"Netflix Tax" Confirmed For Australia - Expect 10% Price Rise on Digital Goods

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"Netflix Tax" Confirmed For Australia - Expect 10% Price Rise on Digital Goods

netflix

Australia's already ludicrous video game prices may increase further.

A bit of bad news for all of our Australian friends today. Federal treasurer Joe Hockey has confirmed that the "Netflix Tax" - a new proposed 10% tax increase on digital goods such as video content, video games, and eBooks - has been confirmed for the 2015 budget. While we're not 100% sure what this means at this time, the worst-case scenario is that Australia's already ludicrous video game prices may increase further.

The 10% price rise is due to the fact that Australia's sales tax - the GST - is currently not being applied to digitally purchased goods. "It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge the GST," Hockey told the ABC. "When the GST legislation was originally drafted, it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and e-books from overseas," he explained.

While this is sure to hit all the big-name retailers like Steam, Amazon and Netflix, smaller-time and retailers that don't use geopricing (like Good old Games) are likely to slip past unnoticed, with the Australian Taxation Office powerless to stop them.

Furthermore, as publishers like to keep price parity between digital and retail, it is highly likely that most of them will just absorb the 10% tax into their own losses in order to keep a Steam copy of the game the same price as a retail copy.

We'll just have to wait and see how this pans out.

Source: PC Gamer

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It would have been nice if, instead of putting this 10% tax on digital goods that affects everyone, maybe close that loophole that lets big companies pay significantly less tax than they should.

I remember when Australia used to be called 'the lucky country', as is it's just a whole where people dig holes and go to die.

I think I'll join my sister in the states eventually, just sort out that whole, 110% more likely chance of getting shot and I'll be more interested.

Wait... doesn't Steam already charge us the same price as the physical retailers for most of their games? I haven't stepped into an EB in ages, so I can't be sure.

dumbseizure:
It would have been nice if, instead of putting this 10% tax on digital goods that affects everyone, maybe close that loophole that lets big companies pay significantly less tax than they should.

Unlikely since it takes less political will to screw the little guy than o stick the big guy with the bill.

MrHide-Patten:
I remember when Australia used to be called 'the lucky country', as is it's just a whole where people dig holes and go to die.

I think I'll join my sister in the states eventually, just sort out that whole, 110% more likely chance of getting shot and I'll be more interested.

The gun stuff is really not that bad. I was born in the US and have lived for 34 year in it part of which I worked security. I haven't yet had a gun pulled on me as long as your careful you should be fine. Also you could always get armed yourself to even the odds:).

Honestly less of a big deal than it's being made out to be. Any informed Australian purchaser has been using VPN's and/or buying from sites other than steam for some time now. Steam prices (outside of sales) are already terrible so 10% more won't change much.

All this tax hike means is that I'll now get even more value from the VPN I'll be subscribed to thanks to our terrible forthcoming anti-piracy legislation.

Well I import all of my games anyway. I guess it's about time I started seriously thinking of moving to another country. One that's not a nanny state with stupid pricing on electronic and digital goods. Oh and one that actually has a functioning fiber optic broadband network.

Nippon here I come!

Is raising taxes on the rich, that hard?

Oh wait, it is, how will the poor conservatives live, if they have to contribute more to society?

Shinkicker444:
Wait... doesn't Steam already charge us the same price as the physical retailers for most of their games? I haven't stepped into an EB in ages, so I can't be sure.

If you can find a physical copy of the game, yes (since outside of the biggest titles most don't get a physical release these days), but outside of Valve's own in-house or licensed games (as in they buy the licence, like with Dota) they don't set the price, the publisher of the game does, or the developer if Valve is the publisher.

Plus, the steam copies of games which do have physical alternatives have quicker discounts of prices that are determinant, and go on sale on a regular enough basis.

MrHide-Patten:
I remember when Australia used to be called 'the lucky country', as is it's just a whole where people dig holes and go to die.

I think I'll join my sister in the states eventually, just sort out that whole, 110% more likely chance of getting shot and I'll be more interested.

