Importing Video Games To Australia Is Going To Get 10% More Expensive

State and Federal treasurers have agreed: the existing $1000 threshold for GST-free purchases on online goods is to be abolished. From the 1st of July 2017 all goods bought online will be subject to a 10%.

This includes, of course, video games.

How are they going to enforce that? Well, therein lies the rub. No details have been made available as to how this tax will be applied or enforced but in principle it will exist.

It is an attempt, says Treasurer Joe Hockey, by the government to level the playing field for Australian brick and mortar retailers.

Treasurers agreed to apply the GST to offshore sales into the Australian market. This is a significant initiative. From the 1 July, 2017, the GST will be applied to all products and service sold by vendors into Australia. This will deliver competitive neutrality for Australian businesses, and ensure fair and equal treatment of goods and services. If goods and services would have the GST applied in Australia, then the same should apply for goods [bought and imported] from overseas.

Hockey claimed that abolishing the tax-free threshold, as opposed to establishing a new limit, made sense. He also added that this is about policing vendors, not punishing consumers.

But, ultimately, it will be consumers who pay the price with this new change.

This, combined with the struggling Australian dollar, could herald the end of purchasing cheap online games from overseas stores.

Thanks Gizmodo


Comments

    If Steam continue to sell games in USD and have 10% GST, don't think I'll ever buy a game from Steam again.

      This will cause soooooo many more problems then it will fix.

    still cheaper than buying locally

    Edit: though im kinda tempted to go to my one term wonder local MP and tell her about all the publishers that have been charging an extra 10% on digitial goods sold to us

    Last edited 21/08/15 3:39 pm

      This is exactly my problem - it's not going to boost domestic sales as people will still import, all this will achieve is giving the govt some more $$$ so they can talk about how great their economic policies are going. Even my first year microeconomics knowledge tells me that this isn't a good idea; it'll do more damage to consumers than it will benefit the government.

        its funny cause hockey doesnt even know how they will get the gst from overseas corperations

        I have others, slightly less convenient but still cheaper options. This won't increase domestic sales it'll just makes sales more grey. Or, which is also possibly more likely, encourage even MORE piracy.

        The cost of things is one big reason for piracy, making things cost more won't make people by locally, they will either eat the cost and by internationally (netting the government taxes but not making any more domestic sales) or it will encourage further piracy, in which everyone (who cares) loses.

      Correct, but it becomes so small a saving, you wonder if it's worth it.

      Example: MGSV on PS4 bought from Amazon
      Items: AUD 84.91
      Shipping & handling: AUD 13.42
      Total before tax: AUD 98.33
      Estimated tax to be collected: AUD 9.83
      New Total: $108.16 AUD

      EB Games Price - $109.95 AUD

      So your savings will be $1.79... IF there isn't an additional cost added to the item due to processing and collection of that 10% GST

      (Someone pointed out and then deleted that Ozgameshop has the game at $73.99 with free shipping... Forgetting to add the 10% GST. The new price for the game would be $81.38 at the 10% GST price. A lot better saving than Amazon to be sure, but who wants to wait 2 weeks or more for the newest games? Ozgameshop is a very slow business when it comes to shipping.)

      Last edited 21/08/15 4:23 pm

        except who's buying it from Amazon?
        ozgameshop
        $73.99 with free postage....

        So 10% gst, $7.39

        $81.38 from ozgameshop

        JB are selling it for $89

        Last edited 21/08/15 4:08 pm

        is this the standard edition of the phantom pain? If so JB has it online for $89 AUD

        I've got a massive backlog, so I don't mind the wait. Indeed, I should really stop buying games at launch, even from ozgameshop, because I could get them cheaper when I actually get around to wanting to play them :-P

        lol, who buys games from EB anymore?

        MGSV from JBHiFi is $89

          People like myself without access to JB

            you can order stuff online from them

              Yeah fair point, never knew that. Aslong as postage is decently priced.

                Most of the time a single game or DVD is like 99c shipping, most ive seen when buying from their website was $2.50 for a vinyl. (should state that different shipping methods and locations probably change that)

        So buy it digitally on US PSN using US point cards using an account with a US address. No GST. No shipping & handling. $59.99 US = $82.12 AUD right now.

        If anything this will encourage region spoofing / VPNs and digital purchasing.

          I give it like a year before everyone is on VPNs anyway, a lot of people who know what they are doing are already and those that aren't as savy will be into it soon.

          Couple questions about that: if I am playing a game using a US psn account, does that limit who I can play with online at all? Will there be any problems if it is obviously on a AU ip address?
          And if I buy a game with the US account, could I then play it using a AU account on the same console?

