The Queensland Competition Authority (QCA) has released its draft report into disparities in local and international prices for disability aids and equipment.
“The QCA is investigating prices for medical and disability aids to test whether Queensland customers are paying competitive prices,” said QCA chairman Malcolm Roberts.
“More than 243,000 Queenslanders live with a severe or profound disability. Each year, these Queenslanders spend about $500 million on disability aids and equipment.
“The QCA has examined prices for 35 commonly used products. The preliminary findings are that Australian customers tend to pay higher prices than customers in the US and UK.
“It is hardly surprising that international online prices are usually lower than local retail prices, even when delivery costs are included.
“Online businesses tend to have lower overheads than ‘bricks and mortar’ retailers. Overseas online suppliers do not offer the same face to face services and warranties as local retailers.
“At the same time, international online prices are often lower than local online prices. With the exception of some commodity products, Australian prices – retail and online – are usually higher than US and UK prices,” Malcolm Roberts said.
The report finds that price differences are not due to any single issue.
“First and foremost, Australia is a high-cost country for retailing.
“Retail prices in Australia are about 20% higher compared to similar countries and 30% higher compared to the US.
“In a small market, Australian retailers face higher fixed costs than the United States or the United Kingdom.
The QCA has found that Australian retailers face higher regulatory and wage costs than overseas. This is true for mass market retail products. The problem is greater for products consumed in smaller volumes such as disability aids and equipment.
“At this stage, the QCA has not found evidence showing misuse of market power to inflate prices.
“The good news is that the QCA’s investigation shows that products purchased by the Queensland Government’s Medical Aids Subsidy Scheme are often cheaper than local retail prices and even US online prices.
“However, streamlining the application process for government programs will help consumers. There is also potential to improve government purchasing, possibly by consolidating the more than 100 schemes operating across Australia.
“Finally, steps taken to improve manufacturing and retailing productivity generally will also have a positive impact in medical aids and equipment markets,” said Malcolm Roberts.
We are seeking responses on the draft recommendations by 13 January 2014, before submitting a final report to the Queensland Government by the end of February.
To download a copy of the report visit our website www.qca.org.au