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[Silentium]

I have heard analysis previously that indicated it would be near impossible to enforce and the cost of doing so would offset any extra revenue generated by the government.

My issue is that as a consumer this government is hell bent on gauging every last cent out of the vulnerable masses while ignoring, or in many cases subsidising, the outrageous profits extorted by those at the top of the pyramid.

The analysis I think you're referring to was with respect to lowering the $1000 physical import GST threshold. The analysis was predicated on GST collection occurring at point of entry into Australia, "if the low value threshold were reduced to (say) $500, the additional GST collected would exceed the additional administration costs that would be incurred. There would be a net revenue benefit as a result, but it may not be large — perhaps around $30 million per annum." But the report found, and as I would suggest, the long term solution is to place direct liability on overseas suppliers to Australia residents - in that case, collection costs for the government are minimal, and the threshold can be reduced to a nominal level ($20 or so, like in the UK and Canada).

Sales taxes help broaden the tax base and are a valid component of a country's tax regime.

You're missing the point.
The Australian government cannot enforce our tax laws on non-residents.
That's our law.

Australia can definitely pass a law requiring GST/VAT to collected on sales made by foreign entities to Australia residents. Major suppliers will comply as the collection of GST/VAT like this is not unusual throughout the world (Norway, EU, Japan, and others all collect from similar transactions) and compliance costs are minimal (EU estimated at €5000). If enforcement is necessary, confiscation and bans on imports can be used. The namesake of the proposal, Netflix, has already said they will comply if necessary.

The $2b figure is pulled out of someones ass and is not even remotely realistic. There's no way in hell there's $20bn in untaxed imports of intangibles per year. That would equate to 22m people spending $900/year. Each. What a load of horseshit. I'll start listening to arguments for this when realistic numbers are presented.

The figure comes from a report completed in 2012 for the Cth gov by former Premiers John Brumby and Nick Greiner, the figure they found was $1B, but some have estimated that the growth of online intangible sales to have increased since then (the $2B may be off I concede, but it is a decent amount p/a).

The problem with this is that the cost of collection results in a loss on the vast majority of purchases. There was a similar argument on GST for imported goods and the cutoff for profit was something like it only being worthwhile on shipments over ~$500.

The actual reason for blanket GST collection is protectionism/cronyism, ie it artificially increases the competitiveness of Australian companies (the truly sad thing is that in terms of digital goods we already suffer markup levels that mean even this isn't going to make them actually competitive).

As above, the collection is only an issue if completed at import by Custom and Border Control (and no ones looked at collection costs for intangible goods). We are talking about placing direct liability on foreign suppliers to collect and remit GST.

Collection of GST is about a level playing field. Other countries already force collection and remission of VAT/GST for similar sales, why should Australian entities be placed at a disadvantage?

EDIT: I'm probably not going to respond to people again. What I would suggest to people is that this proposal isn't unreasonable, it brings Australia in line with other jurisdictions, it protects the GST pool at a time of economic/budgetary pressures, and it will likely have broad political support.

 

[Chilli_Axe]

+10% to the price because it costs a lot of money to ship digital goods overseas to Australia

Also because fuck you

 

[toastyToast]

Are they going to reduce the prices of games then? 90 USD when the exchange rate sucks plus GST is fucking stupid

 

[CTLance]

My condolences, AussieGAF.

Fucking cunts

Ah, there's the reaction I was expecting somehow.

 

[Fasty]

It's Rupert Murdoch. He openly installed the current pm, used him to try to kill off the national broadband network to thus kill entities like Netflix that way, that only half succeeded. Now he wants to hit them via price all so he can keep charging insane prices for foxtell.

I know that sounds like a conspiracy theorist rant but do your homework, it's really happening.

Nothing this man does surprises me.

 

[numble]

This is it right here.

Sony, Microsoft and Nintendo maintain local operations because they need to market and supply physical goods. Maintaining the e-stores is a side effect of that.

Steam and Netflix don't. There's no one to tax within the Australian government's jurisdiction.

Have a look at the biggest investors in Australia by country. Cayman Islands is right up there with China. Why? Because we can't stop Australian companies selling stuff to themselves overseas.

