You will pay the Netflix tax

We’ve done it before, and it appears that we’ll do it again, but maybe this time we’ve learned from the Mining and Resources Rent Tax and the Carbon Tax that have been previously established then abolished at great cost to the people.  Yes folks, the Government has suggested that this time it might be more appropriate to alter their existing tax vehicles to suit the modern day economy, introducing a tax on all things digital.  This new, proposed extension to the GST is being dubbed “The Netflix Tax” and frankly, it appears to go after many of the parties that are sitting in front of a Senate Enquiry for offshore tax avoidance this week.  But the reality is, it doesn’t – it just goes after you and me again.    And whilst to many of us who can see our public purse declining in size yet increasing in need; we ask how you feel about paying a 10% stipend on top of your digital and media purchases.

The funny thing about tax changes is that everyone wants someone else to pay it.  “If we point it at the big companies, we won’t feel it,” or so we thought until we all got a little bruised by the Carbon Tax.  “If we make the big profitable companies pay, our country will be better off,” we said until the Mining Tax made our mining companies unable to compete on the world stage amid declining Chinese buying power and our Internet companies allegedly worked out how to siphon billions through Singapore.

So if they make this new tax about scalping some more money from digital purchases, are we silly enough to think this is not just another way increasing our personal taxes? I guess we can all sit back and say “Ahhh the user will pay, and I don’t use much digital or streaming media, so it wont hurt me,” but I think this is all about to change.

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In my family, this week’s dinner party debates have been over the changing way we are all consuming media, and how everyone in Australia is set to start paying for media at a much higher level than we ever thought we would.  And, I suspect we’ll be happy to do so when the quality of media we are offered is so much higher than that which is available to us for free.

Take TV for example.  Once you get a taste of what Netflix has to offer, will you ever want to sit there at 9pm on a Wednesday night watching some god-awful reality TV show because there is nothing else on while you wait for Love Child to start at 9.30?  If it is $8.99 it is going to get a lot more viewers than Foxtel at the average price of $50 or more for a membership with a moderate number of desirable channels.  And it is likely going to draw away a lot of free TVs viewers and therefore, their advertisers over time decreasing their spending power and then their quality.

Or music.  Once you get a taste for what Spotify Premium offers you in unlimited access to all the songs you love from your past and all the ones from your future, live, whenever you want them, will you really want to mess around with CDs and trying to constantly upload music to your devices through your computer?  I dare suggest that it wont just be the younger generation who find streaming music incredibly desirable once they properly discover it.

Or media.  Once the next media-consolidation phase in Australia has take place when laws change later this year, will there really be any other players than the core two or three who will put an impenetrable paywall on quality news and make you value it well above the tabloid style trash-media they provide for free? There’s a reason why they are making such an incredible differentiation between the two.

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Or movies.  If you missed it, the first large copyright claim went out this week to any person who had illegally downloaded Dallas Buyers Club from the Internet.  This claim might be enough to put the willies through people who are now being offered other reasonable ways to pay to enjoy movies in home in our country, which frankly, until the last few weeks wasn’t altogether possible.

Australia is a little behind in being offered high quality paid for digital media, and yes, many of the companies that will offer it to us at the moment appear to have international ties and an ability to bill us from offshore avoiding the GST and allowing consumers to enjoy a little reprieve.  So do you agree with the introduction of a 10% GST on digital purchases? Is this the cleverest way to put some more money in the public purse? Or would you rather someone else pays?