Then come to Canada. It's like America, only with better health care and lower gun crime. Plus we're still part of he empire (and on a serious note, it would probably be easier to immigrate to here then to the US given Australia is one of the countries with a fast track for immigration here).

OT: Well that sucks, Aussies already get screwed over more then us here in Canada by the "foreigner tax" US companies impose on products.

MrHide-Patten:
I remember when Australia used to be called 'the lucky country', as is it's just a whole where people dig holes and go to die.

I think I'll join my sister in the states eventually, just sort out that whole, 110% more likely chance of getting shot and I'll be more interested.

Just don't go anywhere near a city, and your gun crime is the same as most other countries. It's the cities (and only the shitty parts of them, at that) that have all of the crime, much of it being gang members killing other gang members.

Do you want piracy? Because this is how you get piracy...

Jandau:
Do you want piracy? Because this is how you get piracy...

I was about to come in and say, YO-HO YO-HO PIRATES, AUSTRALIA WILL BEEEee.

Typical conservative taxation policy. Abbott/Hockey are almost guaranteed to lose the next election, it's really a question of whether or not Labor will have the spine to axe it.

Meanwhile, plenty of publishers are still charging full retail price for digital game copies in Australia (looking at you, PSN). Between this and our relatively slow download speeds, the idea of a digital future is still very much a pipe dream in Australia.

Oh good. A 10% price hike.

Because I wasn't already paying enough, given we pay in USD and sometimes our price in USD is higher than the American store.
And conversion from AUD to USD means we pay more ANYWAY.
So yeah, we already get two price hikes. Why not a third for the crime of being born here?
I wouldn't mind the GST if prices for games weren't already exorbitant.

Steven Bogos:
retailers that don't use geopricing (like Good old Games) are likely to slip past unnoticed

Um, GoG does charge Aussies more. The Witcher 3 bundle is something like $130

Jandau:
Do you want piracy? Because this is how you get piracy...

By applying the tax that applies to everything else? Sorry but there's no way people can claim this isn't fair. Digital goods have avoided tax for years, this was bound to happen. As Steve said in the report, since most companies already charge full price they will just obsorb the cost as it was already apart of the price for physical goods. Companies just pocketed the difference previously.

Bernzz:
Oh good. A 10% price hike.

Because I wasn't already paying enough, given we pay in USD and sometimes our price in USD is higher than the American store.
And conversion from AUD to USD means we pay more ANYWAY.
So yeah, we already get two price hikes. Why not a third for the crime of being born here?
I wouldn't mind the GST if prices for games weren't already exorbitant.

This is the real issue, steam has a funked up pricing system. They should either charge us the same as the US OR charge us in AUD. By doing USD in the higher price it's inflating the cost as their double dipping the greedy pigs. The ATO is not at fault for this nor are they wrong to demand these companies pay the same tax that other businesses do.

RicoADF:

Jandau:
Do you want piracy? Because this is how you get piracy...

By applying the tax that applies to everything else? Sorry but there's no way people can claim this isn't fair. Digital goods have avoided tax for years, this was bound to happen. As Steve said in the report, since most companies already charge full price they will just obsorb the cost as it was already apart of the price for physical goods. Companies just pocketed the difference previously.

Australia already has needlessly high prices on digital goods. Sure, you could argue that the tax isn't inherently unfair and that digital goods should be taxed like everything else, but does that matter to the consumer? No, it doesn't. All that matters is that that thing he wanted that was already quite expensive is now arbitrarily even more expensive.

And if you think that companies will "absorb" the cost, you are naive. I'm sorry, but that just doesn't happen...

Kingjackl:
Typical conservative taxation policy. Abbott/Hockey are almost guaranteed to lose the next election, it's really a question of whether or not Labor will have the spine to axe it.

Of course they wont axe it, Australia's political system is a piece of shit because it doesnt matter if you pick Labor or Liberal, they'll both fuck you over in the same way, its just the choice of who you want to be ramming into your anus.

Theres no choice, at least not a real one, Labor and Liberal argue only over the most trivial shit. Need I remind you that Labor voted for the metadata laws as well. If thats not the biggest reason for why every politician in this country needs to be pushed into the desert then I dont know what is.