This proposed tax is a stupid idea thought up by the stupidest treasurer we've had in history.

Do they have an Australian presence? No they don't. They don't charge in AUD either. That proves to me they're a foreign entity. A foreign entity is under no obligation to collect tax for the Australian government for a transaction that takes place outside of Australia. That's all it comes down to in the end.

Countries impose taxes on foreign entities all the time even if they don't have a local presence. Royalty payments, service fee payments and dividend payments are the most common taxes, but VAT/GST is also collectible. It is also very easy to enforce against big entities, even if it is practically difficult to enforce against every entity.

 

[Yrael]

But...we already have the "Australia Tax."

:|

 

[numble]

The actual reason for blanket GST collection is protectionism/cronyism, ie it artificially increases the competitiveness of Australian companies (the truly sad thing is that in terms of digital goods we already suffer markup levels that mean even this isn't going to make them actually competitive).

You really need to read into how VAT/GST work in practice if you think imposing the same tax on all goods/service to a resident irrespective of provider origin is protectionism/cronyism.

High import/custom taxes, imposing a higher tax on foreign entities doing business, are what would be considered protectionism/cronyism.

 

[M3d10n]

I don't see how they can possibly police this. For physical goods you can hold it at the border, intangibles are going to be a honesty system at the very best. No foreign entity is under any obligation to collect tax for the Australian Government.

Politicians entertained the idea here in Brazil, but it got shot down for that exact reason: there is no way to collect it.

 

[Edsmells12345]

I know Apple already factors in the GST when buying stuff from iTunes/AppStore. Wonder who else does.


lmao

Booo!

 

[Durante]

It's Rupert Murdoch. He openly installed the current pm, used him to try to kill off the national broadband network to thus kill entities like Netflix that way, that only half succeeded. Now he wants to hit them via price all so he can keep charging insane prices for foxtell.

I know that sounds like a conspiracy theorist rant but do your homework, it's really happening.

That doesn't sound like a conspiracy theory, that sounds like business as usual.

 

[thunder_snail]

Tax where money flows. Politics 101.

 

[joetachi]

i doubt australia is harder than living in africa

 

[Randy Monk]

i doubt australia is harder than living in africa

But, but, but video games cost more! Woe is me, crikey now I can't afford to throw any more shrimps on the barbie so I'm planning my escape to another country where Rupert Murdoch is not my Overlord.

 

[Elaugaufein]

You really need to read into how VAT/GST work in practice if you think imposing the same tax on all goods/service to a resident irrespective of provider origin is protectionism/cronyism.

High import/custom taxes, imposing a higher tax on foreign entities doing business, are what would be considered protectionism/cronyism.

I understand the theory of how VAT/GST work.

I'm not sure if you're aware of the concentrated effort by certain companies to increase the cost of imported goods, while the Dollar was strong, so that they could preserve their markups (our prices basically remained constant despite the high dollar). It was sort of a questionable proposition though, since even 10% + Custom Fees would still have been cheaper than the markup. It was often cheaper (especially for electronics) to import from the US with Express Shipping than to buy locally. So the main argument that it would have helped their margins was basically a mental effort (not saving enough to be worth it) / inconvenience (having to deal with customs) one.

 

[jwhit28]

Do Australians currently pay no tax at all on digital goods? In North Carolina I pay a tax for digital downloads on Steam, PSN, eShop, etc.

 

[HowZatOZ]

Do Australians currently pay no tax at all on digital goods? In North Carolina I pay a tax for digital downloads on Steam, PSN, eShop, etc.

No, we don't. However our prices are inflated for no real reason but "Australia," meaning a typical $50-$60 game in America is $100 here in Australia (though it has gone down to $90 on occasions).

 

[numble]

I understand the theory of how VAT/GST work.

I'm not sure if you're aware of the concentrated effort by certain companies to increase the cost of imported goods, while the Dollar was strong, so that they could preserve their markups (our prices basically remained constant despite the high dollar). It was sort of a questionable proposition though, since even 10% + Custom Fees would still have been cheaper than the markup. It was often cheaper (especially for electronics) to import from the US with Express Shipping than to buy locally. So the main argument that it would have helped their margins was basically a mental effort (not saving enough to be worth it) / inconvenience (having to deal with customs) one.