            The way PSN works, you can buy the content on your US account and play it on the AU one. At least on consoles. I swapped to US as my main account because only one account per system on Vita.

            The only thing that this doesn't apply to that I've found is Final Fantasy XIV, but that's because your PSN account name is tied to a Squenix account that manages your subscription.

        Example: Any game on PC: lots of cash
        now after this idiocy: lots of cash +10%

        Software pirates in Australia: already plenty, thanks to OZ Tax
        Software pirates in Australia after this idiocy: +10x10%

        Effective income for brick and mortar stores increase for now being competitive: minus a lot.

        And then people wonder why we pirate....

          I concur. I don't have money to spend on games now and I feel that the pinch is more than just me - I buy no games at full price anymore, and generally wait for humblebundles or steam sales simply because there's no possible way I can afford it. Things are tougher financially than they've ever been for a lot of us.

        Bought from the US PlayStation store with a fake US address in a tax free state using PlayStation gift cards though? Nailed it. Don't pay tax now, wont pay tax after this.

      +1

      Still gonna be many times cheaper then bricks and mortar stores for PC games. Steam sales will be awesome even with 10% and goodluck forcing kinguin and g2a to pay tax.

    Australians: Wow. Australian retail is expensive. Lets take advantage of living in a free-market economy & spend our money online, where services & products are cheaper, as is our right in a free society!

    Hockey: Not. Fucking. Likely.

      Don't be silly. That "free trade" stuff is only supposed to benefit multinational corporations, not us. That's why they're still allowed to have region locking even between countries that supposedly have "free trade" agreements.

        You know if they spent some effort getting the huge corporations to actually pay their god damn fucking taxes, they could just not worry about this at all.

        But instead of looking to get billions in taxes from things like apple and google they choose instead to levy further taxes on their citizens.

        And here i thought the government was supposed to be out to protect us, not them.

        But fuck me, right?

        Our FTAs have only ever been for exports not imports. we trade everything we have just so our exporters dont have a tariff

      I was looking at a pretty appealing entry home theatre setup. $1100 on Amazon. RRP in Australia is $3000, and the distributor can't even be bothered to import it. wtf.

    I'm fine with paying the 10% if it is done during the checkout process, even with the low aussie dollar if you add 10% it's likely still cheaper than buying locally.

    But if I have to lug myself down to the post office to pay the GST in person (and whatever other charges they decide to throw in) then no thankyou.

      That'll depend on the company. Amazon, from the look of their site 5 minute ago, will charge you a GST at checkout. This might be the approach for a lot of the bigger companies. For the smaller ones that don't register to do the processing and all that... Yeah, your package will probably be held to ransom at the local post office.

      This is how they enforce the frankly ridiculous VAT gouging (remember, GST could always be worse - minimum over there is 15% and max is 27%) that goes on in the EU on packages, so I'd imagine it'd work that way here too.

      One of the ways European businesses get around it is by shipping from within the EU, so VAT on the delivery isn't paid because the item didn't come from outside Europe. I expect some of the bigger retailers will set up schemes like that too. OzGameShop already ships Australian orders from a warehouse in Melbourne as it is.

        That wont work though, we don't have a multi member state union of nations. We're just Australia. Australians shipping within Australia still pay tax.

        Last edited 21/08/15 10:39 pm

    How are they going to enforce this? Short of packages being held to ransom I don't see how.

      You are not far off the proposed "solution" for physical goods

      Last edited 21/08/15 3:49 pm

      It'll go back to the days of packages being marked as 'gift' and not having an invoice attached. But really, this is aimed at the bigger retailers such as Amazon, Book Depository etc. I'd say that ozgameshop would be caught, but their prices have gone up significantly with the weakening Aussie dollar, so for me this just means waiting for game prices to go down and buying less new-release games.

      Thats exactly how they'll do it. Either the company bills your for GST at checkout, but the smaller companies can't or won't, and you'll get a letter from the post office asking you to come down and pick up your package and pay the fee there. Don't want to pay? You don't get your package.

      That simple.

    Based on what we know now, how will this affect the following scenarios:

    A) I buy a physical copy of A Game from an overseas retail site

    B) I buy a download code of A Game from an overseas retail site

    C) I buy a digital copy of A Game from PSN (AU region)

    D) I buy a digital copy of A Game from PSN (some other region)

    Now, the question now must be asked:

    Will video games and associated items sold locally in this country become more expensive?

