The Government is in negotiations with the states and the Opposition to tighten rules governing the collection of GST from online and overseas media services.

Part of this plan may include lowering the $1000 GST threshold on goods bought online (No GST is currently charged on goods costing less than AUS $1000). Instead, one plan under discussion was to raise the GST without altering its 10 per cent rate on the items currently attracting the levy. This would be done by broadening the items attracting the tax.

And the number one target for Treasurer Hockey was overseas operators providing ‘intangibles’ – in other words, online movies.

Australia has been (and will continue to be) hard done by in the online media streaming industry. Giants like Foxtel own the airing rights to many current blockbuster TV shows and movies. As such, online providers can only offer Australian audiences older, previously aired content.

To make matters worse – these online providers are applying what has come to be known as the Australia Tax; a price hike on Australian consumers simply because they can get away with it. Efforts at proving collusion have been difficult as the providers do not reside in Australia and are not subject to its laws.

Furthermore, Australian who have previously been paid members of overseas streaming services are now finding their access blocked. Local service-providers are using Australian law to trap viewers and increase their market.

In short, Australian content streaming providers are already charging more than their overseas counterparts. They are doing this for inferior quality products. They are working to circumvent consumers from accessing cheaper, higher quality international content. And the measures the government are discussing will only help them do this.

Mr Hockey talked up the idea, saying: “I see those things as integrity measures for the tax base, not a broadening of the GST or an increase in the GST (rate).”

Oddly enough, support for the idea has come from Western Australia. The WA government have been long-time opponents of the GST, because much of the revenue collected by the federal government went to other states. But the recent collapse of the mining boom and the plummeting price of iron ore has the cash-strapped government looking for other sources of income – and they can now demand a larger slice of the GST pie.

Mr Hockey was all smiles. He agreed that a return of less than a third of the GST paid by West Australians failed ‘the fairness test’ and was “an issue for the Federation.”

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