- May 6, 2009
- 10,291
- 24,316
- AFL Club
- St Kilda
Not sure how much that contributes to the economy since.
Manufacturing cost of IPHONE = around $30. Selling cost around $1000 Apple Australia's price from Apple's ( are they still in Ireland )? Head office around $950.
How does spending $900 dollars that someone has generated in Australia, to an offshore tax haven in exchange for a disposable piece of junk benefit the country?
Employing people to sell, market, distribute, transport, advertise, store, repair.
Plus insuring, financing, housing etc all the companies that DO all of the above in australia is the value that is counted in gdp.
Yes most of the 900 dollars that an iphone costs does not benefit australia... because all of those above factors only account for a few bucks of that 900 dollar price tag, and the rest of that 900 goes offshore.
But that is a separate discussion.
Think of Australias gdp (ie our total wealth as a country) as a piechart.
60% of that pie is a result of consumer (household) spending.
How do consumers buy things?
From shops and businesses
How do shops/businesses sell things?
Advertising, transport etc etc (see above list).
Therefore essentially those few dollars per iphone etc that stay IN australia to pay for what businesses spend to sell to consumers = 60% of how our wealth is made.
It's by sheer volume of goods and services being sold that all those small amounts per transaction equates to a massive number, making us a rich country.
(Or at least maintaining our status as a rich country)
I believe the term 'consumer spending' includes not just retail goods but also things like buying and selling property- so I'd expect that a large chunk of that 60% comes from the housing market, but i haven't looked up the breakdown of that 60%.
Obviously building, buying and selling houses etc for ourselves nets far more money for the country than iphones etc- but there are far less of these high value (for australia) housing transactions than low value (for Australia) iphone etc transactions.
but the point is they all add up to and constitute consumer spending- which accountsfor 60% of our wealth.
Which is why i said we now ride on the iphones back
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