      A) You will incur a 10% GST on top of the total (item + shipping costs)
      B) You will incur a 10% GST on the code itself
      C) No Change
      D) No Change (However, you'll probably cop a 10% GST on the cost of the PSN cash card thing if you go that way)

      Will video games and associated items sold locally in this country become more expensive?
      No. They already have the cost of GST already worked into the price.

      Last edited 21/08/15 4:05 pm

        Not sure. Last time I purchased from PSN I noted there was a section on the checkout for 'Tax' that said $0.00. If Sony aren't prepared to eat the GST cost then they will pass it on to us.

          No company will "eat the GST", PERIOD. Prices are going to go up, not just by 10% for the GST, but also for processing and collection of the GST. Things are about to become a lot more expensive, to the point where online retail becomes pointless.

            Not sure about not eating the GST either. We saw from the inquiry into Australian pricing that the big overseas companies are pricing the products at 'what the Australian market will bear', meaning that they determine the overall price and then derive whatever margin they can get away with. I think that in particular new release games on PSN will not see a 10% increase - they are already up around what bricks and mortar retailers like JB and EBGames are charging. Rather I think that we'll see a mixture of the GST being absorbed by the seller in some instances, passed on in others (to a greater or lesser extent).

              already "up around what bricks and mortar are" no they obliterate that. new release games are $68 from target, $99 on PSN

                Haven't been to Target in a while but do they get all the new releases or do they mainly do the Skylanders/CoD/Halo stuff? If they get JRPGs I'm in like Flynn.

        Just one minor correction, based off the proposed "solution" for collection the GST from physical vendors not willing to collect on our behalf:
        A) You will incur a 10% GST on top of the total (item + shipping costs) +Item Pickup Charge

          The funny part is that item pick up charge... whatever it ends up being... say $10? That's $10 being taken out of my pocket that I no longer have available to spend on other items from local retailers. So who, exactly, is winning here?

            If I had to guess, and taking tax breaks and negative gearing into consideration, I'd say the rich people are winning. Like always.

            The truly worrisome part....
            If the product is $20, we pay +$2 GST on the "goods"
            Is the Shipping is $10, we pay +$1 GST on the "service"
            If we then have to pay another $10 pickup charge, does that not equate to yet another $1 GST for that service?

            In effect, we could conceivably be talking very, very, large increases is costs.
            That $20 has just become $44, a (roughly) 120% increase

              Well I guess we need to find something to spend all that money on that we've got burning a hole in our pockets since the removal of the carbon tax. Hey here's an idea - let's spend it on more tax! :P

                Redistribution of wealth my friend, redistribution of wealth.
                Joe's gotta be able to get some cash to pay for those stogies he likes so much :oP

        D shouldn't incur a 10% GST charge if you buy the cards digitally from the right places in the right ways.

        (By which I mean, Amazon US cards using a US billing address on a prepaid visa card)

        They'll probably knock the price up locally though since we're now a captive market and don't get a choice in the matter. Before they had external pressure to try and force them down a little, now there's absolutely nothing stopping EB and JB from adding an extra $10 onto every game in the store. Don't like it? Doesn't matter.

    Yay, lets punish common people for purchasing overseas... meanwhile lets ignore big businesses who move their profits outside of Australia.

    And suddenly everyone in Australia gained an extra few dozen Uncle Johns and Aunty Janes that happen to live overseas?

    Netflix just got 10% more expensive. Thank you Joe and Rupert for "evening the playing field"!

    How?

    How are they gonna do it?

    Are they going to block any overseas site that doesnt charge gst for australia?

    Are they going to force financial instutions to figure out if the purchase is going to an over seas bank account?

    Are they going to open every single piece of mail from overseas, work out the dollar value, then send the consumer the bill?

    Who collects the gst from these overseas retailers? do these retailers send a ledger to the aus government of all aus buyers, then the government taxes them?

    What about goods i can buy in australia that dont attract the gst, are they still going to be charged gst if purchased from overseas?

    Havent studies already been done that showed that applying gst to online overseas purchases will cost more to implement and run then the gst raised?

    How exaclty are they going to do this?

      They will open random packages (somewhere between 1% and 10% according to different sources) and then hold the package for collection after you pay GST plus a collection fee. It is totally inefficient for parcels worth under about $200, costing more for them to check/collect the tax than the value of the tax they collect. It is pure protectionism.

        It is totally inefficient for parcels worth under about $200, costing more for them to check/collect the tax than the value of the tax they collect

        No, you see what they'll do, as you said, is charge ANOTHER tax/fee/levy/whatever you want to call it on top of that to cover the cost. So you'll go to collection your $200 package, you'll pay your $20 GST and then you'll pay ANOTHER fee on top of that to cover the costs involved in storing your package and collecting that $20 GST from you.

