Attention local media carpers: Here’s why former Coalition Finance Minister Mathias Cormann might be your hero running the OECD
There’s a vocal camp in the advertising, media and related tech industries that are appalled at the ACCC and Federal Government over its bold and brash plan to force Facebook and Google to pay local media for news. Disdain for News Corp aside, they want a broadly applied digital tax. Impossible, until now.
The undercurrents of industry resistance to the ACCC and Federal Government’s world-snapping media bargaining code are widespread and palpable in the shadows of adland.
News Corp is a lead trigger for the critics.
In private conversations, they don’t like the behaviour of the Murdoch empire and its influence here on government; its perceived entwinement of commercial and editorial agendas; its governance of Fox News in the US and; the damaging and rightfully outrageous past scandals like those of The News Of The World’s phone hacking ploys which ultimately saw the Murdochs shut down their British cash cow.
Adland’s critics also don’t like Nine because it’s big and chaired by former Coalition Federal Treasurer Peter Costello (they put aside, of course, that Nine owns the former Fairfax mastheads and that a banking Royal Commission and the current regulatory raid on James Packer and Crown Casino are just two direct results of investigative journalism from the very company built by the Packers).
The rub from the critics is: Why force Big Tech to subsidise and prop-up Big Media when the government should simply collect a digital services tax from Big Tech?
But the realities of that premise are wrong.
As I’ve said previously, France tried that in 2019 with a 3% levy on US tech giants like Google, Amazon and Facebook. The US retaliated, threatening tariffs on $2.4bn of French exports including cheese and champagne.
It’s just not so simple as adland’s Big Tech supporters argue.
In the UK, a 2% tax on Silicon Valley tech company sales, introduced last year, has resulted in those companies passing on those profit impediments to advertisers and sellers. Not much a beholden advertiser can do about it either.
But it’s extraordinarily naïve to belt News Corp for what many believe to be bullying and divisive behaviour yet effortlessly look over the same game Big Tech is deploying in market power terms and social impact.
But in a great twist of irony, it may well be a former Coalition Finance minister that delivers for the critics of Big Media on a global digital tax regime.
A couple of weeks back Mathias Cormann pulled off a coup by becoming the next secretary-general of the Paris-based OECD (Organisation for Economic Co-operation and Development).
Exactly because of the risk of trade wars like the one between the US and France over its digital services tax, more than 100 countries handed the OECD remit to design a new global accord for a tax on multinational tech giants. It could deliver $135 billion in extra revenue for tax collectors the world over.
And Mathias Cormann now has that baton.
Given Australia has shown the world how to hold your own in a street fight with Big Tech, there’s a fair chance Cormann, regarded on both sides of politics, might punch this one through.
Australia’s media critics could yet have their dreams come true. A digital tax for all.
But don’t blame government for bad Big Tech behaviour. After all, it’s the global advertising industry that has funded everything we see today from Silicon Valley.
Adland is Big Tech’s sugar daddy.
Specsavers head of market and planning, Shaun Briggs, needed a big brand hit to kick-start life after Covid. MAFS was hardly love at first sight. But it quickly grew – literally – as the brand, its agency AJF Partnership, and Nine’s Powered creative unit delivered a bespoke integration within weeks. For Briggs, “it’s been an eye opener”.