Prime Minister Anthony Albanese on Tuesday unveiled draft laws for the news bargaining incentive, which encourages agreements to be struck between tech giants and media companies.
If deals are struck between the companies for content, the social media platforms will only pay 1.5 per cent of revenue to the government, compared with a higher amount of 2.25 per cent if no deal is made.
Australian journalism needed to be properly paid for by tech companies, Mr Albanese said.
"Our government is taking the next steps to ensure that Australian journalism is sustainable now and into the future, by ensuring that large digital platforms cannot avoid their obligations," he told reporters in Canberra.
"What we are encouraging is for organisations to sit down with news organisations, get these deals done, and then we can move forward."
A Google spokesman said the company already had agreements in place with media organisations in Australia.
"While we are currently reviewing the draft legislation, we have been clear: we reject the need for this tax," the spokesman said.
"(The proposal) misunderstands how the ad market has changed, and mandates payments from some companies while arbitrarily excluding platforms like Microsoft, Snapchat and OpenAI, despite the major shift in how people consume news."
Meta, the parent company of Facebook and Instagram, also rejected the proposal.
"A government-mandated transfer of wealth from one industry to another, with no connection to the value exchanged, will not deliver a sustainable or innovative news sector," a spokesman said.
The draft laws were released ahead of the legislation being introduced to parliament in coming weeks.
The deals would be offset by 150 per cent if agreements are struck with large media organisations, and 170 per cent for smaller newsrooms or non-traditional outlets.
"Investment in journalism is critical to a healthy democracy. It matters," Mr Albanese said.
"If the work has been done by the people here at this press conference, in other places right around Australia, then your work needs to have a monetary value attached to it.
"It shouldn't just be able to be taken by a large multinational corporation and used to generate profits for that organisation with no compensation appropriate for the people who produce that creative content."
A previous version of the news bargaining code was rolled out in 2021 by the Morrison government.
However, social media companies such as Meta walked away from deals with Australia news outlets in 2024.
Communications Minister Anika Wells said a changed deal was needed as the media landscape evolved.
"People are increasingly getting their news directly from Facebook, from TikTok and from Google," she said.
"We believe it's only fair that large digital platforms contribute to the hard work of journalism that enriches their feeds and that drives their revenue."
In a joint statement, Australian media organisations said the reforms would be a crucial step to securing the future of journalism in the nation.
The statement from the ABC, Nine, News Corp, SBS, The Guardian, Channel 10, Southern Cross and Australian Community Media said tech platforms needed to come to the table.
"If digital platforms fail to pay for the use of the news content from which they profit then journalism becomes unsustainable," it said.
"It is also in the public interest that reliable, professionally created news and information remains accessible and visible on the digital platforms used by millions of Australians."
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