When Brothels Are Overtaxed, Only Tax Rebels Will Be Illegal Prostitutes

Crikey! Australia is taxing brothels, leading to this sketchy AFP story via Yahoo News that foreign backpackers and students are flat on their outbacks, "especially" in "northern Queensland." Bonus points for weak sources, no stats, magical pic (on right), and strange use of English ("overheads"?):

Many young tourists to sun-soaked northeastern Queensland state were making a quick buck as black market prostitutes, undermining registered operators' attempts to uphold health and safety standards, the Queensland Adult Business Association's Nick Inskip claimed....

Having fewer overheads, they could often undercut the legal sex industry on price, making it harder for the state's 23 legal brothels to make a profit, he said.

"They can charge less because they are not paying GST (goods and services tax), staff costs for managers and receptionists," Inskip said.

The tax office, which recently began a drive to collect tax from the industry, was also hard pressed to keep tabs on their undercover activities, he said....

Although prostitution at registered brothels is legal in many parts of Australia, recent research suggests the taxman's attempts to target the industry has sparked an exodus towards riskier illegal sex work.

Academics have also noted that the crippling cost of higher education in Australia has forced some foreign students to seek work as illegal prostitutes to make ends meet.

More here.

Comments

highnumber | January 31, 2007, 12:41pm | #

Tourists are making the quick bucks? What kind of college students goes on vacation and literally whores him/herself? Are they treating these as short term jobs while on break? The whole story is quite sketchy indeed.

I know the creepiness factor rises pretty high pretty quickly at times here, so I hesitate to do this, but...
Where is that photo from? Is that a still from a movie about a brothel or a publicity photo from an actual Australian brothel or what? I ask because I am impressed. It is sexy but not raunchy. Good choice.

Shelby | January 31, 2007, 12:42pm | #

One hardly knows where to begin.

So, is Australia to be commended for taxing and regulating rather than flat outlawing this business? Condemned for its discrimination against foreign workers? Or laughed at for getting itself into this predicament?

val | January 31, 2007, 12:42pm | #

I love gratutitous nudity, however considering the time of day and the amount of people who read and post from work that picture could get H&R visitors in trouble.

val | January 31, 2007, 12:46pm | #

Heh, also wanted to draw attention to the adds that comeup on the right of the screen with this post.

Legate Damar | January 31, 2007, 12:55pm | #

Aussie accents are fantastic, granted, but who wants to whore themselves during their own vacation?!?

Shelby | January 31, 2007, 1:03pm | #

who wants to whore themselves during their own vacation

umm, someone who's run out of money, wants to stick around, and enjoys sex with strangers?

I. Self. Divine. | January 31, 2007, 1:06pm | #

who wants to whore themselves during their own vacation?!?

Me.

Umbriel | January 31, 2007, 1:20pm | #

Legate Damar -- Aren't you pretty much describing Spring Break?

Christopher Monnier | January 31, 2007, 1:34pm | #

> Academics have also noted that the crippling cost of higher education...

The crippling cost? No bias there...

happyjuggler0 | January 31, 2007, 1:37pm | #

Having fewer overheads

Strange English indeed. I suspect that what they really meant to say was having lower overheads, which of course (!?) refers to a popular sexual technique.

But clearly fewer overheads is not a great selling point for a whorehouse.

:)))

lunchstealer | January 31, 2007, 1:42pm | #

You've got to remember that backpackers are often doing this as a year-long break before/after uni, so they often take on bit-work jobs to make some cash before going back to the getting stoned and hanging around part of their lifestyle. I've certainly never heard of anybody actually whorin' it up, but it's not implausible, on the face of it.

Mick | January 31, 2007, 1:43pm | #

A big part of the motivation for decriminalizing prostitution in Australia was to eliminate the police corruption that goes along with any illegal activity that people want to engage in.

But there are bugs in the legislation. For instance:

- Sex workers are not allowed to make house calls. In effect, office rental is a requirement for legal brothels. Office rental increases overhead costs. (I guess Nick's PhD in English did not cover British and Australian English usage.)