How does the pricing that these companies choose to price at have to do with protectionism of local companies?

I don't think you understand how VAT/GST works if you think requiring collection for imported goods/services at the same level of local goods/services does not amount to protectionism. If they wanted to do a protectionist move, they would subject offshore providers to an extra import or customs tax that local providers are not subject to.

 

[DXLelouch153]

why would you even live in austraila
everything wants to kill you
and shitty prices for everything

 

[Maximo]

why would you even live in austraila
everything wants to kill you
and shitty prices for everything

Were barely surviving, personally moving in a few years.

 

[Elaugaufein]

How does the pricing that these companies choose to price at have to do with protectionism of local companies?

I don't think you understand how VAT/GST works if you think requiring collection for imported goods/services at the same level of local goods/services does not amount to protectionism. If they wanted to do a protectionist move, they would subject offshore providers to an extra import or customs tax that local providers are not subject to.

TL;DR: I think actions taken specifically for protectionist/cronyist reasons are protecionist/cronyist even if otherwise justified.

why would you even live in austraila
everything wants to kill you
and shitty prices for everything

In terms of the big picture of our economy most of our prices are actually fairly reasonable compared to our wages (we have both a higher minimum and much more regulated industry awards than even the Democratic party in the US would propose). There's a few areas where prices are completely out of whack (primarily housing and imported goods that require little little or minimal local effort).

 

[Corpekata]

Do Australians currently pay no tax at all on digital goods? In North Carolina I pay a tax for digital downloads on Steam, PSN, eShop, etc.

Most states in the US don't pay tax on digital goods unless the company is located in that state. I pay it on Amazon digital games in AZ because they have a warehouse here but not on any of the other platforms. NC is one of the few exceptions.

 

[numble]

TL;DR: I think actions taken specifically for protectionist/cronyist reasons are protecionist/cronyist even if otherwise justified.

I don't see you summarizing any longer piece of explanation.

It is silly to say that a level playing field is protectionist.

Under your reasoning, TL: DR: if foreigners or people born overseas were free from income tax because of some loophole, and Australia made it that they paid Australian income tax on Australian source income, you would think it is protectionist/cronyist?

 

[zogged]

So not only do he have to deal with inflated prices given to us in USD (currently the Australian dollar buys something like 73 US cents) which ups the already higher price by about 30%, but we also have to look forward to dealing with another extra 10%. You know what, fuck it. I'll just keep buying stuff off nuuvem and avoid steam unless sales are happening.

 

[2SeeKU]

New Zealand is basically Australia right. Couldn't we just buy in Kiwi prices without the tax?

 

[Ghazi]

What the hell? Australians already get shafted with ridiculous pricing. That absolutely blows.

 

[Elaugaufein]

I don't see you summarizing any longer piece of explanation.

It is silly to say that a level playing field is protectionist.

Under your reasoning, TL: DR: if foreigners or people born overseas were free from income tax because of some loophole, and Australia made it that they paid Australian income tax on Australian source income, you would think it is protectionist/cronyist?

The point isn't a level playing field, the point is to make local businesses look better despite their rather high profit margins (and evidence of this was clear in that they supported an import tax regime that would have cost the government money because of collection costs on this basis) . If the point was a level playing field, I'd be much more supportive of this but its a pretty transparent effort to throw a bone at certain businesses. My objection is not to GST on software or imports in principle, but the reasons why this is being done now.

Almost certainly not because I have a really difficult time coming up with a scenario that parallels the local context (or how that could be protectionist/cronyist, though I could see some parallel arguments based on being nationalist if I squint).

 

[MarionCB]

Another stupid idea from the worst, most corrupt and outright incompetent Government we've ever had. So many things wrong with it, but the killer is that it will almost certainly cost more to enforce than will ever be collected. This has all been researched before and they know it. It's pure protectionism for the dying, obsolete Cable/TV businesses of Murdoch and his ilk, as was killing the National Broadband network and the current draconian rewrite of copyright enforcement, and a significant reason for the mandatory metadata collection we now enjoy.

