The Institute of Public Affairs (IPA) welcomes the opportunity to submit to the Treasury’s consultation on the News Media Bargaining Incentive (NMI) draft legislation. Building on the 2021 News Media Bargaining Code, the Treasury has proposed the following bills: the News Media Bargaining Charge Bill 2026 (NMI bill); the News Media Bargaining (Administration) Bill 2026 (Administration Bill); and the Treasury Laws Amendment (News Media Bargaining) (Consequential) Bill 2026 (Amendment Bill).
Under the Code, social media and search platforms hosting news content on their services were encouraged to enter into voluntary commercial agreements with news media companies as payment for their news products being used on their platforms, at the threat of being declared a “designated platform” by the Treasurer after which agreements would become mandatory and subject to stricter requirements. The Code resulted in about $250 million being paid annually by Google and Facebook: however, when Facebook’s contracts expired, Meta refused to negotiate further deals and threatened to remove all news content from its platforms in Australia.
The stated purpose of the NMI is to incentivise certain platforms, regardless of whether they host news content, to enter into commercial agreements directly with news organisations, or pay a greater amount to the federal government by way of a “charge”. The government is proposing to distribute the money raised by the charge through a statutory payment scheme to news companies, with the Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts facilitating a separate consultation on the model.
Rather than an incentive, the IPA considers the proposed NMI charge to be effectively a conditional tax levied in a discriminatory way. This new tax risks the creation of an unhealthy reliance on government intervention in the news industry. IPA research finds:
- The NMI represents market interference that could make traditional media companies dependent on government support.
- The NMI is a new digital services tax, which could undermine Australia’s trade relations with the United States.
The NMI represents market interference that could make traditional media companies dependent on government support.
Under the proposal, if digital platforms do not negotiate commercial deals with news organisations, they must pay the NMI charge, with collected funds to be distributed to Australian news corporations. A key justification for this policy is that the digitalisation of the Australian economy has been damaging to the news industry, which is in turn considered harmful to democracy. As the EM notes, “the shift to online advertising has been detrimental to revenue models of these news businesses” and has “affected the viability of high-quality public interest journalism” (EM, pp6).
However, the NMI approach represents problematic market interference that does not address the fundamental shift in how Australians consume news. The proposal essentially empowers the federal government to arbitrarily choose which businesses will subsidise others, requiring tech corporations to subsidise traditional media outlets and forcing artificial commercial relationships that do not reflect actual consumer value or demand.
In the 21st century, the way Australians consume news has fundamentally changed, and will continue to do so. According to the University of Canberra’s The Digital News Report: Australia 2025, while television remains the most popular source of news among all Australians (37 per cent), social media has emerged as the second most popular main source of news at 26 per cent among all Australians (+1 per cent), overtaking online news platforms as a main source of news (23 per cent, -5 per cent). Primary consumption through print news and radio trail other sources of news dramatically, at 5 per cent and 7 per cent respectively. This indicates that Australians are increasingly getting their news through their social media feeds and not traditional outlets. Rather than interpreting this consumer behavior as a justification for subsidising legacy media, policymakers should recognise it as a signal that traditional media would benefit from adapting to a shifting market.
But the NMI risks creating a perverse incentive, rewarding static business models over innovation. It is inaccurate to suggest, as the EM does, that the bills support the “sustainability and diversity of the Australian news media sector” (pp14); they do the opposite, discouraging news organisations from developing sustainable digital strategies by shielding them from market pressures. Instead of encouraging a competitive media landscape, the NMI entrenches a structure that consumers are leaving.
Moreover, the assumption that legacy media inherently provides superior democratic value is contestable. The internet and digitisation of the market have allowed information to democratise, diversifying public debate by breaking the monopoly on public debate previously held by traditional media. This has seen the emergence of news-dedicated influencers and podcasters, which have attracted enormous followings and diversified the information landscape.
Rather than engineering bailouts, the government should direct its attention to encouraging innovation and ensuring the digital market remains competitive and based on merit.
The NMI is a new digital services tax, which could undermine Australia’s trade relations with the United States.
The NMI is a tax dependent on whether platforms enter into commercial agreements with news organisations. The Administration Bill proposes to impose a “charge” on any “significant social media or search service” if its consolidated revenue attributable to Australia exceeds $250 million for the financial year and if it has over 5 million users if it is a social media provider, or over 10 million users if it is a search engine (clause 7(b), Administration Bill).
According to clause 14 of the Administration Bill, if a parent entity is liable to pay the NMI charge, the amount payable is 2.25 per cent (clause 3, NMI bill) multiplied by the consolidated revenue attributable to Australia for the members of the parent entity’s service group related to the third-most-recent financial year before the financial year (clause 14, Administration Bill). “Consolidated revenue” is defined as the sum of the Australian revenue of all members of a service group (being the parent entity and all other entities controlled by the parent entity) during the parent entity’s 12-month financial reporting period in the relevant financial year (clause 10, Administration Bill).
The so-called “incentive” exists in the form of an offset mechanism, whereby platforms may offset their tax, including to nil, if they negotiate commercial agreements with at least four news media organisations. It is hoped that the offset will incentivise entry into these commercial deals, as it is more “favourable for entities to pay for the use or production of Australian news content than to pay the NMI” (EM, pp15).
The proposal clearly constitutes a tax, as it meets the definition as set out by the High Court in Matthews v Chicory Marketing Board (Vic)[1938], of “a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered”. Moreover, the draft legislation has been separated into several bills, with the News Media Bargaining Charge Bill being a single purpose bill setting out the “charge”. This is because section 55 of the Australian Constitution requires any law imposing taxation to deal only with the imposition of the tax. It has been deliberately drafted this way, separate from the Administration Bill and Amendment Bill, to avoid the legislative architecture being invalidated in the event of a successful constitutional challenge.
The imposition of such a tax risks undermining trading relations with the United States. This proposal has been put forward in an environment where the United States, a major ally and trading partner, has expressly indicated that it may impose retaliatory costs on any country unfairly targeting American corporations with digital service taxes. For example, in August 2025, President Trump declared that digital taxes are “all designed to harm, or discriminate against, American technology”, vowing to stand up to “countries that attack our incredible American tech companies” and to level “substantial additional tariffs” on offending nations. In April 2026, President Trump warned of a “big tariff” on the United Kingdom unless their 2 per cent levy on Amazon, Google, and Apple was abolished. Following the announcement of the NMI, White House spokesman Kush Desai reiterated the President remains committed to defending American corporations from “digital services taxes and other forms of foreign extortion”, signaling the imminent danger to bilateral relations caused by pursuing the NMI.
I thank the Committee for the opportunity to provide this submission.
