Price disparities for disability aids and equipment

The Queensland Competition Authority’s (QCA’s) final report into Price Disparities for Disability Aids and Equipment identifies the many factors responsible for the often significant differences between local and international prices for disability aids and equipment.

“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,” said QCA chairman Malcolm Roberts.

“The quality of life of so many people depends on having access to the right equipment at an affordable price.

While government programs assist low income customers, many purchases are made by private buyers. Competitively priced products are essential for all customers,” said Malcolm Roberts.

The QCA examined prices for 35 commonly used products. In general, Australian customers are paying higher prices than customers in the US and UK.

“Much of this difference stems from higher economic and regulatory costs in Australia for retailing in general.

The OECD estimates that price levels in Australia are, on average, 28 per cent higher than in the US. The Productivity Commission reached similar conclusions in its 2011 inquiry.

“It is important to do ‘apples for apples’ comparisons. Online retailers will usually have lower costs than bricks and mortar retailers. Australian retailers offering warranties and services will have higher costs than overseas operators.

“However, even taking these factors into account, it seems clear that Australian consumers still pay more for many aids and equipment compared to consumers in the US or UK.

“Concerns are sometimes raised about anti-competitive conduct in the market. However, the QCA doubts that the conditions exist for the widespread use of significant market power.

“One way to reduce price differences would be to reduce regulatory costs for local retailers and manufacturers. Reforms could include less restrictive trading hours, improved recognition of appropriate international standards and streamlined requirements for government purchasing programs.

“These reforms have the potential to expand the supply of disability aids and equipment and reduce prices paid by consumers,” said Malcolm Roberts.