A proposed tax will target big tech companies to fund Australian journalism.

The Federal Government has unveiled a new tax plan called the News Media Bargaining Incentive.

Announced this week by Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland, it aims to compel companies such as Meta, Google, and TikTok to negotiate agreements with Australian news publishers or face financial penalties.  

Under the new proposal, tech platforms earning over $250 million in Australian revenue would be subject to a levy unless they make agreements with publishers to pay for news content. 

The tax would be offset, potentially to zero, by the value of these agreements. However, platforms would still have to pay the tax even if they remove news from their sites, a strategy previously employed by Meta in response to similar legislation in Australia and Canada.  

Jones says that the tax is intended as a “backstop”, rather than a revenue-generating measure.

“The goal is not to collect taxes but to bring companies to the table to fund journalism,” the assistant treasurer said.  

Australia’s regional news organisations have suffered from significant downsizing over the past decade, as advertising revenue has shifted to online platforms. 

The proposed scheme builds on the Morrison government's News Media Bargaining Code, which led to initial agreements between some tech companies and publishers. 

However, with the expiration of these agreements and Meta's reluctance to renew them, the government has deemed stronger measures necessary.  

The proposal has drawn mixed reactions. 

News organisations have welcomed it as an innovative measure to help sustain public interest journalism.  

Tech companies, on the other hand, have expressed reservations. 

Meta says the policy fails to recognise how social media platforms operate.

“Most people don't come to our platforms for news content,” the company said. 

TikTok, included under such regulation for the first time, claimed it is not a “go-to” platform for news, but pledged to engage with the consultation process.  

DIGI, an industry group representing tech firms, argues that the scheme unfairly targets their sector to subsidise another. 

Legislation is expected to be introduced early next year, with the measures backdated to take effect from January 1. 

Consultations with affected companies are ongoing. Details such as the tax rate and mechanisms for revenue distribution remain under discussion.  

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