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Saturday, August 07, 2004

Ripped Off in NZ III (Urban Expedition) 

Well, as promised, an initial installment on "the cost of living in NZ", driven by the broad observation of Yamis and myself that it is "too fucking high."

A 20-inch flatscreen TV cost me $192 in Canada ($223 in NZ dollars based on today's exchange rate), so I went out and tried to find one in Dunedin. Well, to tell the truth, I just went to the Warehouse, which I figured would generally be at the cheap end of the market. The closest they had was 21-inch screen for $399. Assuming you might save $40 or so on the slightly smaller one, let's say $350 vs. $223. And that is 1.57 times the price.

And bear in mind that's taking into account the exchange rate (relevant for goods bought and sold on the global market), and the fact that the Canadian sale price included 14.5% sales tax, not 12.5% as is the case here.

More depressing news met me at Pak-n-Save, where 500g of frozen spinach was $2.79, compared to $0.99c in Canada ($1.16NZ). So there was a price difference of 2.4 times, slightly exaggerated by the fact that Canada has the humane attitude of not charging sales tax on 'essential' food items (i.e., everything except junk food).

Can't help but think the single best thing the Government could do to help "ordinary low-to-middle income New Zealanders" would be to cut and eventually abolish the GST. Bugger this tax rebates for parents nonsense ... everyone should be able to afford 500g of frozen spinach.

In other news, anyone who finds it difficult to get out of bed in the morning will find this Guardian commentary on the joys of idleness absolutely fucking hysterical. As will anyone who enjoys wasting time drinking, or writing blogs, etc. etc. Best writing I've read all year (and there's more to come in a book). Here's an excerpt to whet your appetites:
A part of me would like simply to toy with my mistress for days on end under the lotus tree or on an enormous pile of velvet cushions, while smoking, drinking and laughing.

Amen to that, brother. On an unrelated note, Cracker has an interesting commentary on being a blogger, and charts the disappearance of various right-wing NZ blogs which arrived with a bang and disappeared without so much as a whimper.

that's classic.

I'll be looking for a copy when it comes out.

Got up at 10:30 this morning. Still haven't put on a shirt as at 3pm and will be drinking and watching the rugby, out boozing after and possibly asleep by 3am and up about 1 tomorrow.

Just how I like it.
Economies of scale I guess. 1 million TV's shipped to a market compared to 50,000 should equal a cheaper price point and cheaper freight. Given that a TV made in Asia will be NTSC format as will North America (I confess to not knowing the format for Canada). NZ, of course, is PAL. There is also the voltage and power cable difference. The expense of changing those things for a comparatively miniscule market should account for the TV price difference.

The food thing? Again, is the brand compared to the same? Is the Canadian brand also sold in the US? Is the NZ brand local?

Regardless, I agree. Too much tax and the lower and middle incomes get it in the end. Basics should be exempt. So should organics. Tax free at the consumer end. Tax breaks at the manufacturer and supplier end. Then there would be an incentive for companies to get the quality of food available at a competitive price from conception to consumption.

I could be wrong of course. Such is the nature of hypothesis.
Just checked an online site for Samsung here in Korea.

21 inch flat screen tv goes for about $310 NZ.

Actually electronics in Korea are surprisingly expensive and Japan isn't much better. Considering they are all designed and made in these countries, and have massive markets to sell to you would expect it all to be dirt cheap but somehow they get away with ridiculous prices (probably to do with all the protectionism for local chaebols who own everything in the country both nailed down and otherwise).
Thanks for that. I'd been thinking about the TV issue ... yes, NZ does have the PAL system, as opposed to the NTSC system in the US, Canada & Asia.

But I assume the same factories/industrial complexes are able to produce both types(and the strange third type the French use).

And moreover that it is in these complexes that the economies of scale are generated ... in the end it doesn't really matter whether they put a New Zealand or Czech Republic plug onto a cord sticking out of a mass produced TV.

Different power converters, plugs, and cables etc. presumably cost about the same amount, +/- a few cents.

The distance the goods need to travel from Asia is probably slightly less to NZ than to the west (Pacific) coast of North America. Although North America is dealing with much bigger quantities of course.

Can't help but think the NZ consumer is being gouged.
Some hit NZ and the plug gets changed by a third party. There is a production line for generic TV's that can roll out low cost/high margin product if the order is a particular size. You can pretty much get them branded whatever you want. Name brands aren't so flexible, and are usually around 20-25 points of margin. Parallel importers operate around 10 or less. They are low cost operators with one store or a website only. Retail chains have pretty high overheads. Money has to come from somewhere or the business does't stay around long.

NZ retail operates on a profit basis rather than volume which say Australia operates on due to the volume of sales they have. We can't do that. Unless everyone upgrades there appliance each year. The anti-consumer in me says that is bad.

Put it this way. If you see a name brand blanket discount in January at 20% off, you may pay below cost. If you buy something on a long interest free
term and don't buy additional services, likely the same.
I forgot. Good site. I like it a lot.
I forgot. Good site. I like it a lot.
this is starting to make me wonder whether we shouldn't undertake the massive project of changing our systems so they match up with those abroad. it would cost plenty but if it's going to potentially save households hundreds of dollars a year it might be worth it in the long run?

Anybody got any ideas on that?

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