Credit: Kobby Mendez via Unsplash
Much of tomorrow's federal budget relating to the media and advertising industry, currently suffering cautious ad spenders, has already been revealed, delivering bonuses to television networks and media owners.
What the industry will be watching is the extent of sweeteners to help dampen consumer angst from rising inflation, fuelled by the Middle east war, and from interest rate rises.
If Canberra goes too hard with handouts, inflation could take off.
Media Players already have their sugar hits.
Among them, the News Bargaining Incentive (NBI) brings the promise of revenue for media owners.
The legislation, now available for consultation, addresses a gap in the News Media Bargaining Code that has allowed digital platforms to avoid paying for content by removing news from their services.
The other one is extension of the freeze on the Commercial Broadcasting Tax for another two years to 2028, delivering an expected $111.3 million in savings for the commercial broadcasting sector.
The decision comes as free-to-air broadcasters face declining advertising revenue, intensifying competition from global digital platforms and significant cost pressures.
Under the NBI, digital platforms, including social media and search services, would be encouraged to do commercial deals with eligible news publishers, with 'generous' offsets provided to reduce liabilities.
Platforms that choose not to partner with the news outlets would face a charge of 2.25% on their Australian revenue if it exceeds $250 million, with charges collected redistributed back into the news media sector.
Media analyst Steve Allen at Pearman said the key to the budget will be the knock on effect if the government decides on further stimulus into the economy via some form of household cost-of-living relief.
“The rumoured salary earned income offset bonus would definitely contribute to inflation, as it would increase consumer demand (in a constrained economy),” he said.
“As would various measures that state governments are active in. This makes for a very combustible inflation outlook.
“As (RBA governor) Michelle Bullock pointed out in her post-announcement press conference, the extent to which Government(s) make up the shortfalls for households by giving them more money, it makes it harder to dampen demand.
“Australia (as are other nations) will be caught in a higher cost of living situation for the next six months.
“Government stimulus is like putting gasoline on a lit fire. Australia has a lit fire with inflation already out on the loose, which is why we have already endured three consecutive RBA sash rate rises.
“If we slide into recession,…media/marketing/advertising will suffer, it always does. And it usually suffers proportionally more than other sectors of commerce.
“Already, advertisers are cautious, as was flagged in Matt Stanton's Nine Entertainment comments at Macquarie Bank Investment Conference.
“We can expect a lot more of that. And if recession hits (should be mild fortunately) the main media revenue markets (excluding digital, but even this sector will suffer) will pull back sharply….circa 10%.”
Australia’s national budget usually does very well when commodity prices rise, as they are with the Middle East conflict.
According to the May 2026 edition of Deloitte Access Economics’ Budget Monitor report, one of the uncomfortable implications of global conflict is that Australia’s budget position usually comes out a winner.
“That’s likely to be the case again in light of the Middle East conflict, but the downside risks are also substantial,” Deloitte Access Economics said.
“The federal budget is structurally flawed. The revenue windfalls of recent years – a result of soaring commodity prices and surging inflation – temporarily papered over Australia’s precarious fiscal position. But even another commodity and inflation boost cannot cover up the fiscal cracks.
“Economic developments that deliver sugar hits on the revenue side will jeopardise the budget’s health elsewhere.
“A sustained oil supply shock could substantially slow demand, while the Reserve Bank of Australia (RBA) may have to hike interest rates further than anticipated.
“That risk is more likely if there is heavy-handed support for households in the budget, which could drive inflation higher.
“As it stands, the government has maintained a relatively tight grip on new spending measures in the lead up to the budget. The main response to the cost-of-living crunch has been a reduction in fuel excise, which hits the revenue side of the ledger.
“Time will tell whether the treasurer can keep spending demands contained in the budget itself, and indeed over coming months, if the economic outlook deteriorates further.”
The RBA’s Monetary Policy Board noted that higher fuel prices were already adding to inflation, and there are early signs that many firms experiencing cost pressures are looking to pass on price rises to consumers. The RBA is watching this ‘second-round’ effect on prices very carefully.
“For the budget, the rate hike will drive up the cost of servicing Australia’s public debt while simultaneously squeezing household budgets and dampening consumer demand,” Deloitte said.
Cost-of-living relief is likely to be a theme of the budget, yet over delivering on that front could prolong the inflation problem.
“The treasurer now faces the unenviable task of helping households without doing so much that the RBA is forced to tighten further.”
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