Big carrot, more stick under news bargaining plan

Global tech giants have sandbagged their wider revenue streams but face losing a larger share of their advertising income under the federal government’s plan to force them into funding Australian journalism.

The final details of the government’s News Bargaining Incentive, which it hopes to bring to parliament within weeks, show a key concession to companies including Meta, Google and TikTok in a bid to encourage them to strike commercial deals with Australian news publishers.

But the concession has come with a caveat aimed at ensuring local publishers share in the revenue that tech giants are accused of generating by effectively siphoning Australian-produced news onto their own sites without paying.

Under the original incentive plan, digital search and tech platform companies with revenues of at least $250 million a year would face a 2.25 per cent charge against their total revenues if they failed to come to a commercial deal with four local news producers. Companies can offset the charge by signing tax-deductible deals worth about 1.5 per cent of revenue.

The policy is aimed at ensuring news outlets share in some of the income generated by their work that is often spread, without charge, on the tech giants’ various platforms. The money is expected to flow back to the employment of journalists.

Tech companies argued the charge on total revenue was unfair as parts of their operations had nothing to do with news.

The new incentive plan, to be released on Monday, has reduced the scope of revenue to only that made by the tech companies’ digital advertising streams. But to ensure the same amount of revenue is raised by incentive, the rate will be increased from 2.25 per cent to 2.5 per cent.

Tech companies will have to strike deals with at least six publishers.

The rate for voluntary deals has not changed.

The original proposal excluded sites such as LinkedIn, which have claimed they do not carry news. But LinkedIn and other “professional networking services” will now face the charge.

Treasury estimates the policy will deliver between $200 million and $250 million a year to local media.

Assistant Treasurer Daniel Mulino said the government believed financially sustainable journalism was vital to a well-functioning democracy.

“While we are making some changes to the News Bargaining Incentive, they do not alter the intent of the legislation and remain true to the policy rationale,” he said.

“We want digital platforms to do deals with a diverse range of media organisations and have shown good faith with both the platforms and media companies during the consultation process.”

When the original plan was unveiled, it attracted strident criticism from Meta, which described it as a “discriminatory, retroactive tax” that was poorly designed and “grossly unfair”.

But the incentive has broad support in the Australian news sector, which has faced sharp falls in revenue and been forced into substantial job losses over several years.

Apart from the incentive itself, the government has finalised the details of the News Journalism Payment Scheme that will be funded by the charge.

The definition of journalists will be broadened to include “more essential news roles” and freelancers, there will be larger revenue flows for regional-based publishers or those that service particular communities, while a grants program will be created specifically for publishers and start-ups with revenues under $150,000 a year.

Communications Minister Anika Wells said the increase in support for smaller and regional publishers recognised the challenges they faced and their importance to their local communities.

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