Australians enjoying newly introduced streaming service Netflix are set to see prices on the platform rise by a further 10% after it becomes eligible to have the GST applied as part of the Federal Government's forthcoming 2015 budget.
Netflix's Australian rivals, Stan and Presto, are already subject to the GST, and will be unaffected by the change. But the US-based service's exemption has so far allowed it to undercut its competition — its base price of $8.99 a month is about a dollar less than either of the other services — leading some commentators such as News Corp's Julian Clarke to call for a more "level playing field".
Thus, as News Corp reports, customers who regularly use the internet to purchase goods and services from international retailers will, all going to plan with next Tuesday's budget, see a price jump for movies, TV shows, music, programs and books — those outside the iTunes Store, anyway, which already falls under the GST's purview, as do any imported parcels worth more than $1000.
That, too, looks set to change, with Fairfax reporting that Assistant Treasurer Josh Frydenberg, who "championed" the ushering in of the GST on online goods and services, also wants to reduce the threshold of GST eligibility for low-value packages, as in locations such as across Europe and in Canada.
However, this has already drawn criticism from some corners, with University Of Sydney law professor Rebecca Miller telling The Financial Review: "Australia would be ill-advised to follow the same path as the EU — imposing a GST on micro-businesses supplying, for example, two or three knitting patterns a year to customers in Australia."
Of course, the news of the so-called Netflix Tax doesn't come entirely as a surprise — last month, we reported that Federal Treasurer Joe Hockey had pitched the idea during April's Council On Federal Financial Relations meeting with the state and territory treasurers, saying at the time that "there is no doubt" that applying the GST to "intangible" online products and services would result in a boost to overall revenue representing "billions" of dollars.
