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Xenophon’s formula for saving Australian media jobs

In this week’s column, Nick Xenophon’s policy push to save Australian journalism jobs remains a chance to get through the Senate. But will the public accept tax breaks for the media?

Jul 21, 2017, updated Jul 21, 2017

Why journalism should be treated like R&D

South Australian Senator Nick Xenophon remains the Federal Government’s main hope for saving its media reform package, which has the support of the big media companies but has raised concerns about a decrease in media diversity.

As we have reported previously, a key change would abolish the so-called “two out of three” rule which currently prevents someone owning more than two of the three regulated forms of media – commercial radio, commercial TV and newspapers – in one market. The reforms, which have passed the House of Representatives, need cross-bench support after Labor announced its opposition. Xenophon and his party colleagues are obviously in a strategically important position and he has offered a compromise position.

Most of the attention has been on Xenophon’s plan for a Robin Hood tax Google and Facebook, who he believes have spirited away billions of dollars worth of advertising from traditional news outlets while using their content to build powerful platforms.

However, a second Xenophon reform has much more potential to ease the squeeze on smaller newsrooms and those engaged in “public interest” journalism – the prospect of providing a tax offset for investment in journalism, similar to those afforded for Australian research and development.

And there’s evidence that this idea could garner political support.

A Liberal senator, Victoria’s young but influential James Paterson, this week argued that there was merit in the idea of using the tax system to support media companies, by allowing deductions for donations to not-for-profit outlets, or rebates for companies who invest in news.

Xenophon told InDaily he was uncomfortable with letting the two-out-of-three rule go without doing something to protect media diversity, and his proposed tax measures might offer the antidote to plummeting revenues, particularly for smaller outlets, regional and community newspapers.

“I see this as similar to R&D,” he said.

“If we value R&D in terms of what it contributes to the nation, we should do the same for journalism.

“If you accept that we need a strong fourth estate for democracy, we should give it the same tax breaks as those for R&D, if not more.”

Xenophon is disturbed by the bleeding of journalism jobs, including in his home state of South Australia.

“I want there to be more journalism, rather than less in South Australia.”

While nothing is certain in this vexed area of policy, Xenophon is hopeful.

“We will get a pretty good idea about where we’re at over the next month,” he said. “The larger players are warming to this.”

The public might be another problem, however.

According to the 2017 Essential Research trust in media survey, public trust in the media has hit an all-time low.

Of course, taking at least some commercial pressure off out media outlets may improve standards, and therefore lift trust.

Overseas examples of government support for journalism

Senator Paterson pointed to the United States, where new experiments in public interest journalism are taking advantage of the same tax breaks offered to think tanks (the Texas Tribune, mentioned in this column recently, being a notable example, that relies on tax deductible donations and memberships).

A submission from the Journalism Education and Research Association Australia to the Senate inquiry into public interest journalism, detailed a fascinating list of nations whose governments support independent journalism in some way (beyond public broadcasters).

Its submission argued that there was a significant body of academic work that showed government funding and support for journalism – in liberal democracies – did not compromise the integrity of public interest journalism.

In Austria in 2015, the government distributed 54.7 million euros in support of public interest journalism, with publishers of daily and weekly newspapers eligible to apply for government funds.

In Belgium, the government provides a wide range of indirect and direct measures to support newspapers, including providing a VAT exemption for newspapers and magazines that provide informative content to the public.

France has “the oldest and probably the most complicated system of press support in Western Europe”. As well as providing support for distribution of newspapers, France has a fund to support press with low advertising income, and provides tax relief, and free weekly newspaper subscriptions for 18-24 year olds. In 2014, direct and indirect support for the French media totalled more than one billion euro.

The paper lists many other countries and makes interesting reading.

Media Week is a regular column about the South Australian media, marketing and PR industries.

 

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