I like to say that in Australia we dont have conservatives or liberals, we have assholes, and god damn it if they dont keep proving me right.

RicoADF:

Bernzz:
Oh good. A 10% price hike.

Because I wasn't already paying enough, given we pay in USD and sometimes our price in USD is higher than the American store.
And conversion from AUD to USD means we pay more ANYWAY.
So yeah, we already get two price hikes. Why not a third for the crime of being born here?
I wouldn't mind the GST if prices for games weren't already exorbitant.

This is the real issue, steam has a funked up pricing system. They should either charge us the same as the US OR charge us in AUD. By doing USD in the higher price it's inflating the cost as their double dipping the greedy pigs. The ATO is not at fault for this nor are they wrong to demand these companies pay the same tax that other businesses do.

Oh, I agree. As I said, I wouldn't be bothered if we were treated equally. I don't mind the GST blanket applying to everything, I'm annoyed because Steam already fucks us over and this just makes it worse.

Somekindofgold:

Kingjackl:
Typical conservative taxation policy. Abbott/Hockey are almost guaranteed to lose the next election, it's really a question of whether or not Labor will have the spine to axe it.

Of course they wont axe it, Australia's political system is a piece of shit because it doesnt matter if you pick Labor or Liberal, they'll both fuck you over in the same way, its just the choice of who you want to be ramming into your anus.

Theres no choice, at least not a real one, Labor and Liberal argue only over the most trivial shit. Need I remind you that Labor voted for the metadata laws as well. If thats not the biggest reason for why every politician in this country needs to be pushed into the desert then I dont know what is.

I like to say that in Australia we dont have conservatives or liberals, we have assholes, and god damn it if they dont keep proving me right.

As previously stated, this tax is just making the system more fair, especially for local producers. Without this, things will lead to more international business beating out the local. Which will lead to greater price because, as all ready stated, their policy is "Not America? Well screw 'em." If you want locals to compete with the internationals, then this is necessary.

I'm with Bernzz and RicoADF. When will our government fight for consumers?

trunkage:

As previously stated, this tax is just making the system more fair, especially for local producers. Without this, things will lead to more international business beating out the local. Which will lead to greater price because, as all ready stated, their policy is "Not America? Well screw 'em." If you want locals to compete with the internationals, then this is necessary.

I'm with Bernzz and RicoADF. When will our government fight for consumers?

Argue about how necessary it is all you want, not going to stop me and everyone else who is sick of being charged more just resorting to piracy. Rent, food, fuel, entertainment, its all just getting to the point where something is going to snap and a new tax that may be absorbed (naive optimism at its finest, they'll take the opportunity to hike the prices and then retail follows) even if it is 'fair' is just going to push more people into alternative, far cheaper options.

If the Government wanted to fight for the consumers they'd start addressing why companies get to charge so much extra here when, especially in the age of digital distribution, things like import costs and manufacture costs are not an issue anymore before they started adding more taxes.

Eh, the GST was supposed to be on everything except for essentials (this doesn't include tampons). It should have applied to this ages ago, it's an oversight being corrected.

Now, there are arguments to be made about high prices as it is, and piracy, but those are other issues.

The GST is exactly the kind of regressive tax we shouldn't have in the first place. It hits you harder as a percentage of your spendable income the poorer you are.

dumbseizure:
It would have been nice if, instead of putting this 10% tax on digital goods that affects everyone, maybe close that loophole that lets big companies pay significantly less tax than they should.

It's not really a loophole if it's intentional.

Whist this is very bad for consumers, and will set digital distribution back ( as that extra 10% was already there but the distributor/publisher took it). I think its totally fair that tax should apply to a digital good as well as a physical one.

The problem is the crazy base price for stuff in AUS ( and Europe) for digital goods vs the US, just look at the differences in steam pricing of US vs UK vs AUS.

https://www.steamprices.com/au/topripoffs
https://www.steamprices.com/uk/topripoffs

Thats insane!

So a fix to a problem looks bad because your already getting screwed over.

