The Greens party in Australia is proposing a 3% tax on the revenue generated by the largest technology companies operating in the country. A Parliamentary Budget Office analysis, commissioned by the Greens, indicates that the top 16 tech firms collectively earned $26.7 billion from Australian consumers in the past year. The proposed tax is projected to generate over $11 billion.
In 2022-23, the analysis found that Google made $8.7 billion through advertising and cloud services, Microsoft raked in $2.9 billion, Meta generated $1.3 billion, and Amazon earned nearly $6 billion across its various services. Under the Greens’ proposal, any digital service earning over $20 million in Australia would be subject to the 3% tax, provided the platform has worldwide revenue exceeding €750 million. The medium-term revenue for the government under this proposal would be $11.5 billion, according to the costing.
Greens senator and communications spokesperson, Sarah Hanson-Young, emphasized that the new funds could be used to support essential public services, such as dental care under Medicare, and provide cost-of-living relief. “We know this works overseas and it can work here. At least 12 other countries already have a digital services tax including the UK, Canada, France, Italy, Spain, Austria [and] Portugal,” she said.
However, any move to tax US tech companies faces a significant hurdle: potential opposition from the United States. Last month, former President Donald Trump issued a memorandum to the US Treasury Secretary focused on “defending American companies and innovators from overseas extortion and unfair fines and penalties.” The memorandum, which explicitly named Australia, warned that nations imposing discriminatory taxes or burdens on American companies could face tariffs and other retaliatory measures.
The memorandum highlighted the significant contribution of the US digital economy to the global landscape, stating, “In recent years, the gross domestic product of the United States’ digital economy alone, driven by cutting-edge American technology companies, has been bigger than the entire economy of Australia, Canada, or most members of the European Union.” The order added that foreign governments attempting to exert control over American companies in the technology sector were hindering their success.
The proposal has already generated concern regarding the news media bargaining incentive — designed to make social media companies pay for news content. The Albanese government has not given any strong indications that the policy will be implemented before the upcoming election. According to reports, the opposition has yet to be briefed by the government on the proposed incentive and has not yet finalized its position.
During Senate estimates last week, the infrastructure deputy secretary, James Chisholm, said the department was aware of the US memorandum, stating that they would “continue to engage with the administration and with industry to ensure that our respective digital policies are meeting our objectives.”
Foreign affairs minister, Penny Wong, also addressed the US position during Senate estimates, noting that the former Liberal government had taken significant time to negotiate certain exemptions. She indicated that the current government would face a more challenging task, but emphasized that a strong case could be made to the US administration. “We’re very conscious of the policies articulated by President Trump and his administration, and there are many avenues which are being utilised, some of which have been outlined today,” she said.
