Executive Summary

Last month, the Australian Treasury released a consultation paper on proposed reforms to the News Bargaining system. The system incentivises global social media and search platforms to compensate news publishers for the re-use of news content in search and social media applications.

The Consultation Paper proposes a much stronger regulation than before. Instead of encouragement to strike deals, a new News Bargaining Incentive (NBI) would levy platform companies upfront, unless they offset their liability by signing deals with news publishers for use of content. 

This proposal has a wider context that cannot be ignored. First, it is part of a wider program of policy reform that targets global media platforms who currently dominate Australia’s advertising revenues and (increasingly) its channels of social and political communications. Social media age restrictions are part of the same program. In the background, other proposals for targeted competition regulation are being considered. Success here will open the door to more courageous reforms. Failure will erode the Government’s capacity to regulate global platforms.

Second, the News Bargaining Incentive would provide financial relief to Australian media at a critical time. Proposed restrictions on gambling advertising will hit the industry hard. The NBI could help to offset this impact. Along with some other reforms (e.g. the final abolition of the Commercial Broadcasting Tax) it can deliver a smoother transition for both industry and Government.

The existing News Bargaining Code – fit for purpose?

On 13 November, the Australian Communications Minister and the Assistant Treasurer jointly released a Consultation Paper on a proposed News Bargaining Incentive (NBI) Scheme to incentivise search and social media platforms to compensate Australian news publishers for the use of news content on their platforms. Submissions close on 19 December 2025

The News Bargaining Incentive is designed to address a critical structural weakness in the existing News Media and Digital Platforms Mandatory Bargaining Code (the Code) which allows digital platforms to avoid their obligations.

According to the consultation paper, the specific weaknesses are:

• The “News Withdrawal” loophole: The Code only applies to digital platforms that carry news on their services. This means a platform can render the Code ineffective simply by withdrawing news content entirely, leaving nothing to negotiate or arbitrate.
• Vulnerability to circumvention: Without an additional incentive, platforms can circumvent the Code’s financial obligations by removing news. This creates a risk that platforms will exit the news market rather than pay, which was not the original intent of the regulation.
• Impact on small publishers: A withdrawal of news affects all news publishers, but it specifically harms small publishers who are heavily reliant on digital platforms to distribute their content and drive traffic.
• Adverse democratic impacts: The ultimate weakness is that the current Code cannot guarantee the continued distribution of news. If platforms withdraw news to avoid the Code, it harms the public interest by reducing access to journalism.

The News Bargaining Incentive Scheme

The Incentive is designed to fix the weaknesses of the Code by taxing large platforms based on their size and revenue rather than their carriage of news. This ensures they cannot avoid contributing to the Australian news sector simply by removing news links. This is significant, because it shows that the motivation for the NBI is not just unauthorised re-use of content, but the platforms’ wider impact on local media in general and news gathering in particular.

The proposed scheme is intended to reinforce the News Media and Digital Platforms Mandatory Bargaining Code (“the Code”). The primary objective is to ensure digital platforms continue to enter commercial deals with news businesses, even if they withdraw news content from their services to circumvent the Code.

The Government’s stated aim is to collect no revenue from this measure; rather, it is designed so platforms are financially better off supporting the news sector than paying the incentive levy:

Scope and Application

• Target Entities: The incentive applies to “large” digital platforms operating “significant” social media or search services in Australia, regardless of whether they carry news content.
• Revenue Threshold: A platform is considered “large” if its consolidated group has gross annual revenue attributable to Australia above $250 million.
• Service Definitions: “Social media” and “search services” may be defined by their ordinary meaning or aligned with the Online Safety Act 2021. Services with limited links to news (e.g. dating, gaming) are intended to be excluded.

It is proposed that the incentive will apply to income tax years commencing on or after 1 January 2025. Companies likely to be impacted include Google, Meta, Microsoft, TikTok and Apple.

Calculation of Liability

A company’s incentive liability is calculated as the company’s revenue base multiplied by an incentive rate, minus any eligible expenditures on news content multiplied by a deduction rate. Clearly, the definition of these terms is critical:

• Charge Base: The preferred option is total gross group revenue generated in Australia (exclusive of GST). To provide certainty for multi-year deals, this may be calculated using revenue figures from a prior year (e.g., three years prior).
• Incentive Rate: Preliminary modelling suggests a rate of 2.25% is required to incentivise deals roughly equivalent to 1.5% of platform revenue.
• Deduction Rate: The proposed deduction rate is 150% of eligible expenditure. This provides an added incentive to strike deals
• Credits: If eligible expenditure exceeds the liability, the excess is not refundable but may be carried forward as a credit to reduce future liability. 

The Government intends to collect no revenue from this measure. But if funds are collected because a platform chooses to pay the charge rather than enter into deals, the Government will consider options to distribute that revenue as assistance to the news sector, e.g. grant funding.

There are no proposed restrictions on how news businesses must use the revenue received.

Eligible Expenditure

Entities will likely need to self-assess their liability and whether they fall within the scope. They can reduce their liability by incurring “eligible expenditure,” primarily through commercial deals with news businesses. Deals should be with professional news businesses. The preferred approach uses the existing registration criteria under the code (e.g., professional standards, revenue >$150k, core news content) without requiring formal ACMA registration.

To ensure diversity in funding, a cap may limit the deduction available for a single large deal (e.g., the largest deal cannot exceed one-third of total eligible expenditure). Non-commercial support (e.g., grants, journalism funds) may be eligible but capped (e.g., at 25% of total eligible expenditure).

Reporting requirements may include the number and value of deals to ensure compliance and inform future policy reviews

The incentive liability (the charge itself) is not deductible for corporate income tax purposes. However, the eligible expenditure (payments to news businesses) generally will be deductible.

Why this matters – strengthening local media and our right to regulate

We – and many others – have discussed the negative impacts that search and social media have had on local media industry finances, the integrity of circulated information, and even on youth psychology. This has led to a rising resistance to platforms and their impacts (see our recent report “In Defence of Australia’s ESafety Commission – Why Technology Needs Regulation”), and new policy initiatives designed to mitigate these impacts.

The most important outcome of the proposed NBI will be a significant boost to local media industry finances. The Australian Financial review estimates that Google, Meta, Microsoft, TikTok and Apple, the most likely targets, generate revenue in Australia of $41 billion. Assuming they all strike enough deals to avoid the NBI, they would need to pay over $600m per annum to news publishers in Australia.

This comes at an opportune time, as the Government is also considering a gambling ad ban that could cost local media around $300m in lost revenue. 

Indeed, it may be no coincidence that the NBI is surfacing now, after years of deliberation. An NBI would be a sweetener when the gambling ban proceeds, and there are other options the Government has to mute industry criticism of the gambling ban, for example removing the Commercial Broadcasting Tax levied on TV broadcasters (about $40m per annum, suspended for FY26). It is not difficult to imagine these measures being advanced as  a package.

Perhaps more importantly, implementation of an NBI would demonstrate that the Australian Government has not been intimidated by industry resistance to regulation, and is prepared to take the steps necessary to civilise the “Wild West” of the global platform industry. We have argued that this is a fight that the Government must win (see our report “Will beating Meta be enough to save news media?”). If it loses it will be difficult to retain the capacity to regulate global corporations for the common good of Australians.

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