want. True there is no tipping there but it in no way makes up for it.

    Ok cars a toyoto camry here starts at 24000 there 37000. A BMW 300 series here is a young person’s is driven by 20 somethings. Starts at 35000 here 55000 there. You can lease one for 1000 down and 300 a month for three years. Mercedes S model 80000 here 200000 there. On and on

    Clothes such as Ralph Lauren are 40 per cent cheaper at our department stores and 60 per cheaper at our outlet stores.

    Fact is, I ran some comparisons on salaries between you and us for nurses, teachers, plumbers and doctors and there is no difference. Teachers here can retire after 30 years service with full benefits including medical. True the minimum wage is 15.00 to our 7.50 but the standard of living is the same because you pay twice as much for so many things. People making 15.00 must live at home with their parents and watch tv for entertainment. Sad really.

    • gavin

      all true, what about the traffic fines, parking costs, and out super expensive public transport, and electricity, water, you can pay $350 minimum for not using water, Council rates are friken expensive, $4500 in some councils. it goes on and on.

  • Pesist

    Don’t thank the unions for anything. They’re responsible for driving labour costs ie inflation up.

  • Andy

    One simply question: why there aren’t no players entering in AUS markets selling cheap goods? Why the chinese, which flooded the market of the whole world with inexpensive (and dangerous) goods didn’t managed to compete with such ridiculous prices? Maybe because Aus authorities blocked them?

  • pinkyanddabrain

    please explain why we are so OVER taxed, why our food, entertainment and housing costs are INSANE

    • Ben Chesterman

      To pay workers . You wanna pay them poverty wages. All about me isn’t f everyone else.

  • pinkyanddabrain

    Please don’t misunderstand me, I love OZ, I have travelled the world, we live in a great country………just so damn expensive

  • Thai Trev

    Keep working young you can help pay for my pension.

  • madethatway

    “The tyranny of distance”?? If that were true, then New Zealand – one of the greenest, most beautiful places on earth and equally as ‘distant’ from the rest of the world – wouldn’t be 26% cheaper – and yet it manages that without demanding a long list of idiocies like luxury tax, death tax, etc.

    The truth of the matter is obvious to anyone with half a brain; Australia – as ugly as NZ is beautiful – spins the deliberate falsehood that ‘the tyranny of distance’ is to blame, when the reality is that it’s simply infected and overrun with the corporate disease of obscene greed.

    • Joel

      Finally someone states the obvious. We don’t compare Australia to NZ enough. A fraction of our productive land and population and they are doing pretty well. Size and distance isn’t the issue.
      Cheap warehouse space is abundant just outside our cities. What we don’t have is world leading infrastructure making it easy to build well connected, new and less dense cities.
      Why do roads need to be clogged up by trucks during peak hour? Where are the off peak transport incentives and rail hubs?
      Neo-Conservative governments just want to squeeze garbage out of old fashion tech here and charge us premiums for everything. Let’s hire a consultant to fix Australia. Who would you pick?

      • madethatway

        Oh, you really don’t want to know who I’d pick, but since you asked…

        …it would be someone who thinks outside the square for the benefit of the many, not the few, who couldn’t be bought by corporations at any price, who’d wipe out all political lurks and perks, slash political salaries down to something more in line with the average Joe’s wages, and who’s not only wise, but highly intelligent and an obscenely creative thinker.

        Oh wait….I think the last one of those was crucified 2000 years ago. Huh. And I’m not even remotely religious.

        • Madeline

          *awkwardly puts hand up* Right here. I have nothing and no one who could get me there but I certainly have a big vision for Australia. However it is quite a stretch to ever truly help everyone as most likely the rich and greedy would get a sniper on the tail of anyone who wants to change things up.

  • Pingback: CPL006 - Concrete Playground()

  • Pingback: It Looks Like Channel Nine’s New Streaming Service Actually Won’t Suck | Meg Watson()

  • Jane

    Having owned a business wages are really not one of the worst cost factors. Try things like fuel (with lots of government excise & taxes), lots and lots of licences & associations you need to have, high cost of vehicle and other insurances and I mustn’t forget LAZY people who think that they are entitled to talk on the phone or use the internet for an hour a day (not their lunch hour).

  • Anonymous

    No offense, but Mexico is not a developed country. It’s still a developing country.


    This Geo-blocking is complete nonsense. They should get rid of this ASAP. It’s not fair for the wonderful people of Australia to have to pay so much more for products.
    Good thing there is some ways to block yourself online so you can pay the right price of something, and not get ripped off.

