Wednesday, October 13, 2010

The great Kiwi rip-off?

New Zealand: 100 per cent pure rip-off or the price of paradise? It costs a lot to live at the bottom of the world. 

A few months back, British sports writer Peter Bills threw sand in the face of New Zealand accusing the goods and services sector of egregious overpricing.

The veteran journo and seasoned traveller bemoaned across-the-board costs and claimed Kiwi prices were well above what you could expect to pay in the most expensive cities of the world.

With the world soon to arrive on our doorstep as we play host to the 2011 Rugby World Cup, Bills suggested the country was "sleep-walking" into acquiring the unenviable reputation as international rip off.

His inflammatory comments ignited the simmering debate about whether the price of paradise was worth it.
The personal finance website, in an on-line forum headed "Rip-off New Zealand" took the issue public and found widespread support for Bills' complaints.

Writes "Greg": "I am disgusted with internet prices both on mobiles and home plans, the price per gigabyte is staggering. Considering, in the UK you can get unlimited data for about 35 a month, here we would be talking hundreds of dollars and still not unlimited."

With some of the highest mobile-phone rates in the world, the telecommunications sector is often a prime target when talk turns to price gouging. Food is another.

Another contributor to the on-line discussion, "Nzconsumer" questions why Anchor-brand New Zealand butter can be bought for less in the UK than at home.
Others expressed concerns that the increase in GST from 12.5 per cent to 15 per cent would manifest in mark-ups beyond the incremental tax hike.

Summarising the discussion, Paul Woollams, one of Moneytalk's directors, says people felt they were being "ripped off across a range of areas, particularly food and utilities, which is where much of their day to day (non-housing) costs are incurred".

He says many fed-up consumers were turning to on-line international shopping to save themselves money.
"Kiwis are getting frustrated not just with consumer prices but the inability to be able to do anything about them. Throughout the numerous posts on the site we see murmurings about a feeling of helplessness and having no option but to pay the extortionate prices."

But is the criticism warranted? Are prices across the board really that much higher than other parts of the world?

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