The government will introduce legislation that triggers an arbitration process if large digital players such as Google and Meta, which owns Facebook and Instagram, fail to strike deals with New Zealand publishers, broadcasting minister Willie Jackson has announced. Speaking on Q&A, he said he expected between $30m and $50m to come into the New Zealand market in recognition of the online giants’ use of material produced by local outlets.

Jackson said the legislation, as witnessed in similar approaches in Australia and Canada, was designed as a “backstop”, in the hope that digital players would strike deals to avoid the legislative solution. He said he anticipated companies would be given about three to six months to reach an accord and “if there’s not an agreement then a mandatory mediation and arbitration process will be put in place, to make sure a fair deal is rolled out”.

He said the BSA would be tasked with regulating the new mechanism, with a view to ensuring funds went to journalism rather than shareholders. The Commerce Commission has authorised local media, including The Spinoff, led by the News Publishers’ Association to engage in collective bargaining with Meta and Google.

In a statement issued after his interview aired this morning, Jackson said: “It’s not fair that the big digital platforms like Google and Meta get to host and share local news for free. It costs to produce the news and it’s only fair they pay. New Zealand news media, particularly small regional and community newspapers, are struggling to remain financially viable as more advertising moves online. So it is critical that those benefiting from their news content actually pay for it.”

He continued: “We don’t want a system where only the big players can get a deal. The Australian competition regulator found the big online players have substantial bargaining power, so we need legislation to sit behind any voluntary negotiations that helps to level the playing field. While some deals have been reached voluntarily, small regional, rural, Maori and Pacific and ethnic media outlets are likely to miss out, so this is about ensuring everyone gets a fair go.”

He said: “This is a pragmatic approach, consistent with how other countries are working to ensure local media get a fair price for the news they create. We hope the online platforms engage positively with it and reach high quality voluntary agreements that support local content generation, without the legislation needing to be used.”

Cabinet will take the decision whether to extend the current cut to fuel excise taxes before the end of the year, said finance minister Grant Robertson, who warned that any further extension would be brief.

He told Q&A’s Jack Tame: “We will make our judgment very shortly around whether or not we think it can be extended, but if it does, that won’t be for a long period of time. Because ultimately we need that money for the long term for the things New Zealanders really want and need.”

The ending of the tax cut was a factor in the Reserve Bank’s high inflation projections, he acknowledged. “In the end, there’s no costless decision here, because that money is the money that pays for our roads. There’s the money that pays for our private transport, so it can go on forever.”

He also confirmed the government had no plans for further cost of living payments.

Noting that the 2022 budget had “clearly signaled that the emergency spending that had been associated with Covid, things like the wage subsidy scheme and so on, that was all disappearing”, he warned that planned cuts to spending would “make for a very tight budget” in 2023.

The controversial clause that entrenched public ownership of the new water entities in the three waters legislation, requiring 60% of MPs for its repeal, will be chucked out. “It was a mistake to put the entrenchment clause in and the government will fix the issue as soon as the House resumes on Tuesday,” leader of the house Chris Hipkins said in a statement. “We will do this by sending the Water Services Entities Bill back to the Committee of the Whole to remove the entrenchment provision.”

The entrenchment, which came in a supplementary order paper at the committee stage, lodged by the Greens while parliament was in urgency, was widely criticised by public law experts. It was a shift from the norm on entrenchment, which had previously been limited to electoral laws and set at 75%, reflecting support from the two main parties. In this case, it did not have the support of National (which stresses it does not intend to privatise water) and Labour for the most part appeared not to know what it was voting on.

“The approach in this amendment allowed an entrenchment provision to pass in a way that is not typical for parliament. That has wider ramifications that we are not comfortable with. That’s why we will fix the issue,” said Hipkins. “It’s also important parliament strengthens the rules around entrenchment generally to avoid this in the future. As such we will refer the wider matter to the Standing Orders Committee, where all parties are represented, in order to strengthen the protections for entrenchment provisions.”

Speaking on Q&A this morning, Grant Robertson rejected the suggestion the mistake was a result of pursuing legislation under urgency, but said: “I think what we’ve all recognised here is when you’re detailing with entrenchment you’ve got to be particularly careful.”

“Sanity prevails on the three waters entrenchment debacle,” said the shadow leader of the house, Chris Bishop, on Twitter. “Good to hear Chris Hipkins say it was a mistake. Government will do what we’ve said they should do from the start – refer back to committee to remove.”