Understanding the News Bargaining Incentive's distribution model

Last week the Government introduced - and the Parliament swiftly passed – both the News Bargaining Incentive (NBI) tax on digital platforms and a new payment scheme to divide up money it collects. This will see significant dollars flow to news media businesses under an entirely novel distribution model. If Google, Meta, TikTok and LinkedIn choose to pay all or part of the NBI instead of claiming a tax offset by making deals with Australian media, the scheme in the new News Journalism Payments Act 2026 will kick in, determining which media companies get a share of that money, and how much. 

Though the NBI Exposure Draft Bills were circulated several months ago, the bill for news journalism payments was unseen until this month. Its model is a first in the history of Australian government news journalism funding - and an international precedent. 

Compared to what was proposed in the government’s Consultation Paper, there are two key changes to how the fund will now be divided up. Firstly, 10 per cent will be sliced off the top, and shared equally between Australian Associated Press and a grants fund for small organisations under $150,000 revenue, which includes individual distributions as well as grants to industry organisations to redistribute to small media. Secondly, the formula to divide up the other 90 per cent between applicants registered under News Media Bargaining Code requirements will be based on a new definition of ‘eligible editorial workers’ instead of ‘journalists’, as previously proposed.

So let’s break down some of these new rules.

The formula

Each media company’s share of the fund will be based on its headcount of full-time employed (‘FTE’) eligible editorial workers, as a proportion of FTE eligible editorial workers employed by all media companies that applied for the scheme. 

This new and quite original definition goes much further than the proposal, or indeed journalism definitions previously used in Australian news funding schemes and media policy. It covers staff who work ‘primarily’ in Australia or its territories in an ‘eligible editorial role’ and do so ‘primarily in relation to core news content’. ‘Eligible editorial role’ includes anyone involved in ‘discovering, investigating, verifying, recording or reporting core news content’ or exercising editorial control over it. It specifically excludes those whose primary role is as a narrator, anchor or presenter, which many media companies had argued should be in, and opinion or commentary roles. 

‘FTE’ now includes not just employees but also ‘eligible freelancers’ who do similar work, and the Minister may make regulations to give them a different weighting to employed FTEs. There is also a limited scenario where companies with less than $300,000 revenue can count volunteers, but only if they employ them within three months of the fund payment period.

The formula will be adjusted by ‘weightings’ of 1.2x for eligible editorial workers in small to medium businesses with less than $50m revenue (up from the $10m figure floated in the consultation), regional or remote businesses or those serving diverse communities. The Minister can change the weighting amount through regulations, which will also define what’s meant by ‘diverse communities’. 

A number of submissions argued that the formula shouldn’t allow ‘double-dipping’ - where a media company has done deals with platforms and still gets a share of this fund - but there is nothing in the legislation to prevent this. 

Managing the News Journalism Payments scheme

The fund will be managed by the Department of Communications, with the ACMA responsible for registering media companies and sharing this information with the Department. Payments will be made to media applicants if there’s enough money in the fund; the threshold is defined as $1m but the Minister can vary it. If the fund holds more than $2m, there will be two payments that year. 

Once the NBI is up and running, the Department will publish a notice of available funds (based on the Treasurer’s advice) before the annual application process opens, which will presumably help smaller applicants work out if it’s worth the administrative effort to apply that year.

Obligations on media recipients

Media companies that apply for funds will have to provide evidence of their FTE editorial worker numbers and attest that they plan to retain them, and will be obliged to maintain those numbers during the following year. If circumstances change, they can notify the Department, which can disregard the shortfall if, for example, temporary vacancies are out of the company’s control and they took reasonable steps to fill the role. More details on what’s allowable may be included in regulations made by the Minister. This idea of ‘FTE retention’ was contested in numerous submissions, and while the legislation appears to be designed to address concerns that companies will be penalised for unexpected staff changes, this may not go far enough for some. 

Media companies that receive funds will have detailed reporting requirements, with significant civil penalties of 120 units (currently $43,680) for failure to report, alongside other civil penalties in the Bill.

Transparency

The Secretary of the Department of Communications will give a detailed annual report to the Minister to table in Parliament. The Minister is also required to undertake a review of the Scheme and table it in Parliament though, unlike for the NBI, the review is not required to be independent. 

There are multiple points on which the Minister can make regulations, so more details will emerge once the legislation is passed, and there will likely be more stakeholder consultation around the regulations. 

What didn’t change

While it has been reported that the Government and Opposition did a deal to get the NBI and related legislation through Parliament, some aspects were still contentious during the debate. The Independents and Greens proposed amendments suggesting a bigger slice of the news journalism fund for the smaller publisher grants component, and that those grants be open to publishers with up to $20m annual revenue. None of those amendments were passed.

What lies ahead?

Now the legislation is through, we still have to wait until the digital platforms make their choices: will they make deals, which will leave the News Journalism fund empty in future years? Or will they prefer to step away from deal-making altogether and pay the NBI tax, thereby funding the creation of this unique and original news funding scheme? Or will they partially offset the NBI tax? This could leave a small fund for media to compete for, or it could leave hundreds of millions per year to be administered and paid out by the Department of Communications, a first in Australian news funding history. All these scenarios seem to benefit the larger players. But if it’s the latter, very small media and AAP could, for the first time, have a dedicated and ongoing share of revenue of an unprecedented magnitude, quite unlike the smaller, short-term government grants for which they usually compete.

In its first year the Scheme may have significant funds to pay out as the NBI tax applies retrospectively from 1 January 2025, and at that time some platforms had pulled back from or not done offsetable deals. Beyond that, the position remains uncertain.

The gatekeepers' legacy

The NBI scheme was first proposed by the Government in December 2024. It has been a long time coming, and it’s complex. From the outset, the Centre of Media Transition argued for a simpler platform tax model that provided for fair distributions across the Australian media without the need for deal-making. But ongoing objections from the US administration, including those reported this week, suggest that the final design - linked to the existing NMBC - had at least something to do with trade considerations.

One criticism of the NMBC was that it put the power of deciding Australian media winners and losers into the hands of large global digital platforms. This time around, the platforms will decide if they choose bargaining partners or give some or all of their money to a scheme with its own unique formula. The mechanics of moving money between platforms and media will definitely change through the NBI scheme and, with at least two new platforms added in, there should be a larger quantum than under the NMBC. But the power hasn’t really shifted, which means that until the platforms make their moves, it will be hard to know who will rank in this latest set of winners and losers.