Why is Labor icing its tech levy — and what does Rudd have to do with it?

The Albanese’s government barely three-month-old initiative to put pressure on US tech giants risks being put on ice as the reality of the second Donald Trump presidency sets in. 

On Monday morning Nine newspapers reported Albanese has decided to “go slow” on its news bargaining incentive due to fears Trump won’t exempt Australia from his tariffs on aluminium and steel exports.

So what is the news bargaining incentive, why has it become embroiled in the tariff negotiations, and what does Kevin Rudd have to do with it? Crikey explains. 

What’s the news bargaining incentive all about?

Communications Minister Michelle Rowland announced in December the government would establish a new system to encourage digital platforms to strike deals with news publishers. She said a previous policy aimed at helping news outlets survive in today’s digital environment — the 2021 news media bargaining code — had “limitations” that needed addressing. Specifically, she pointed out the code allowed platforms to choose to remove news rather than pay publishers for distributing their content. 

“This is not in the best interest of Australians. A significant proportion of Australians use digital platforms to access news, and we want this to continue,” Rowland said.

The news bargaining incentive would impose a charge on platforms that choose not to enter into, or renew, deals with news publishers. Google reacted by calling it a “targeted tax” that would jeapordise existing commercial deals with Australian publishers.

Meta, which said last March it wouldn’t renew its deals with Australian news outlets, also expressed concern about the proposal. 

“The news bargaining incentive would be a much neater and clearer way to decide the argument with tech companies than the bargaining code — you just have a set tariff, and that money would then fund public interest journalism,” Monash University journalism associate professor Johan Lidberg told Crikey. 

How has Trump’s election impacted the play?

Rowland said in December that consultation on the proposed new incentive would begin in early 2025. However, in January, Trump sat back down in the Oval Office and immediately put the Albanese government on edge.

Last week, Trump announced a 25% tariff on steel and aluminium imports to the US, including Australia’s. Despite a well-timed phone call with Albanese, the prime minister has not yet managed to secure an exemption to those levies. Trump, who has said trading partners who impose tariffs on the US will be hit with reciprocal levies, would only go so far as to promise Albanese he would consider an exemption for Australia.

Suddenly, making enemies of US tech giants seems risky. 

A media executive who spoke to Nine newspapers on condition of anonymity said Labor had “indicated in private the delay [on the news bargaining initiative] was driven by caution on any pronouncement that could be seen as punishing US firms”.

A government spokesperson was quoted as saying: “The government is continuing to work constructively with stakeholders on the news bargaining incentive.”

What’s Kevin Rudd got to do with it?

One of Australia’s key negotiators in all of this is US ambassador Kevin Rudd, the former Labor prime minister who has waged a campaign against News Corp and been critical of Trump in the past. Rudd has been under fire from the Coalition, which has flagged it might remove him as ambassador if it wins the next election.

Rudd’s comrade in the campaign against News Corp, ex-Liberal prime minister Malcolm Turnbull, told The Saturday Paper at the weekend that the Murdoch-owned publishing giant was amplifying the Coalition’s criticism of Rudd as part of a “right wing … angertainment ecosystem”.

“It’s a campaign. It’s a vendetta against Rudd by his critics and detractors,” Turnbull said. “Kevin has campaigned against News Corp’s malign political influence and spoken out against it — as, indeed, I have. They’re campaigning against him.”

According to the Monday morning Nine report, Rudd has been playing a “central role” in trying to calm the US about the effect of the news levy.

Capital Brief reported last month that Assistant Treasurer Stephen Jones had reached out to both the Joe Biden administration and to Trump officials ahead of the announcement of the news bargaining incentive in December, underscoring the delicacy of the issue as Meta owner Mark Zuckerberg and X owner Elon Musk grow ever closer to Trump.

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