The Australian government today opened a public consultation on draft legislation that would force large digital platforms - including social media and search services - to either pay news publishers for their content or face a charge equal to 2.25 per cent of their Australian revenue. The proposal, released on 28 April 2026 alongside three separate bills, is the most detailed attempt yet by any government to quantify what tech companies owe the news industry - and to enforce it through the tax system.

The draft framework, known as the News Bargaining Incentive (NBI), is built around a charge-and-offset mechanism. Platforms that enter commercial content deals with Australian news outlets can reduce their liability to zero. Those that do not will pay a charge that flows back into the news sector. Consultation closes on 18 May 2026, and submissions can be lodged at the Treasury website.

Why the existing code fell short

Australia passed the News Media Bargaining Code in 2021, making it the first country in the world to legislate a framework compelling platforms to negotiate with publishers. The result was a wave of commercial deals, primarily between Google and News Corp Australia, Nine Entertainment, and other large outlets. But a structural gap remained. According to the draft explanatory materials, the existing code allows platforms to avoid their obligations simply by removing news from their services entirely - an escape hatch that undermined the code's bargaining leverage.

The NBI is designed to close that gap. According to the Prime Minister's office, the proposed legislation addresses this limitation directly. The new charge applies whether or not a platform carries news content. A significant social media or search service does not need to carry news content to attract liability under the draft law.

Who is caught

The NBI applies to any entity - or corporate group - that provides a "significant social media or search service" in Australia and whose Australian consolidated revenue exceeds A$250 million in the relevant financial year.

Significance is defined numerically. A social media service qualifies as "significant" if it averages more than 5 million active Australian users per month in the prior financial year. For a search service, that threshold is higher: 10 million monthly active Australian users. The drafting is careful on what counts as a "social media service." According to the Administration Bill, a service must have a sole or significant purpose of enabling online social interaction between end-users, allow those users to link to or interact with each other, and allow them to post material on the service.

Several types of services are carved out entirely: messaging and email platforms, online gaming services, professional networking sites, services supporting education or health, and platforms whose primary purpose is enabling product or service reviews. Advertising revenue generated on a platform is explicitly excluded from the assessment of whether a service qualifies as social media. That carve-out matters because it means a platform cannot argue that its advertising function transforms it into something other than a social network.

The search service definition and AI

The definition of "search service" carries a notable exclusion. According to the explanatory materials, services provided solely or primarily by large language models are excluded from the definition of internet search engine service. An artificial intelligence service that solely uses a large language model to answer questions would not qualify as a search service under the NBI framework. This matters as Google, Microsoft, and others integrate generative AI directly into their search interfaces - a development documented extensively in Australia's regulatory context.

A job search website that only searches its own listings, a website search function limited to a single site, and an accommodation price comparison engine are each explicitly excluded from the "search service" definition. The target is general internet search - the kind that returns broad results from across the web.

How the charge is calculated

The NMI rate is set at 2.25 per cent. But the base on which that rate is applied is not the platform's current Australian revenue. It is the consolidated revenue attributable to Australia from the third-most-recent financial year before the financial year in which the charge is due.

For the 2026-27 financial year, for example, the base would be the platform's Australian revenue from the financial reporting period ending during 2023-24. According to the explanatory materials, this lag is intentional. By anchoring the charge to older, known revenue figures, the government gives platforms certainty about the size of their potential liability three years out - providing time to negotiate content deals that would offset the charge. It also encourages multi-year agreements, since a platform that locks in a long-term content deal with a publisher can plan its offset strategy with greater precision.

Australian revenue is defined broadly. It includes revenue from advertising directed at Australian users, even if the payment itself originates outside Australia. Revenue from tangible goods sold to Australians and other services provided within Australia are also included, not just revenue from the social media or search service itself.

The offset mechanism in detail

The more commercially significant part of the legislation is the offset. A liable platform can reduce its NMI liability to zero if it enters into commercial agreements with Australian news publishers covering the use or production of news content. The offset is calculated by multiplying eligible expenditure by an uplift rate, then applying the result against the charge.

