source: The Project

Australians won’t be surprised to hear we pay a premium for many products purchased online. But last week, a Parliamentary committee finally put some figures on the table about what they’re calling “the Australia Tax”.

And with no money going to the government, this is one “tax” that even MPs are opposed to.

The Standing Committee on Infrastructure and Communications says Australians pay an average extra amount of 30% for e-books, 46% for hardware, 50% for professional software, 52% for music and a whopping 84% for games.

And if you decide to purchase your products from an overseas vendor, therefore paying cheaper prices, you’ll often come up against another hurdle: geoblocking.

With traditional barriers to international retail – geography, shipping costs, trade barriers - being eroded, in particular by the internet and the availability of digital downloads, content providers instead keep international price discrimination in place through detecting a user’s location.

(We use a similar technique on our website here to ensure that viewers of our catch-up episodes are in Australia – in our instance for music and footage licensing reasons.)

The committee concluded that the practical effect of commercial geoblocking was to restrict Australians’ access to a cheaper global marketplace.

The committee not only suggested amending the Copyright Act to allow consumers to circumvent geoblocking, but even recommended that the government look at educating Australians on how to do it.

The usual technique involves signing up for a Virtual Private Network, or VPN, through which you can appear to be logging in from overseas – most commonly the United States. But tread warily; some VPNs, particularly free ones, are run by criminals, so be careful what details you hand over.

Then you can come up against the problem of providing an overseas billing address. There are services that can sell you a fake one, but not only can that feel pretty dodgy, it can make you technically in breach of your license. And that means the software provider is within their rights to stop you using their product.

As it stands, circumventing geoblocking is a legal grey area, and the committee’s recommendations are quite controversial. Depending on how the IT industry reacts, politicians are suggesting they might take even more drastic action.

Committee member and Labor MP Nick Champion told The Project, “Ultimately we will have to look at banning geoblocking if the industry doesn’t respond.”