The sooner these cunts are history, the better.

 

[Phat Michael]

I seriously cannot wait to leave Australia.

Everytime I hear news about this country, it's always bad

I left Australia in 2004. I've been back twice since. I won't go back again. I can't stand the country. The only thing that ties me to it is sports.

 

[numble]

Almost certainly not because I have a really difficult time coming up with a scenario that parallels the local context (or how that could be protectionist/cronyist, though I could see some parallel arguments based on being nationalist if I squint).

So you would be okay with foreign businesses operating in Australia and not being charged income tax? That is interesting.

 

[jambo]

why would you even live in austraila
everything wants to kill you
and shitty prices for everything

Our wages are also much higher.

Our minimum wage is like $17

 

[SmartBase]

The only people to blame for high digital prices are the geniuses who keep buying at high prices.

The proposed tax itself makes sense.

Another stupid idea from the worst, most corrupt and outright incompetent Government we've ever had. So many things wrong with it, but the killer is that it will almost certainly cost more to enforce than will ever be collected. This has all been researched before and they know it. It's pure protectionism for the dying, obsolete Cable/TV businesses of Murdoch and his ilk, as was killing the National Broadband network and the current draconian rewrite of copyright enforcement, and a significant reason for the mandatory metadata collection we now enjoy.

The sooner these cunts are history, the better.

A cute sentiment (among many in this thread), but who put these cunts in power?

 

[Falcs]

A cute sentiment (among many in this thread), but who put these cunts in power?

Uneducated IDIOTS who ate up all the bullshit liberal promises leading up to the election and voted for this cunt of a PM because "it's time for a change".

 

[Elaugaufein]

So you would be okay with foreign businesses operating in Australia and not being charged income tax? That is interesting.

No. That's the opposite of what I said.

 

[moffattron9000]

New Zealand is basically Australia right. Couldn't we just buy in Kiwi prices without the tax?

Don't worry, they'll fuck over New Zealand as well. I don't know how, but they will.

Hey Australia, can you fix your government already. We catch too much of the spillover across the ditch.

 

[Elaugaufein]

Sorry, NZ , we've still got another ~18 months to go (and its not impossible we'll break it further then instead).

 

[captainraincoat]

Our wages are also much higher.

Our minimum wage is like $17

And you have a government who wants to lower it but not lower any of the life essentials Like electricity/gas/fuel ...a roof over your head

How are people meant to live??

 

[Rizzi]

Don't worry guys, it's not a tax, it's a levy.

Spoiler

/s

 

[Laconic]

Steam bending Australia over so hard, its going to be known as the Land Up Over, of video games. :/

At least you got the N3DS first.

 

[Etria]

How?

Why would collecting the broad, standard sales tax stagnate consumption of digital markets? Europe is now collecting VAT on these purchases, Japan has introduced similar legislation and Canada/NZ are considering similar changes to their own GST/VAT laws.

Like many have mentioned, digital prices are essentially higher than that in other countries, like on Steam where they recently introduced the local currency, but effectively marked up the prices by 'justifying' that it more accurately reflects the market, etc. But in effect, they became worse, and are now act as deterrance for consumers.

Because we already pay a ridiculous price when it comes to online goods because "Australia" and adding GST on top is going to push people further away.

Pretty much. In NZ, it's much the same as with Australia except that we have relatively lower wages and even higher digital prices to say the least. Definitely doesn't promote digital consumption of products.

NZ always gets left out in these maps. We can't just get lumped together with Australia ;P

So the eShop is going to be get more expensive? Fuck.

If that's the case, people will be even more put off by those prices and just buy physical. My god :O

Yeah, both Aus and NZ suffer heavily from the "fuck you" publisher tax. If GST is introduced on digital games, it SHOULD take its cut out of that but they probably won't, not when publishers have an easy excuse to just raise the prices higher.

I foresee that publishers may well want to maintain their marked up pricing and be in favour of the government just adding the digital GST on top :/

New Zealand is basically Australia right. Couldn't we just buy in Kiwi prices without the tax?