        The collection fee will cover the cost, and thus make it "efficient" (for them).

        Last edited 21/08/15 4:39 pm

          So the moral of the story is to choose shipping with insurance but no tracking number, so that if it gets 'lost in the mail' you can get a refund :-P

            Actually, I'm thinking the best course of action is for us, as consumers, to protest.

            Once this comes in, we all go online and order a bunch of cheap shit off eBay or whatever... you know... a whole lot of useless little $2, $3, $5 items. Things of negligible cost, let them clog up the system and just don't go collect them. Let the whole thing come to a creaking halt as they open, inspect, hold onto and eventually have to dispose of all of these useless packages

    Just my opinion.
    Scenario B will be unlikely as it will be fairly impossible though we may stop getting gmg extra discount.
    Scenario D will probably rely on the different regions tax law, though maybe we could see taxation because you are using your credit card to buy the product or buy the code e.g. from amazon.
    A and C, will likely see an increase in price as A, seeing it will need to go through customs and C, because I'm sure the companies will make up some excuse

    Items locally will definitely not get cheaper, why would they with less competition, it 'should' not cause an increase in price but I can easily see games being back to $100+ (right now $80-100 for new console game).

    The government will do nothing then either, seeing as they found the bullshit prices in the last review

    Still cheaper importing

    Sounds fair. We already pay 50% more than the yanks already so what is another 10% between friends? Level playing field, utter rubbish.

    Never bought much from Ozgameshop or the like anyway. The prices never seemed that cheap after you factored in delivery time and having it from a different region which limited any recoup from trade-in. I preferred to get it day one from JB or wait for a PSN sale. The PSN sales seem to come around quite regularly so if you are patient you can save a lot.

    Aussie consumers see through the rip-offs of the likes of Harvey Norman, Foxtel, Telstra and Myer etc. We'll just be smarter and shop around more. They haven't caught up with globalisation. Absolute monkeys the LNP.

      Most of the stuff on EBay is GST-free, and the prices are similar to what you get overseas anyway. Where there's a will, there's a way (to avoid tax).

    Retail has price gouged us since the 80's (that I have been old enough to pay attention). How can a brick and mortar shop in the UK ship a product to me for 1/2 the price of my local shop (including paying for postage).
    Good god, my local JB guy was crying at me the other day that he could not even price match the JB store over east (I live in WA)... "Stuff is just cheaper there".

      I remember EB Games at one point not price matching a game for me.
      Game at EB Games: $89
      Same game at JB Hifi, in stock, 30 meters down the mall: $59

      EB Games: Sorry, we can't match that.
      I don't care - JB got my business that day.

        I never saw the point of price matching in that situation anyway - I'd rather just give my money to the guy selling it cheaper in the first place rather than try getting the expensive guy to match it. It might be different if they offered to beat the other price. But just match it? I'll just go to the cheaper one straight off.

    The thing that gets me is that people are just going "Oh, it's a 10% increase in the price; that seems fair". No it's not just a 10% increase. People are forgetting that there will be application costs, processing costs, and collection costs that the companies need to recoup. So that 10% very quickly becomes 15%, 20% or even as high as 30% to 40%, thus bringing that savings down to mere dollars.

    When you use the formula: (Item + Shipping + GST + Costs)*Dollar Conversion = Final Price.

    An item that you would save $50 on now becomes something you'll save less than $10 on, if that. And when you're barely saving anything, why bother with online shopping? Might as well go down to the local brick and mortar store and grab it there. Hell, the local store might become the cheaper option on some things; which is what Hockey and the State Ministers are counting on to drive people back to the antiquated retail sector and their ripoff prices.

      I don't think the processing costs will be as high as that. Let's take ozgameshop for example. All they need to do is alter their website to check whether the shipping destination is Australia, charge 10% on top of the price, collect payment as usual, then do a BAS every quarter to pay GST to the ATO. Based on the amount of business those guys must do, I think the compliance costs will be negligible - just something extra for their accountant to do. I think their currency conversion costs, Paypal fees or credit card merchant charges would be far in excess of GST compliance costs.

      Don't get me wrong, this is going to have a devastating effect on both companies like ozgameshop and consumers. The only winner is going to be government. I don't think Australian retailers are going to see much of a benefit either, because at the end of the day, overseas distribution costs and wages are far below Australian retailer overheads and wholesale prices. You might see a slight uptick that will let the government crow about its success, but in general people are still going to go for a cheaper price, which will still be (mostly) overseas retailers.

