Big Tech Earns $27 Billion from Australians as Greens Propose Digital Services Tax
A new analysis by the Parliamentary Budget Office has revealed that the 16 largest tech companies generate $26.7 billion annually from Australian consumers. In response, the Greens are pushing for a 3% tax on digital service revenues exceeding $20 million in Australia, provided the company’s global revenue surpasses €750 million. This policy is expected to generate more than $11 billion in government revenue.
The report found that in the 2022-23 financial year, Google earned $8.7 billion from advertising and cloud services, Microsoft made $2.9 billion, Meta brought in $1.3 billion, and Amazon neared $6 billion across its various offerings.
Greens senator and communications spokesperson, Sarah Hanson-Young, emphasized that similar taxes have been successfully implemented in at least 12 other countries, including the UK, Canada, France, Italy, Spain, Austria, and Portugal. She argued that the revenue raised could fund essential public services like dental care under Medicare and provide cost-of-living relief.
However, the proposal faces significant challenges, particularly from the United States. Former President Donald Trump recently issued a memorandum to the US Treasury Secretary outlining concerns over what he termed "overseas extortion" targeting American tech companies. The memorandum explicitly named Australia and warned that any country imposing discriminatory taxes or financial penalties on US companies could face retaliatory tariffs and other measures.
The US directive highlighted the vast economic contributions of American tech firms, arguing that foreign governments are unfairly seeking to appropriate revenue that should benefit the United States. This stance has already complicated Australia’s efforts to implement a news media bargaining incentive, a policy designed to make social media giants pay for news content.
The Albanese government has yet to indicate whether the digital services tax will move forward before the next election. Meanwhile, the opposition has not been briefed on the news media bargaining incentive and has not yet taken a position on it.
During Senate estimates, Infrastructure Deputy Secretary James Chisholm acknowledged awareness of Trump’s memorandum, stating that the government would continue engaging with the US administration and industry stakeholders to align digital policies. Foreign Affairs Minister Penny Wong noted that negotiating exemptions in previous trade policies took considerable effort and that the current government faces an even steeper challenge. However, she stressed that Australia has a strong case to present to the US regarding its policy decisions.
With global tensions over digital taxation rising, Australia faces a delicate balancing act between generating domestic revenue and maintaining trade relations with the US.
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