Australia Plans ‘News Tax’ On Tech Firms From January

Stressing that a strong and diverse news sector is vital for a healthy democracy, the Australian Government on Thursday announced plans to establish the News Bargaining Incentive to ensure large digital platforms contribute to the sustainability of news media in Australia.

Social media platforms with a revenue of more than $160 million a year from Australia will be taxed a still-to-be-decided figure earmarked to pay for news. However, they can offset the tax — or avoid paying it entirely — if they voluntarily enter into commercial agreements with Australian media companies.

The Australian government indicated the parent companies of Google, Facebook and TikTok would be covered by the tax, which will come into effect next year.

The News Media Bargaining Code was introduced in 2021 to incentivise digital platforms to enter into commercial deals with news publishers. However, the rapid growth of digital platforms has disrupted revenues to Australia’s media sector, which threatens the viability of public interest journalism.

The code acknowledged that large digital platforms were unavoidable trading partners for Australian news media businesses in reaching audiences online, and sought to address the imbalance of bargaining power between digital platforms and news media publishers. 

However, the code has limitations. It allows platforms to avoid their obligations by removing news, which was not in the best interest of Australians. A significant proportion of Australians use digital platforms to access news, and the government wants this to continue.

To address these issues, the Australian Government has decided to establish a News Bargaining Incentive to encourage digital platforms to enter into or renew commercial deals with news publishers. However, the government intentions to raise revenue from this policy.

The bargaining incentive includes a charge and an offset mechanism. Platforms that choose not to enter or renew commercial agreements with news publishers will pay the charge. Platforms with these agreements will, however, be able to offset their liability.

The incentive will apply to large digital platforms operating significant social media or search services irrespective of whether or not they carry news. The Government will consult stakeholders on the final design of the scheme and a public consultation paper is expected to be released in early 2025.

The incentive builds on significant work underway to ensure Australian laws keep pace with digital technologies, including the development of a new scams prevention framework, a digital competition regime, implementation of privacy reforms, and ongoing work related to artificial intelligence.

Committed to Sustainable Media

Australia’s Minister for Communications Michelle Rowland said that the federal government was committed to a diverse and sustainable news media sector, as it was critical to the health of Australia’s democracy.

“Large digital platforms have an important role to play in providing access to news for all Australians, and contributing to the sustainability of public interest journalism. The News Bargaining Incentive is an important step towards securing support for Australia’s news media,” she added.

Assistant Treasurer and Minister for Financial Services Stephen Jones said that the Government wants Australians to continue to have access to quality news content on digital platforms, which receive huge financial benefits from Australia, and they have a social and economic responsibility to contribute to Australians’ access to quality journalism.

“This approach strengthens the existing code by addressing loopholes that could see platforms circumvent their responsibility to pay,” Jones said.