- Unprotected sex is not allowed. smh.com.au recently reported that "Nine councils across Sydney have paid private detectives $25,000 to have sex with prostitutes to gather sufficient evidence against illegal brothels".

Councils paid contractors to have sex. Got that?

Akira MacKenzie | January 31, 2007, 1:46pm | #

"I love gratuitous nudity, however..."

The only place nudity is "gratuitous" is in Antarctica. If we humans stop desiring sex and the wondrous sight of naughty bits then we've our species has lost the privilege of existing.

That said, it's no wonder that many Fundamentalists oppose sexual freedom given their doomsday desire for the world to end.

No, on to the topic at hand...

This is the one thing that's bothered me about the whole "legalize vice and tax it/regulate it" wing of libertarian thought. OK, let's say we follow do just that: We legalize prostitution and tax it order to pay for the State to make sure the sex workers are STD-free and are using contraceptives. OK, how much is that tax going to be? Will it be low enough so that the average, lonely, working-class Joe (like myself) could still afford a few ours of carnal bliss, or will the new taxes drive the price up to Vegas brothel levels, were a "party" can run upward anywhere around $5000-$10,000?

Since the dateless guy making $12 an hour probably as much desire for sex as the CEO for a Fortune 500 company, the market is going to respond. Unregulated prostitutes and brothels are going to spring up, and will become targets for law enforcement, while the Up-scale prostitutes get to ply their services with the assurance that they have their own little state-protected oligopoly on on-demand sexual gratification.

This is exactly what we're seeing in Australia.

Kwix | January 31, 2007, 1:56pm | #

highnumber,
Not sure, but it reminds me a lot of the photos from Viking Exotic Resort in the Dominican Republic. I can't exactly visit the site from work but will try to verify it later.

Pepe | January 31, 2007, 2:06pm | #

"Unprotected sex is not allowed. smh.com.au recently reported that "Nine councils across Sydney have paid private detectives $25,000 to have sex with prostitutes to gather sufficient evidence against illegal brothels".

Note to self: Make immediate move to Australia. Seek work as private detective.

Kwix | January 31, 2007, 2:07pm | #

Akira,
Bingo! I expect to see an increase in back-alley prostitution in Amsterdam due to the "crackdown" by Dutch authorities last Novemeber as well. Taxing and Regulating any item is a very fine line, particularly when the item is easily produced(cannabis, moonshine) or is simply an act of labor(physical love, waiting tables, construction). Just like prohibition of the act or item drives the price high enough to create a black market, if tax levels are too high a black market will be created as well only with a state sanctioned and protected "higher market".

highnumber | January 31, 2007, 2:18pm | #

Kwix,

Whoa. You got the site right.

Whoa.

highnumber | January 31, 2007, 2:20pm | #

Does VikingMoose have his hooves in that?

Eryk Boston | January 31, 2007, 2:20pm | #

Academics are complaining about the cost of education. Are they asking for a pay cut?

NoStar | January 31, 2007, 3:01pm | #

What about those damn libertines who give it away for free? Why not blame them for making it harder for brothels to turn a profit from turning tricks?

Anyway, i was reminded of a ridddle:

Q. Why is a one story brothel more profitable than a two story brothel?

A. Less overhead.

Rex Rhino | January 31, 2007, 3:20pm | #

In this case, Austrialia legalized prostitution (a good thing), but unfortunatly over-regulated it to the point that your average person cannot afford the legal alternative (which is a bad thing).

It would be like legalizing weed, but setting the minimum cost of weed to be $1,000,000 per kilo. You have, for all practicle purposes, only legalized week for the ultra rich.

John | January 31, 2007, 3:38pm | #

"It would be like legalizing weed, but setting the minimum cost of weed to be $1,000,000 per kilo. You have, for all practicle purposes, only legalized week for the ultra rich."

If drugs are ever legalized, that is what they will do; create a way for the rich to get off and the poor to still go to jail.

Mick | January 31, 2007, 3:38pm | #

> It would be like legalizing weed, but setting the minimum cost of weed to be $1,000,000 per kilo.

Not exactly. Here is a google listing of some rates.