Well, nothing is stopping you from doing so, but I suggest not to because of the exchange rate and the fact that NZ pricing is even higher than in Australia, so essentially you'll be paying the same or slightly higher price, provided the NZ government doesn't also decide to implement a digital tax. They are seriously contemplating it at the moment.

Don't worry, they'll fuck over New Zealand as well. I don't know how, but they will.

Hey Australia, can you fix your government already. We catch too much of the spillover across the ditch.

Yeah, I echo your sentiments. It seems that whatever Australia implements in terms of legislation and such, we tend to get quite some consideration on the NZ end by the government. Man, I wish they could just think this through more. It really alienates consumers, and in this day and age, so many people are buying digital goods. It's going to be a bloodbath :/

 

[primasaurus]

I'm happy to pay my taxes, it's for a better society after all

High taxing countries = good services (Northern Europe)

Low taxing countries = poor services (US)


Australia is having an issue with income, not enough to pay for services, therefore taxes need to be added, this steam tax(long over due) is one small piece in the tax puzzle, everyone needs to contribute

 

[Dryk]

Don't worry, they'll fuck over New Zealand as well. I don't know how, but they will.

Hey Australia, can you fix your government already. We catch too much of the spillover across the ditch.

Don't blame me, I voted for Thanos

I foresee that publishers may well want to maintain their marked up pricing and be in favour of the government just adding the digital GST on top :/

Well the mark-up applies to RRP so they'd have to either increase the cost of physical goods, or create a separate price for their digital goods and increase it higher than physical goods. I wouldn't put either of those things past some companies but it seems like it wouldn't turn out how they want it to.

 

[danm999]

The real issue for these Australian streaming companies isn't that Netflix is a dollar or so cheaper in SD. It's that they don't, and increasingly won't, have the catalogues to satisfy demand.

Hundreds of thousands of Australians already pay more for US Netfix using VPNs and DNS services in amounts that well exceed 10% of Netflix's subscription fee.

In attempting to level the playing field, all Newscorp and Fairfax and whoever else are doing is making things worse for the consumer.

 

[MarionCB]

Uneducated IDIOTS who ate up all the bullshit liberal promises leading up to the election and voted for this cunt of a PM because "it's time for a change".

Pretty much the answer. To be nicer about it, the LNP lied about almost everything in their campaign and now their true nature shows, they haven't a hope in hell of being re-elected, and wouldn't have been elected in the first place. People were silly enough to be duped, alas.

 

[bharatiyedu]

Pretty much the answer. To be nicer about it, the LNP lied about almost everything in their campaign and now their true nature shows, they haven't a hope in hell of being re-elected, and wouldn't have been elected in the first place. People were silly enough to be duped, alas.

It had more to do with the fact that, people were sick of labor and needed some form of change.

 

[lastplayed]

Don't worry, they'll fuck over New Zealand as well. I don't know how, but they will.

But how are they going to compete by adding 15% GST to a game that's already $120, when the Warehouse comes along and sells it (with GST already included) at 89-99 bucks?

 

[10k]

Man, I'm Canadian but don't Australians get fucked up the ass enough? They're prices are already ridiculous lol.

 

[Dryk]

It had more to do with the fact that, people were sick of labor and needed some form of change.

The most annoying part is, the next time Labor is doing something stupid the same thing will happen. People will say "I want them out, and how bad can the Liberals be?" because they always forget the answer to that question.

Man, I'm Canadian but don't Australians get fucked up the ass enough? They're prices are already ridiculous lol.

We don't get fucked because of taxes though. Digital purchases and physical purchases of games are typically $80-$100 but currently 10% of that in GST (which is included in that price mind) on physical purchases.

Although because our currency's down the shitter lately it's not so bad for retail games because the prices are still pretty stable. New release games are still ~$89 but that's only worth 70USD right now instead of the full 90.

 

[Vibranium]

Man, I'm Canadian but don't Australians get fucked up the ass enough? They're prices are already ridiculous lol.

Yeah, us Canadians have it good compared to Australians. At least our dollar could still rebound and prices might go back down.

 

[Phat Michael]

Our wages are also much higher.

Our minimum wage is like $17

Yep. And your cost of living is absolutely ridiculous. Sydney, Melbourne, Perth etc are so expensive.