Canada’s last-minute decision to rescind its digital services tax in response to US trade pressure does not signal doom for Australia’s efforts to get tech giants to the bargaining table with local news publishers.
Instead, industry leaders on both sides are open to further developments, which the government promises are on the way.
The Computer & Communications Industry Association (CCIA), representing the likes of Google and Meta, previously told US trade officials Australia’s proposed News Bargaining Incentive was a “coercive and discriminatory tax”.
But it recently took a softer view.
The CCIA told The Australian Financial Review (AFR) last month the News Media Bargaining Code was still “a potential trade issue”, but not as much as digital services taxes imposed by Canada, Spain, Italy and the UK.
CCIA vice president, digital trade Jonathan McHale said Canada’s digital services tax went against international norms on taxation because it taxed revenue instead of profit.
The Australian government has emphasised raising tax revenue is not the intention of the News Bargaining Incentive.
On the other side of the table, Australia’s biggest news media organisations and smaller news businesses alike continue to throw support behind the government’s efforts to ensure local outlets are compensated for the use of their journalism.
They also stress the importance of a swift resolution.
“We have been duly consulted and appreciate the government’s commitment to finalising the incentive,” a Network Ten spokesperson told The Australian.
“We look forward to an expeditious resolution of the consultation phase and the consequent implementation of the incentive.”
A spokesperson for Nine CEO Matt Stanton told The Australian: “The Australian community supports the government taking strong and decisive action on this issue and it’s now time the proposed reforms are put into law.”
Australia still awaits a promised public consultation paper on the News Bargaining Incentive, initially due to be released in “early 2025”.
Now more than halfway through the year, no obvious progress has been made on introducing the incentive into legislation.
As the US continuously dangled the threat of higher tariffs in retaliation against policies it deems unfair, speculation arose the Australian government paused its commitment to the reform.
But publicly, the Code has received bipartisan support.
In June, Assistant Treasurer Daniel Mulino told AFR the incentive remained a “key priority” and a consultation paper would be released soon, but it was important to “proceed carefully” and “get things right”.
In July, Foreign Minister Penny Wong told Sky News the government was determined to continue with the News Media Bargaining Code policy framework.
“This is not a revenue-raising exercise,” she said.
“It really does go to enabling content for consumers and ensuring that journalists and content creators have appropriate remuneration, and that is an important thing for any democracy.”
The industry was hit hard by the loss of about $70 million a year following Meta’s 2024 decision against renewing commercial deals with local news publishers,
Meta’s power-play also resulted in an emboldened negotiating position from Google, which in the last couple months saw the tech giant end deals with publishers years early – angering those who had made business decisions based on the long-term deals – and reportedly strike new deals with some publishers for significantly shorter periods.
The decline of commercial deals with major tech companies comes as the news media industry faces increasing pressure to claw back advertiser spend and readers from social media platforms and search engines.
Written by Sezen Bakan