Greens Target Tech Giants with Proposed Tax
The Greens party in Australia is advocating for a 3% tax on the revenue of major tech companies operating in the country, targeting revenue earned from digital services exceeding $20 million.
A recent analysis, commissioned by the Greens, revealed significant revenue figures for tech companies in Australia throughout the 2022-23 fiscal year. Google earned $8.7 billion from advertising and cloud services, while Meta generated $1.3 billion.
The proposed tax would apply to companies generating more than €750 million in worldwide revenue. If enacted, the Greens estimate this tax could generate $11.5 billion for the government in the medium term.
Senator Sarah Hanson-Young, the Greens’ communications spokesperson, highlighted the potential benefits of the proposed tax. She suggested the funds could be allocated to vital public services such as dental care under Medicare and cost-of-living relief.
“We know this works overseas and it can work here,” Hanson-Young stated, noting that at least twelve other countries already have digital services taxes in place, including the UK, Canada, France, Italy, Spain, Austria, and Portugal.
Potential Hurdles and US Opposition
A significant obstacle to the Greens’ proposal may be the stance of the United States. In a November memorandum, former President Donald Trump expressed concern regarding potential discriminatory taxes on American tech companies.
Trump’s memorandum cautioned that countries imposing “a fine, penalty, tax, or other burden” designed to transfer funds or intellectual property from American companies could face retaliatory tariffs and other actions.
The order emphasized the economic importance of the US digital economy, stating that it has surpassed the entire economy of Australia, Canada, and most European Union members.
Foreign Affairs Minister Penny Wong acknowledged the former Liberal government needed time to negotiate carve outs, and the current government would have “an even greater hill to climb” but said there was a “strong case to put to the US administration”.
Broader Implications
The proposed tax comes at a time when existing policies, such as the news media bargaining incentive, are facing challenges. The incentive, designed to compel social media companies to compensate for news content, has encountered obstacles, and the government has not signaled a clear commitment to its implementation before the next election.
In Senate estimates last week, infrastructure deputy secretary, James Chisholm, said the department was aware of the memorandum and said: “We will continue to engage with the administration and with industry to ensure that our respective digital policies are meeting our objectives.”