I'd say South Park's "Crying Koala" pic is a very nice way to sum this up. Nice job with the thumbnail. :3

This reminds me of a wonderful Penny Arcade comic I read somewhat recently...

image

If some of you guys actually read the terms and conditions of these services, you would know that most already do. Apple, GOG, Blizzard, Nintendo, Microsoft, Sony and if I read the legal jargon correctly Riot games already include and charge GST. As for Valve, they already have to do it in the EU for the VAT so it would be nothing for them to apply whatever they use for that to Australians. Yes, having prices rise is a bad thing but it will only effect a few services that don't charge it, like Netflix. Even then it's an increase of about AU$1. If you're looking for something to get mad about, how about the fact that they are cutting benefits for stay at home parents if favour of childcare subsidies.

Last thing to consider, I've checked and I've seen no evidence that this will apply to physical goods as it makes no mention of the GST import goods limit which for those of you playing at home is still sitting at AU$1000.

All I'm saying is don't lose your heads.

Disclosure: I'm not a fan of either Party. Abbott is an idiot. Shorten is ineffectual. Just thought I'd get this in before anyone says anything.

Ah, this is clearly to cover all the shipping and distribution costs. Fair enough. -_-

I just hope this doesn't make everyone turn around and look at the US and say, "Oh hey, they're not charging tax on digital goods either. We need to get on that!" One of the biggest benefits of Steam or GOG et al is the fact that with the price, what you see is what you get. Plus, the states don't have a unified tax %, so I imagine those of us with lower sales tax would end up getting screwed and slapped with a higher one than our state actually has anyway...

Yaaaay, digital future.

Sorry to hear this, Aussies. Maybe one day you guys won't be charged the Australia tax and have to pay double what we do for games if you don't shop around.

alj:
[snip]

That site/link seems to be broken.

EDIT: Okay it's not broken, just horribly optimized.

MrHide-Patten:
I remember when Australia used to be called 'the lucky country', as is it's just a whole where people dig holes and go to die.

I think I'll join my sister in the states eventually, just sort out that whole, 110% more likely chance of getting shot and I'll be more interested.

The whole 110% more likely to get shot still leaves the odds so statistically small that you can't really comprehend them.

OT: I love politicians. It's not fair that these people aren't being charged taxes and these other people are. THEY ALL NEED TO PAY MORE TAXES!

I live in New Jersey. Call me biased (as I am as is every person who has ever lived), but it always seems to me instead of finding new things to tax they should try to learn to spend their money better. In New Jersey, our shitty legislators purposely stopped working on the states bridges to try and strong arm the people into allowing them to increase the gas tax. Forget that they empty the transportation trust fund every year, a good portion of which does not go to the roads. So, I'm always probably gonna be ready for ratty politicians to do what's good for them and not what's good for the average person.

And this is likely to flow over to New Zealand...only here, it's a 15% hike!

RicoADF:

Jandau:
Do you want piracy? Because this is how you get piracy...

By applying the tax that applies to everything else? Sorry but there's no way people can claim this isn't fair. Digital goods have avoided tax for years, this was bound to happen. As Steve said in the report, since most companies already charge full price they will just obsorb the cost as it was already apart of the price for physical goods. Companies just pocketed the difference previously.

Bernzz:
Oh good. A 10% price hike.

Because I wasn't already paying enough, given we pay in USD and sometimes our price in USD is higher than the American store.
And conversion from AUD to USD means we pay more ANYWAY.
So yeah, we already get two price hikes. Why not a third for the crime of being born here?
I wouldn't mind the GST if prices for games weren't already exorbitant.

This is the real issue, steam has a funked up pricing system. They should either charge us the same as the US OR charge us in AUD. By doing USD in the higher price it's inflating the cost as their double dipping the greedy pigs. The ATO is not at fault for this nor are they wrong to demand these companies pay the same tax that other businesses do.

Precisely. Steam has been ripping us off for a long time with their double dipping. I have no problem with paying GST for digital purchases, because that's where the majority of media is heading, so they need to get on it at some point. But it would be great if they could also put the squeeze on companies to get fairer prices for us - last time they grilled Adobe in the Senate they almost halved the price of Lightroom overnight.

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