Tech companies will be forced to strike deals with Australian publishers or pay a new tax as the government plays “four-dimensional chess” to get the industry to fund news.

The federal government said on Thursday it would introduce a news bargaining incentive to force big tech companies with more than $250 million in Australian-based revenue to pay the Commonwealth or enter deals with publications, regardless of whether they carry news.

The charge, to take effect from January, will apply to Google, TikTok owner Bytedance and Facebook and Instagram’s parent company Meta.

Elon Musk’s X is unlikely to be included because its Australian-sourced revenue is less than $250 million.

Communications Minister Michelle Rowland and Assistant Treasurer Stephen Jones said the charge was designed to encourage companies to strike deals with news publishers, rather than drum up revenue for the Commonwealth.

“Michelle and I have been playing four-dimensional chess on this for 12 months,” Jones said in Sydney.

“We want to ensure that platforms involved and all news outlets can get on with doing deals and producing great journalism.”

The tax comes after Meta walked away from deals struck with Australian publishers, which could cost the industry $70 million.

As negotiations with the government came to a standstill, Meta representatives said it would consider banning all Australian news content from Facebook if it was forced to work with the news media bargaining code.

Despite the threat, Jones believed most platforms would work with the incentive.

“It wouldn’t be an economically rational decision to pay more under charge than you would need to pay under a commercial agreement,” he said.

“There’s benefit to both sides in entering into commercial agreements, and they’ll provide far more detail, far more each way in exchange of value than they would under a charge arrangement.”

Social media platforms once filled their feeds with news content to attract sign-ups and engagement, which pulled eyes and revenue from the source websites.

To try to bring money back to the publishers, the previous Liberal government established a world-first news media bargaining code that legally required digital platforms to negotiate commercial deals with eligible media outlets or face fines of up to 10 per cent of their local revenue.

But as user bases have grown, social media platforms have begun stifling news content and choking traffic to publications.

Instagram users must explicitly opt in to “political” content, Facebook has sunsetted its news tab and X has stopped showing news headlines and links on posts.

News Corp Australasia executive Michael Miller welcomed the incentive and said he would contact Meta and TikTok over commercial agreements.

“This will provide a foundation for rebuilding the media industry after the loss of an estimated 1000 jobs this year and ensuring Australian news media businesses will continue to deliver inquiring and professional journalism,” he said.

Meta, on the other hand, had some reservations.

“We agree with the government that the current law is flawed and continue to have concerns about charging one industry to subsidise another,” a spokesperson said.

“The proposal fails to account for the realities of how our platforms work, specifically that most people don’t come to our platforms for news content and that news publishers voluntarily choose to post content on our platforms because they receive value from doing so.”

TikTok also signalled its displeasure. It said it was “an entertainment platform [and] has never been the go to place for news. We will actively engage in the consultation process and look forward to hearing more details”.

-with AAP