        No, but it'll make a convenient excuse to jack things up. Take SOE's approach to local pricing for MMOs: "We charge you guys in AU$, so we had to increase prices by $5 dollars to cover the conversion cost."

        Not only did they never explain why the local office needed to convert our money to USD at all, but the NZ branch had no such issue despite also charging local currency.

          There are certainly some questionable practices around!

    It will still be cheaper for me to buy US Xbox gift cards from Amazon and continue buying digital games cheaper than the $99.99AUD price in the AUS store.

    FFS, I'm so over this bullshit. Don't think I've ever held so much rage for one politician before.
    Something seriously needs to be done about the local pricing that we are having to pay

      Well there was that IT Pricing Enquiry that happened under the previous Labor government. But the election came and the government changed before the report got released. And this new government has, for some reason, refused to release it. Can't imagine why... perhaps it had things to say about Australian pricing and region locking that Rupert Murdoch and his mates didn't like?

        So much rage right now! I had so much hope when labour was in, and now it seems to be just getting worse and worse with no hope of anything getting better.

    And we wonder why Australia has a pirating problem.

      We still wonder?
      I think we already have a world reputation for that.

        Sorry, I meant 'They' as in the Australian government, Foxtel, etc. :p

    If Labor want to reach the gamer demographic they have just found the platform to do it.

      Are we a big demographic though? I wonder if there's an Australian Gamers Party lol.

        There was Gamers for Croydon. In the very least they caused enough disruption that lead to Michael Atkinson to resign.

      Labour has been on board from the beginning. Vote for them over Liberal, but vote Greens over Labour.

    I suppose if you wanted, could you not open a new steam/origin/amazon account or change your address to somewhere in the states, buy while using a vpn tunnel, ta-da gst free? IIRC steam doesn't have region restrictions.

      Steam objects to that quite highly, to the point of where if you buy a game on the USA Steam, and then log in from an Australian IP, you can't access that USA game so unless you're willing to run a VPN permanently... Amazon would work though youd' then need a USA based payment option or they'd slog you with GST anyway.

      There's a few ways to get that but it's annoying, and usually revolves around third party shipping companies who buy and ship the item to you.

    That's really lovely. So those items I can't buy in Australia AT ALL will still be hit with a GST, yeah, that's only a lot stupid.

      Yeah, I import a lot of model kits from Japan that I simply could not buy from any brick and mortar. How is that 'levelling the playing field'?

        The way I see it, it's not. It's to please the Gerry Harvey's of this world who don't want online business stealing their precious dollars. Even though he does the whole grey market games thing from overseas direct to customers here in Australia, but y'know.

    Don't really have an issue as long as it's regulated and we don't end up screwed over once more.
    But I can't help but think maybe Hockey and co. Should be plugging the other multi billion dollar tax holes currently in use by primary industry and various tech multinationals...

    Not exactly sure the brick and mortar stores should be saved. Economic natural selection. EB have had no problem charging ridiculous prices for years, taking advantage of consumers who didn't know better. If it's about saving jobs, then put pressure on these stores to be competitive. What about a level playing field for consumers?

    So what happens if I pre-order (pay in full) for a whole lot of games before July 1 2017 for games that come out after that date?

    Does this mean no more "First run" new releases at cheaper prices through JB and Target, presumably because they're ordering in bulk? Or will this only affect grey imports and bonafide overseas purchases?

    I understand the need to always be looking for new revenue streams, clamping down on potential leakage and so forth... but seriously? An increase in piracy is inevitable. How else are you supposed to stick it to a system that's becoming nigh impossible to fuck?

    And by the way, Abbot, could you have found a less convincing mouthpiece to spew nonsense at the Australian public? Hockey doesn't even attempt to buy into his own bullshit... like there's this constant smirk creeping at the corners of his mouth.

    But I digress.

      Are you talking about the same Liberal-National Party? Because there is no-one in that group I would consider a convincing mouthpiece. Turnbull is about the only person I had any respect for and he was used to sell the NBN screw up so as to reduce his credibility. His loyalty crushed him and there's no-one else worth barracking for. Hasn't been for a while.

      The changes will likely only apply to personal imports and not commercial, though with this mob anything is possible. Except excellence.

      Games aren't the only thing affected, Amazon, Book Depository, all those sites just got hit hard, 10% on the item, 10% on the shipping, likely additional on site and on pick up collection costs with more GST added on... Games got off pretty easily comparitively speaking as shipping, pickup, etc, won't be an issue with digital purchases.

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