Google has threatened to remove its search engine from Australia over the nation's attempt to make the tech giant share royalties with news publishers.

Australia is introducing a landmark law to make Google, Facebook and potentially other tech companies pay media outlets for their news content.

But the US tech giants have fought back, arguing the laws are onerous and would damage local access to services.

Australian PM Scott Morrison said lawmakers would not yield to "threats".

The proposed news code would tie Google and Facebook to mediated negotiations with publishers over the value of news content, if no agreement could be reached first.

Google Australia managing director Mel Silva told a Senate hearing on Friday that the laws were "unworkable".

"If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia," she said.

Mr Morrison said his government remained committed to progressing the laws through parliament this year. At present they have broad political support.

"Let me be clear: Australia makes our rules for things you can do in Australia. That's done in our parliament," he told reporters on Friday.

"And people who want to work with that, you're very welcome. But we don't respond to threats."

Other lawmakers on Friday described Google's ultimatum as "blackmail" and "big corporations bullying democracy".

Why is Australia pushing this law?

Google Search is the dominant search engine in Australia and has been described by the government as a near-essential utility with little market competition.

The government has argued that because the tech platforms gain customers from people who want to read the news, the tech giants should pay newsrooms a "fair" amount for their journalism.

In addition, it has argued that the financial support is needed for the embattled news industry because a strong media is vital to democracy.

Australian print media has seen a 75% decline in advertising revenue since 2005, according to the government. Many Australian news outlets have shut down or cut jobs in recent times.

Google's threat to remove its primary product is its most severe yet, amid a debate that is being closely watched by other nations.

Earlier this week, US trade representatives urged Australia to drop the laws which they said attempted regulation "to the clear detriment of two US firms".