News October 27, 2015

NSW Premier’s 15% GST proposal means we’ll pay more for digital services

Former Editor

NSW Premier Mike Baird has announced he is pushing for the Goods and Services Tax to be raised to 15%.

In May this year it was revealed Australians would pay an extra 10% for digital goods bought on any streaming platform, such as music, movies, games, software and ebooks. The bid to raise $350 million over the next four years, which media dubbed the ‘Netflix Tax’, was included in the government’s 2015 budget as an extension on the tax applied to "intangible" services.

Today, the Leader of the New South Wales Liberal Partyposted a video to Facebook where he stated: “This week, as the Premiers and PM gather, I’ll be proposing increasing in the GST to 15% with all the extra revenue going to healthcare and compensating lower income earners so they are no worse off. It won't be popular. But tough decisions rarely are.”

Baird cited rising health costs as the reason behind the proposed lift from 10% to 15%. In the clip he notes, “In 15 years from now, we face a $35 billion funding crises that threatens to end healthcare as we know it.”

Baird said the extra revenue would compensate lower income earners whose households are on less than $100,000 a year.

Prime Minister Tony Abbotthas already spoken out in support of Baird’s proposal. SMH reported he stood alongside Baird at the launch of stage 2 of Westconnex in Sydney today and said: "What we have today is a very sensible proposal from the NSW Premier following on from the sensible suggestions from the South Australian Premier."

As reported by SMH, Victorian Premier Daniel Andrews rejected the GST lift. He said: "My position on the GST is very clear one – I will not be supporting an increase in the rate of the GST or radical changes to the sorts of goods and services that basically attract the goods and services tax."

As previously reported, the so-called ‘Netflix Tax’ will target 30 companies when it comes into effect onJuly 12017.However the tax won’t increase the price for iTunes purchases because Apple customers in Australia already pay GST on downloads.The tax also won’t apply to online purchases that cost under $1000, as it currently stands. However it will increase the cost of Netflix in Australia to around the same price as locally-owned services Stan and Presto, which already charge a tax.

Baird will put forward hisproposal to a tax summiton Wednesday. In attendance will beTony Abbott and state and territory leaders.

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