The uplift rates differ depending on the size of the news publisher. Expenditure with large news organisations is multiplied by 150 per cent before being applied as an offset. Expenditure with small or medium news businesses - defined using thresholds that extend the standard small business entity test to include entities with up to A$50 million in revenue - attracts a higher rate of 170 per cent. That differential is deliberate. According to the explanatory materials, smaller Australian news media organisations have less bargaining power and are less likely to reach commercial agreements, so the law applies a higher incentive to encourage deals with them.

Critically, a platform cannot offset its entire NMI liability through a single deal with one publisher. The draft law caps the offset from any single news business corporate group at one quarter of the total NMI payable. To achieve a full offset to nil, a platform must have eligible expenditure in relation to at least four separate news business corporate groups. That structural requirement forces platforms to spread their content payments across multiple publishers rather than concentrating them in a single large agreement.

Unused offset amounts can be carried forward to future financial years. If a platform overpays into a content deal in one year - producing an offset that exceeds that year's NMI liability - the excess retains its characteristics (small or medium business versus large) and rolls forward for use in subsequent years.

The explanatory materials include a worked example. A hypothetical platform with A$100 million in NMI for the 2025-26 financial year and deals spanning six news groups - including four small or medium publishers - can achieve a full offset to nil by carefully distributing up to A$25 million (one quarter of the charge) from each group. Excess amounts carry forward. In a subsequent year where the NMI drops to A$80 million, the platform uses carried-forward amounts alongside new expenditure but still cannot exceed A$20 million from any single group - resulting in a partial offset and an NMI balance of A$32.5 million.

Covered news content

The eligible content that triggers offset rights has a specific statutory definition borrowed from existing law. "Covered news content" must report, investigate, or explain current issues or events of public interest to Australians - at a local, regional, or national level. It encompasses content engaging Australians in public debate and informing democratic decision-making. This definition is drawn from Part IVBA of the Competition and Consumer Act 2010, which established the original News Media Bargaining Code.

Both registered news businesses and unregistered ones can form qualifying "news business corporate groups." Including unregistered entrants is deliberate policy. According to the explanatory materials, this ensures that new entrants are not excluded so as to promote diversity in the news sector and innovation in news delivery and funding models.

Anti-avoidance provisions

The draft law includes anti-avoidance rules covering any scheme entered into on or after 1 January 2025 - the same date the NMI measure was first announced - whose sole or dominant purpose is to reduce NMI liability or inflate offset amounts. The Commissioner of Taxation is empowered to make declarations negating any benefit obtained from such schemes. The declaration power extends across multiple financial years in a single instrument.

A scheme is defined broadly to capture any arrangement, agreement, understanding, promise or undertaking - whether legally enforceable or not - as well as any unilateral course of conduct. The Commissioner may treat events that happened as not having occurred, or events that did not happen as if they did, when making anti-avoidance determinations.

Administration and compliance

The Australian Taxation Office will administer the NMI. Liable entities must file a return within six months of the end of the relevant financial year, even if the NMI liability has been reduced to nil through the offset. The nominated entity giving the return must be both a member of the parent entity's service group and an Australian resident - a requirement that ensures an Australian entity is directly accountable to the Commissioner.

Payment is due 21 days after a notice of assessment is issued. Unpaid amounts attract a general interest charge from the day payment was due. Amended assessments generate shortfall interest charges on any additional amount, running from the day the original assessment was due until the day before the Commissioner issues the amended notice. An entity has 60 days to lodge an objection once an assessment is issued.

The NMI charge itself is not deductible for income tax purposes. However, non-capital expenditure incurred in managing compliance with the NMI - professional fees, for instance - remains deductible. Each member of a corporate service group is jointly and severally liable for the group's total NMI, which gives the Commissioner flexibility to pursue whichever entity in a group is most accessible.

