Chalmers urged to take over tax on big tech amid Trump’s threats
Media companies are calling for Treasurer Jim Chalmers to take control of implementing the government’s policy to force big tech platforms to pay for news content or face new taxes, arguing that it is too important to leave to a junior minister.
In mid-December, Assistant Treasurer Stephen Jones announced the News Bargaining Incentive, which will require platforms including Meta, Google and TikTok owner ByteDance to pay hundreds of millions of dollars in new taxes unless they strike deals to pay for Australian news.
Mr Jones, who announced his shock retirement from politics last week, said the final details, such as the amount platforms would be charged, would be arrived at following consultations in early 2025. Publishers and tech platforms expect to receive a concept paper by mid-February.
The crackdown on recalcitrant tech platforms has put Labor on a collision course with the new US Trump administration, which has threatened to double taxes on Australian citizens and companies operating in the US if American companies are hit with “discriminatory or extraterritorial” taxes.
Industry sources, who spoke on condition of anonymity so they could talk freely, indicated that a marked shift in the geopolitical situation, including the close relationship between President Donald Trump and the US tech billionaires, meant the News Media Bargaining Code and the proposed “enforcement mechanism” in the form of the News Bargaining Incentive, needed to be handled at the cabinet level.
“The commencement of the Trump presidency and the growing power of tech platforms makes it more important than ever that the News Bargaining Incentive and other tech policy is handled at cabinet level by the treasurer,” an industry source told The Australian Financial Review.
“It sends an important signal. It’s been almost a year since Meta pulled out of its news deals here in Australia, and we need action on this issue to be prioritised.”
Sources noted that under the Coalition, the News Media Bargaining Code was handled by then treasurer Josh Frydenberg and then prime minister Scott Morrison.
Actual or perceived conflict
Dr Chalmers recused himself from dealing with the policy because his wife Laura Chalmers is editor-in-chief of a News Corp magazine in Brisbane.
Former Australian Public Service Commissioner Andrew Podger said Dr Chalmers did the right thing by declaring an actual or perceived conflict, adding – without commenting on the treasurer’s specific circumstances – that the first step of disclosure did not automatically mean a minister had to recuse themselves.
“Having acknowledged it, there is a second issue: does it require a removal from decisions in that areas?” Mr Podger said. “That is a matter for judgment as to how significant is the conflict or perception of conflict, the minister and prime minister would have to make.”
Seven West Media chief executive Jeff Howard said he was optimistic the government was progressing the reforms in the best interests of Australian news consumers.
Under the proposed incentive, the Australian Taxation Office would impose an annual charge on social media and search companies worth more than the value of deals struck under the existing news media bargaining code, which is about $200 million a year.
Platforms that do deals to pay news publishers would then be able to offset the value of those deals against the new tax – which Labor will call a charge – plus a percentage-based uplift.
For example, if the ATO imposes an $11 million charge on a platform and grants a 10 per cent uplift, the platform would need to implement deals with news publishers worth at least $10 million to avoid having to pay the ATO.
Any shortfall between the deals struck between tech giants and the annual tax would be collected by the ATO and distributed to news publishers.
Under the model, Apple and Microsoft could also be caught up with their Apple News and LinkedIn products respectively if they met the threshold of generating revenue more than $250 million a year in Australia.
