The federal government has quietly delayed plans to introduce local content requirements for major streaming platforms, with no indication of when it might return to work on the policy.
Local content quotas were a centrepiece of Labor's major arts policy, which was aimed at rejuvenating the local industry after the pandemic and released nearly two years ago.
However, concerns about how the policy might interact with Australia's free trade deal with the United States are being pointed to as a primary concern.
Advocates for local content rules have accused the streaming platforms of seeking to "weaponise" the trade deal to block changes.
The plans have already been delayed by months, with the government initially hoping to have the new rules in place by July 1, 2024.
Some industry stakeholders now expect the policy to be delayed until late next year at the earliest, after the next federal election.
There had been speculation the rules would have required the streaming giants, such as Netflix, Amazon, Paramount and others, to spend a percentage of their revenue producing local content.
The government was consulting with streaming platforms and advocates for local creative industries on models earlier this year.
Arts Minister Tony Burke told Labor's caucus on Tuesday that the interaction of any new local content rules with the US free trade deal was a stumbling block.
On top of that, the timing of the US election has made it difficult to negotiate that problem with the US directly.
Arts Minister Tony Burke says local rules need to work with US trade rules.
Screen Producers Australia, which has lobbied heavily for local content rules for streaming platforms, expressed some hope the trade problems could be resolved.
Chief executive Matthew Deaner argued streaming platforms had been relying on the free trade issues to try to stall the changes.
"There's little doubt that the mostly US streaming businesses have been weaponising the [US free trade deal] to delay the promised regulation this year," he said.
"Australia hasn't been afraid to take on powerful interests in the past … we need to find that resolve again or these digital platforms will continue to play by their own rules and ignore local audiences.
"This situation is denying Australian audiences access to their own screen content and making business conditions challenging for many independent producers."
There was a suggestion from Mr Burke that key stakeholders were happy not to see the policy rushed to avoid any problems with its implementation.
While some key industry figures are disappointed by the delays, they agree it would be a problem to see the changes bungled.
Greens senator Sarah Hanson-Young was, however, scathing of the delays and the suggestion the US is to blame.
"We shouldn't be letting the Americans dictate whether or not we protect and support our Australian stories and culture," she said.
"The Albanese government has broken its promise to the screen sector and audiences in Australia. They've missed the July 1 deadlines and now the whole thing has been put in ice.
"These tech giants need to be regulated before we lose more jobs, more stories and more of our local, domestic culture."
In a statement, a spokesperson for the Department of Infrastructure, Transport, Regional Development, Communications and the Arts said the delays were unfortunate but work on the policy was continuing.
"The government is undertaking a genuine consultation process and is taking the time to consider views about the best way to support ongoing investment in, and production of, Australian stories," he said.
"Consultation is taking longer than we would have liked, but we are determined to get this right.
"The Government is aiming to introduce legislation as soon as practicable."