Big Tech Challenges Labor’s New Media Bargaining Incentive Plan

Labor unveils a Media Bargaining Incentive taxing tech firms 2.25% of Australian revenue unless they fund local news, sparking backlash from Meta and Google.

By: AXL Media

Published: Apr 28, 2026, 10:57 AM EDT

Source: ABC News

The Mechanics of the 2.25 Percent Revenue Levy

The draft legislation introduces a sophisticated tax-and-incentive structure aimed at platforms with significant market presence in Australia. Under the plan, captured tech firms face a baseline tax of 2.25 per cent on their gross Australian revenue. However, the system is designed to favor negotiation over taxation:

Tax Deduction: Companies can reduce their tax liability potentially to zero by striking private commercial deals with local media organizations.

Multiplier Effect: To encourage these deals, tech platforms can deduct 150 per cent of the value of their agreements from their tax bill.

Support for Small Outlets: For deals made with smaller news organizations, the deduction rate increases to 170 per cent, ensuring that regional and independent players are not sidelined in favor of major media conglomerates.

Threshold for Compliance: To reach a zero-tax status, platforms must conclude agreements with at least four distinct media groups.