    • Ben Chesterman

      We earn higher wages . We really don’t get ripped off . Most cars in USA are pretty close to the price here . U just take 10 k off Aus price that’s USA price . Even with our currency

  • James Nolan

    if you want to really know why prices are so high in Australia start with the government taxes on top of taxes a government crying poor all the time but can send money abroad to help other countries but cant help Australians then you have got the prime minister the highest paid in the world and he is incompetent as is the rest of his government and stop blaming the previous government its only his word which is not worth 2 bob he has never produced any reports or anything to back up Australia is in as bad a state as he would like you to believe start critersising where the real fault lies with the government of the day.

  • Mick

    Don’t forget how much more expensive it has become since the GST came in and power,gas and telecommunication has been privatised!

    • doomed

      yeah even children pay tax now every time they buy anything that is not a carrot.

  • Pip

    The USA = Higher Dollar, Lower Price.

    Australia = Lower Dollar, Higher Price.

    No wonder they call Australia the backward country, they’re devolving with an infrastructure mentality like that.

    If the price of a dollar is lower it makes sense to lower the price of goods so people can afford it. How does it make anything sense to say “Oh, your dollar is low, we’ll just over charge everything so you can afford it”

    =/= Logic.

    Just look at the Itunes example, the whole ‘shipping’ excuse gets shown for the bullshit it really is.

    This world is a toilet for common sense.

    One word to explain everything.


  • Riley Francisco

    Because no one wants to live in the desert.

    • talon

      yet las vegas is popular why cant we do something with the desert

    • May

      There are a lot of lands outside the capital cities and they are not in the desert.

      • Lots of land No jobs. Also the Libs will penalise you for choosing a lifestyle that aloows you to own a home.

      • Filmie

        There are huge spiders and nasty bugs elsewhere that’s why.

      • John Smith

        Vast semi-desert lands outside capiat areas are actually made unusable in the name of Native Land Title brought in 1994. Australia has been dominated & ruled by multinational mega corps from all over the west for many decades. They use all sorts of dirty tricks to concentrate most of Australia’s population into the narrow strip of coastal regions on the east & some part of the west. In order to create the false scarcity of housing. Native Land Rights like issues are also skillfully used to promote this aim. Since most of developable inlands are made OFF-Limits, both Australians by birth & new migrants are forced to live in heavily populated areas. And this further pushes housing cost up. Endlessly. And just as someone else mouthed, Negative Gearing is also the worst contributing factor in tax term.They can reduce their fair tax liabilities by creating a needless debt(spent to buy a second or third houses for property speculation purpose). In this social environment, the honest workers & fair tax payers are permanently set to be LOSERS. They lose large portion of their actual income to housing rental alone. Otherwise, they end up as the life-long mortgage slaves.

  • But thats what you pay for to live in a country with no wars, little pollution, fresh air and green grass, plenty of space and a well developed country.

  • Tom

    1. Negative gearing tax
    2. Politicians have their investment houses
    3. A lot of Chinese buy the properties in Australia.

  • Tom

    Australians are ripped off by the car companies.

    US – BMW 528i sedan – Starting at US$49,950 MSRP (i.e. AUD 49,950/0.7678 = AUD 65,056)

    Australia – BMW 528i sedan –
    Manufacturer’s Recommended List Price $92,701
    Recommended Dealer Delivery $3,000.00
    Luxury Car Tax (LCT) $6,097.80
    VIC Registration Costs $795.33
    VIC Stamp Duty $5,293.60
    Recommended Drive Away Price $107,887.73

  • Reubs

    I agree with Kate. Everything has tripled in price since the nineties but wages have not. So we all need to be earning $50 + per hour now to have any chance at all economically speaking.

  • Skye Belle Matilda Brand

    Wait, what? Recycling filters? That seems, at best, counterproductive & at worst a potential biohazard risk. I’m not a smoker but if I was that info would probably be enough to kick me into quitting.

  • freddyzdead

    There are two reasons everything is so expensive in Australia.
    1. Back in the 1970s, the unions held industry over a barrel until they agreed to the unions’ outrageous demands. Eventually, this flowed on to all workers, and we became among the highest-paid workforces on the planet. What has happened now is, because we pay ourselves so much, anything that has to be handled by humans has an enormous labour price tag added to it, and it is reflected in the shelf price of everything.

    2. Australians are lazy. There’s no way around admitting it, we do not like to work any more than we have to. When deciding what to charge for something we are selling, the wholesale cost of it has nothing to do with it. We charge what we can get for it. This national mindset has set the country back in almost every way you can think of.

    The “Tyranny of distance” is bullshit, There may have been some justification for that in the 1950s, but not now. But some of the mentality of that era has survived. So many believe that prices in Australia are high, because just go to the store and look, you will see for yourself. Blaming high prices on Geoblocking doesn’t deserve to be dignified by a comment. The truth is, if Australia had gotten out from under the thumb of the Poms a lot sooner, it would have learned to stand on its own two feet and we wouldn’t be in this mess now.

Try us on tablet & mobile