Parliament passed the News Bargaining Incentive on Thursday, giving the largest digital platforms operating in Australia a choice: sign funding deals with at least eight news businesses, or pay a charge of 2.5 per cent on the digital advertising revenue they earn here.
The charge applies to a company that runs a significant social media or search service in Australia and takes more than $250 million a year in local advertising revenue. Meta, Google, TikTok and Microsoft's LinkedIn sit inside that description. It applies whether or not the platform carries a single Australian news story.
Communications Minister Anika Wells and Assistant Treasurer Daniel Mulino said in a joint statement that the incentive closes a loophole in the News Media Bargaining Code, under which a platform could withdraw news from its services and walk away from the code's obligations. "Journalism is an essential part of a strong democracy, it holds people, businesses and governments to account," Wells said.
Deals reduce the bill rather than remove the obligation. A dollar paid to a large publisher counts as $1.50 against the charge. A dollar paid to a small or medium publisher counts as $2. No single agreement can offset more than a quarter of a platform's total liability, so a platform cannot clear the scheme by writing one cheque to one masthead.
What the government collects does not go to consolidated revenue. It returns to the sector through a statutory payment scheme, and the share each publisher receives is set by a weighting formula built on how many full time equivalent journalists it employs. Ten per cent of the charge is held back for grants: half of that to Australian Associated Press for the wire service, half to organisations too small to qualify for a share of the deals.
Consultation on the exposure draft moved several settings. The loading applied to regional journalists, small and medium publishers and outlets serving underrepresented communities doubled from 10 per cent to 20 per cent. The government narrowed the charge base and lifted the rate, dropped the exclusion that would have kept professional networking sites out of scope, and widened the definition of a journalist to take in more newsroom roles and freelancers producing original work. A separate grants program covers publishers and start-ups turning over less than $150,000 a year.
Neither Thursday's statement nor the August 3 release that finalised the legislation put a number on what the charge is expected to raise. It cannot be known in advance, because the total depends on how many deals get signed and at what price, and none of the four companies has said what it intends to do.
Mulino said the government was delivering on its commitment to support Australian journalism and encourage digital platforms to do deals. Liability is assessed against each platform's own financial reporting period, so the first real measure of the scheme arrives when those accounts are next struck.