Commencement and retrospective application

The three bills - the Administration Bill, the Charge Bill, and the Consequential Amendments Bill - all commence on the first 1 January, 1 April, 1 July, or 1 October after Royal Assent. Critically, the framework applies retrospectively. The NMI is payable for financial years ending on or after 30 June 2026, provided the platform's 12-month financial reporting period started on or after 1 January 2025.

According to the explanatory materials, the NMI measure was announced on 12 December 2024 to ensure affected entities were aware of the intended retrospective application. The announcement predates the draft legislation by more than four months, giving platforms a window during which they were expected to be aware of the impending framework even as the legal text was still being drafted.

Context for the advertising industry

The NBI sits within a broader pattern of regulatory pressure on digital platforms in Australia. The Australian Competition and Consumer Commission concluded a five-year Digital Platform Services Inquiry in March 2025, producing 35 recommendations that included new competition powers targeting designated digital platforms. The ACCC's 2026-27 enforcement priorities, outlined in February 2026, continue to press for progress on the proposed digital competition regime.

The financial context is substantial. Australian internet advertising reached A$18.4 billion in calendar year 2025, growing 11.5% year-on-year, with search advertising alone accounting for A$8 billion of that total. Google holds a 94% share of search in Australia. A 2.25 per cent levy on the Australian consolidated revenue of Google's parent entity Alphabet, and on Meta's Australian operations, would produce sums large enough to fund significant redistribution to news publishers - assuming neither company negotiates its way to a full offset.

The distribution mechanism for any money actually collected has not yet been finalised. The government is separately consulting on how collected charges would be returned to the news sector, with submissions on that question also closing on 18 May 2026. Stakeholders can submit through the consultation paper available at the Department of Infrastructure's website.

According to Communications Minister Anika Wells, "This is part of the Albanese Government's work to make sure our laws keep pace with changing digital technologies and deliver outcomes that are in the interest of the Australian public."

Assistant Treasurer Daniel Mulino framed the commercial deal model as a partnership rather than a penalty. According to Mulino, "Large digital platforms have an important role to play in providing access to news for all Australians and being partners in innovation, we would like to see them work with the news media on commercial deals with benefit to both parties."

For marketing teams and advertisers operating across Australian digital platforms, the NBI's structure creates a background financial incentive that could reshape how platforms approach publisher relationships, news inventory, and content licensing - well before any charge is ever collected.

Timeline

Summary

Who: The Albanese government, through the Treasury, released three exposure draft bills establishing the News Bargaining Incentive framework. Liable parties are parent entities of corporate groups providing significant social media or search services in Australia with Australian consolidated revenue above A$250 million. Google, Meta, and other major platforms are the primary entities in scope, though the law does not name them. Australian news publishers - registered and unregistered - are the intended beneficiaries.

What: A charge-and-offset framework that imposes a 2.25 per cent levy on the Australian consolidated revenue of qualifying digital platforms. The charge can be reduced to nil if the platform makes commercial payments to at least four separate Australian news publisher groups for the use or production of covered news content. Payments to small and medium publishers attract a 170 per cent uplift when calculating the offset; payments to larger publishers attract 150 per cent. Any money collected flows back to the Australian news media sector.

When: The consultation opened on 28 April 2026 and closes on 18 May 2026. The NMI applies from the financial year ending 30 June 2026, with retrospective effect from financial reporting periods starting on or after 1 January 2025. The bills commence on the first available quarter date after receiving Royal Assent.

Where: The NBI applies to services provided in Australia and to entities with Australian consolidated revenue above the threshold. The consultation is available at https://consult.treasury.gov.au/c2026-763377. The distribution mechanism consultation is separately available at the Department of Infrastructure.

Why: The shift of advertising spending to digital platforms has reduced the revenue available to Australian news publishers, undermining the financial model that supports public interest journalism. The existing News Media Bargaining Code allowed platforms to exit their obligations by removing news from their services. The NBI removes that exit and applies regardless of whether a platform carries news content, while creating a financial incentive structure designed to favour commercial deals over government-collected charges.

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