JD | January 31, 2007, 3:50pm | #

And to think I passed up that opportunity to move to Australia for work! (I know what you're thinking. I mean computer work. Ha ha.) Seriously, I was kind of aware of this already. AFAICT, it's working out OK. You do not, contrary to some people's expectations, see "JOE'S HOUSE OF WHORES" on every street corner and women are not, so far as I can see, being kidnapped to be sold into sexual slavery. Why would they be? The brothels advertise for positions (no pun intended) like any other business and make a big deal out of how safe and clean they are. Take a look at jobs available at Stiletto and why it's so great to work there. (Links are arguably work-safe, but I can't vouch for anything you might click on from there.) If they can offer bennies like that, they must be doing OK.

NoStar | January 31, 2007, 4:02pm | #

JD, That link is great. I couldn't resist clicking on the button that said Our Ladies Come First

Mick | January 31, 2007, 4:33pm | #

According to the Yahoo story, the image at the top of this page is of the Daily Planet brothel in Melbourne.

ChrisO | January 31, 2007, 4:54pm | #

"Nine councils across Sydney have paid private detectives $25,000 to have sex with prostitutes to gather sufficient evidence against illegal brothels".

Gives a new meaning to the term "private dick."

Chuck | January 31, 2007, 5:24pm | #

JD--

I noticed on the jobs available page it says, "training provided". Hmmm. I wonder if I could get a job as a trainer...

mediageek | January 31, 2007, 6:29pm | #

"In this case, Austrialia legalized prostitution (a good thing), but unfortunatly over-regulated it to the point that your average person cannot afford the legal alternative (which is a bad thing)."

So it's like trying to legally buy a machinegun in the US. Technically it's legal, but the fed-mandated cap on supply has driven prices into the range of tens of thousands of dollars.

Akira MacKenzie | January 31, 2007, 8:54pm | #

Don't get me wrong though, I think prostitution should be 100% legal. However the challenge is to make sure that the bluenoses don't to regulate it out of existence (de facto prohibition) or artificially turn it into a luxury service while at the same time making sure sex work is still safe for both the client and the prostitute.

I understand that the erotic movie industry has a private system in place to provide regular check ups for their performers to make sure they're STD-free. Perhaps a similar system could be put in place for future legalized prostitutes (assuming the price is not prohibative).

Now watch, one of H&R's resident statists will swoop down and proclaim that for-profit regulatory organizations will always be corrupt and that immaculate, infallible, and incorruptible government agencies should be the ones peaking up hooker's skirts.

Lindsay Lohan | January 31, 2007, 8:55pm | #

If drugs are ever legalized, that is what they will do; create a way for the rich to get off and the poor to still go to jail

That is the system we have now with illegal drugs

Akira MacKenzie | January 31, 2007, 8:57pm | #

Editing: peeking up...

Akira MacKenzie | January 31, 2007, 9:01pm | #

That is the system we have now with illegal drugs

It's the system we have for prostitution right now. The police only tend to target street walkers, massage parlors, and in-house sex workers while they tend to leave the high-end escort services sex rings alone, that is unless the local DA wants to look good on for an upcoming election, or the owner missed a bribe.

Akira MacKenzie | January 31, 2007, 9:01pm | #

Edit; ...services and sex rings...

Jon H | January 31, 2007, 9:54pm | #

An Australian brothel listed on the stock exchange down there, not too long ago.

Mad Max | January 31, 2007, 11:44pm | #

"An Australian brothel listed on the stock exchange down there, not too long ago."

Did the stocks rise in heavy trading? Or did they go down?

Len | February 1, 2007, 1:01am | #

Looks like I'm the first Australian to post..two things:
- "overheads" is in common use here to mean what it sounds like; ie, the various miscellaneous expenses incurred in operating a business.
- Most of our backpackers are of European or Asian origin and have more (dare I say it) liberal sexual attitudes than their American cousins. So it's not as implausible as you might think.

cheers,
Len
(who lives around the corner from Stiletto, coincidentally)

I. Self. Divine. | February 1, 2007, 1:11pm | #

Editing: peeking up...

Akira, I think I preferred "peaking"