Washington: Veteran Republican political activist Grover Norquist says the Australian government’s News Bargaining Incentive is a “big deal” for the Trump administration and Canberra should expect to be hit with a trade investigation and potential penalties shortly.
Norquist, who founded Americans for Tax Reform in 1985, also took aim at Australia’s local content quota for streaming giants such as Netflix, saying it was the policy of “loser countries” that have to compel media companies to cover their cultural stories.
Republicans in Congress are now joining calls to take action against Australia, including congressman Scott Fitzgerald of Wisconsin, who introduced legislation to shield US tech companies from foreign regulations.
“The United States will not sit idly by while foreign regulators impose excessive, discriminatory fines on American companies,” he told this masthead. “Any extraterritorial policy that singles out American tech companies will be met with a strong US response.”
Legislation for the News Bargaining Incentive was introduced last week. While it does not explicitly target US companies, it applies to platforms with a significant presence in Australia, most of which are American – such as Meta, Google and Microsoft.
The policy applies a 2.5 per cent tax on the companies’ local advertising revenue – to be used to pay for news journalism – unless they strike deals with local media owners.
“This is a rerun of what the Europeans have done: targeting American companies with taxes in violation of our trade agreements,” Norquist said in an interview.
“They’re treating American companies that are successful as if they were a piggy bank that can just be robbed.”
He compared it to Britain trying to tax the colonies in the 1700s, leading to the American Revolution.
“This is a tax on American companies by a foreign power. We’re probably not going to start shooting at you, but that’s what we did with the British.”
The policy has already attracted the ire of the Trump administration. The White House has labelled it “foreign extortion”, and US trade representative Jamieson Greer raised it with Trade Minister Don Farrell on a call nearly two weeks ago.
Norquist said concern about the policy went “very high” in the US government, and he expected a Section 301 trade investigation – a precursor to tariffs or other penalties on Australia – to be opened shortly.
“It’s my understanding that that’s the obvious thing that happens next,” he said. “Exactly what Europe did to screw the United States, Australia is trying to do. And I thought we had a better relationship with Australia and New Zealand than we did with Europe.”
Trump announced a Section 301 trade investigation into Europe’s Digital Markets Act in July, but so far, it has not been initiated. The White House and the Office of the US Trade Representative didn’t respond to inquiries.
The Australian embassy in Washington is aware of the threat but it believes the News Bargaining Incentive does not figure prominently among the White House’s priorities. It’s understood the matter was not raised during a phone call between US President Donald Trump and Prime Minister Anthony Albanese earlier this month.
Publishers including Nine, the owner of this masthead, say the tech giants profit from news content and should contribute to its creation, while the tech companies say publishers voluntarily share their content for the eyeballs delivered by their platforms.
Albanese has called the policy an “absolutely essential reform”, and he has said companies can offset the levy by striking deals with publishers.
“We’re a sovereign nation, and my government will make decisions based upon the Australian national interest. We do that right across the board,” he has previously said.
But Norquist said the issue of burdensome regulations and taxes on American tech companies could harm the US-Australia alliance.
“It is a big deal. When the president talks about ‘how come we do all this stuff for other countries and they screw us’, this is what he’s talking about,” he said.
“We spend a lot more on defence than these other guys do, and they expect us to pick up the pieces when they’re not doing their job of defending themselves, and then we turn around and these guys have their hands in our pocket.
“I don’t think the Australians understand how big a deal this is. I think they need to go talk to the Europeans. This does not go away, this is not subsumed by something else, this is not traded off for something else.”
Norquist would not divulge the financial supporters of Americans for Tax Reform in standing with the group’s long-standing policy.
But tech companies including Meta and Google are members of industry groups such as the Computer & Communications Industry Association that have been lobbying the Trump administration to take action.
Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.
Michael Koziol is the North America correspondent for The Age and Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political reporter in Canberra.Connect via X or email.From our partners
Discover more from PressNewsAgency
Subscribe to get the latest posts sent to your email.