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

Steven Bogos

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Jan 17, 2013
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"Netflix Tax" Confirmed For Australia - Expect 10% Price Rise on Digital Goods


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 [https://www.steamprices.com/au/topripoffs] 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 [http://www.abc.net.au/news/2015-05-11/hockey-outlines-plans-for-tax-avoidance-crackdown-netflix-tax/6460848]. "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 [http://www.pcgamer.com/steam-prices-look-set-to-increase-in-australia-as-10-tax-hike-is-confirmed/]

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dumbseizure

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Mar 15, 2009
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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.
 

MrHide-Patten

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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.
 

Shinkicker444

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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.
 

Darks63

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dumbseizure said:
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 said:
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:).
 

ron1n

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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.
 

VanQ

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Oct 23, 2009
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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!
 

Evil Smurf

Admin of Catoholics Anonymous
Nov 11, 2011
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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?
 

Zontar

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Feb 18, 2013
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Shinkicker444 said:
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.
 

Zontar

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Feb 18, 2013
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MrHide-Patten said:
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.
 

chadachada123

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MrHide-Patten said:
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.
 

Charli

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Jandau said:
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.
 

Kingjackl

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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.
 

Bernzz

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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.
 

008Zulu_v1legacy

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Steven Bogos said:
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
 

RicoADF

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Jandau said:
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 said:
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.
 

Jandau

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RicoADF said:
Jandau said:
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...
 

Somekindofgold

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Kingjackl said:
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.
 

Bernzz

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RicoADF said:
Bernzz said:
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.