Consumers are baffled by the government’s stance on GST expansion.

As reported in Finance Friend, the Federal Treasurer Joe Hockey appeared to dismiss the idea of enforcing a goods and services tax on items bought through the internet. But this doesn’t (it turns out) appear to extend to streaming services.

On Monday the Australian announced the government’s reluctance to pursue the policy – fearing it would seem to appear overly greedy to the electorate. But this morning Fairfax Media were reporting the government’s intention to go ahead with the Netflix Tax in Tuesday’s Federal Budget.

The tax will see consumers slugged another 10 per cent on what they currently pay for movies, music, e-books and software. And it won’t end there, with the government looking to broaden the items applicable to the GST.

At the same time, Federal and State Ministers are discussing ways to lower the current $1000 GST threshold. As it stands, items costing less than $1000 attract no GST.

Assistant Treasurer Josh Frydenburg has said that broadening the GST to include internet bought goods will benefit Australian businesses. While it undoubtedly would level the playing field between domestic and international businesses it will also be a blow to Australian customers.

Mr Hockey has said he will reveal further details in Tuesday’s budget.

A spokesperson for Netflix said in April that the company was already preparing to add the cost of GST to its services. They only await the government implementing the changes.

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