Sally Sara:
The federal government has unveiled its long‑awaited proposal to make tech giants pay for Australian journalism. Under the draft laws, the News Bargaining Incentive would tax Meta, Google and TikTok 2.5 per cent of their Australian revenue, a levy which they can offset by striking deals with news publishers. The tax is expected to raise up to $250 million a year, which will be distributed to media companies.
Daniel Mulino is the Assistant Treasurer and Assistant Minister for Financial Services and joins me now. Daniel Mulino, welcome back to Breakfast.
Daniel Mulino:
Thanks very much for having me on.
Sara:
Both Meta and Google have strongly criticised this proposal, with Google rejecting the need for the tax. Why does the government think this reform is necessary?
Mulino:
Well, we know that journalists tell Australian stories, they inform us about what’s going on in our community and the broader world, but also public interest journalism in particular, independent high‑quality public interest journalism is critical to our democracy.
We know that media organisations are now having to deal with the market power of large digital platforms, and that’s putting them in a very difficult position and undermining the traditional business model of media companies and their ability to support journalism.
So what this incentive is designed to do is to strongly encourage digital media platforms to enter into commercial agreements with media organisations so that they’re paying a fair amount for the news content that they use.
This is designed in such a way that it won’t raise any payments. The outcome that we’re seeking is that digital platforms will engage with media organisations and enter into agreements that are of a similar quantum to the ones they entered into when the News Media Bargaining Code was originally brought into place.
Sara:
You’ve said these proposed laws would apply to Meta, Google and TikTok. What’s the thinking behind the exclusion of Microsoft or X?
Mulino:
So, what we’ve said is that we’re going to establish some thresholds. At the moment, the coverage of this measure is a 2‑fold test, it’s that there be at least $250 million of Australian‑generated revenue, and that, in the case of social media platforms, there be at least 5 million users, and search engines, at least 10 million users.
So, over time, as more digital platforms cross over those thresholds, they will fall within the scope of this measure. We have excluded LinkedIn, which, of course, is owned by Microsoft, because that is an organisation, a platform that we have found does not have the same kind of market power or the same kind of engagement with media as the other social media and search platforms. That’s something which we raised with the stakeholders, and also through our discussion paper. We think that that’s of a different nature, it’s more of a professional networking platform.
But as I said, there are certain thresholds which are set in the exposure draft legislation which will capture more platforms as they exhibit the market power that we’re seeing at the moment through Meta, Google and TikTok.
Sara:
Why did the government decide against including artificial intelligence platforms in these reforms?
Mulino:
So, artificial intelligence is largely being dealt with through other processes. So, for example, there is work going on through the leadership of the Attorney‑General, Michelle Rowland, in relation to copyright, and the ways in which that interacts with the way that artificial intelligence uses information in the public realm and then uses it to create more product.
So that was seen to be the better path that is going to continue in parallel with the operation of the News Bargaining Incentive.
Sara:
The tech platforms will only need to sign deals with 4 media companies. Will we see exclusive content deals and consequences for media organisations which are locked out here?
Mulino:
So, what we’re saying through the mechanism that is put forward in the draft legislation is that they have to enter into agreements with at least 4 media organisations in order to fully acquit their obligations under the incentive. We’re obviously hoping that they will enter into broader agreements.
What I would also note is that there is a 150 per cent offset if you enter into agreements with media organisations, but the offset is at a higher rate, 170 per cent, if it’s with smaller media organisations with turnover of less than $50 million. So there’s an additional incentive to enter into agreements with those kinds of organisations. We do fully acknowledge that there is important – that diversity in our media is very important.
What I’d also note is that yesterday in addition to releasing the draft exposure legislation, we also released a discussion paper, Minister Wells, Minister for Communications released a discussion paper which set out the ways in which any payments received by the government as a result of media organisations choosing not to enter into agreements would be distributed, and the proposal there is that it be on the basis of the number of journalists employed by organisations. That distribution mechanism proposed by Minister Wells for consultation is very much focused on this core public policy goal, which is to support public interest journalism.
Sara:
You’re listening to Radio National Breakfast. My guest is the Assistant Treasurer, Daniel Mulino. Meta has called the government’s proposed legislation, quote, ‘Nothing more than a digital services tax’. Given US President Donald Trump has recently threatened to impose a tariff on the UK if it doesn’t drop a digital services tax on US tech firms, are you concerned the US could punish Australia for this initiative?
Mulino:
Well, I don’t think that’s an accurate characterisation of it at all. Firstly, it is set in such a way that the outcome that we’re seeking and the strong commercial incentive on the digital platforms is to enter into commercial agreements.
So as you noted earlier, the incentive is set at 2.25 per cent of Australian‑generated revenue, but if digital platforms enter into commercial agreements, they can offset that at 150 per cent. And so if they enter into commercial agreements, they can acquit their obligation with payments of 1.5 per cent of their revenue. So that would be in their commercial interests, and that would reflect in broad terms the quantum of deals that were entered into previously.
The other thing I’d note is that if they decide not to enter into commercial agreements and decide instead to pay at the higher level at 2.25 per cent, that will all be passed through in full to media organisations, so none of it will be retained by government, which is in contrast to some of the arrangements that have been proposed by our governments.
Sara:
Just briefly, the United Arab Emirates is quitting the group of oil‑producing nations known as OPEC. What do you think this could mean for exporters and for oil prices?
Mulino:
Well, look, I think what the Australian Government is clearly going to be supportive of is anything that improves the stability of supply. Now it’s too early to tell how this particular measure will play out.
But what I would say is that there are many moving parts to the supply of oil at the moment, and that’s why the government’s been so focused on ensuring that Australia gets the supply it needs. The Prime Minister has been travelling to a number of countries in our region, the Minister for Energy has been on a daily task of ensuring that ships arrive, and they have been, and that our reserves are replenished. But, look, we need to keep monitoring this very complex market to ensure that Australia gets the supply it needs.
Sara:
Daniel Mulino, Assistant Treasurer, thank you.
Mulino:
Thanks very much.