Foxtel backs government's 'Netflix tax'

Operator of rival streaming service Presto has given the government's move the thumbs up

Pay TV provider has backed a move by the federal government to levy the GST on online services and sellers of digital goods that have Australian customers.

The government expects to raise $350 million over four years with the measure, which has been dubbed a 'Netflix tax', after the high-profile US-based video streaming service that started serving Australian customers earlier this year.

"The government's move to enforce GST for the supply of digital content services is the right one," Foxtel's head of corporate affairs, Bruce Meagher, said in a statement.

"The digital marketplace is an increasingly competitive space and it’s critical to ensure that all players that do business in Australia do so on a level field, with no one player advantaged through tax loopholes.

"The introduction of this legislation will not only help to maintain consistency across the competitive landscape, but it will also ensure that Australia gets its due taxes from the companies that choose to do business here, which benefits all Australians."

Foxtel offers a rival on-demand service called Presto.

Excerpts from leaked research published by The Australian reveals that since Netflix's launch earlier this year Australian traffic to the service has eclipsed its rivals, including Presto.

"It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge GST," Treasurer Joe Hockey said yesterday.

The treasurer will introduce legislation to broaden the GST tonight.

The original GST legislation "did not anticipate the massive growth in the supply of digital goods, look movie downloads, games, and ebooks from overseas," Hockey said.

Greens communications spokesperson Senator Scott Ludlam earlier today criticised the move.

"It's not actually a tax on Netflix, it would be a tax on consumers; it's a tax on people," the senator said.

"Last time that issue was visited, Treasury told us that it would actually cost more to administer than it would collect in revenue. But that's the sort of modelling that we're going to need to take a look at," Ludlam said.

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