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Tuesday, 23 August 1994
Page: 125

(Question No. 1378)

Senator Bourne asked the Minister representing the Treasurer, upon notice, on 5 May 1994:

  (1) Is the Minister aware of a study published in Communications Update showing that newspaper cover price rises have substantially outstripped inflation since 1984.

  (2) Given that newspapers provide a unique community service, in reporting and analysing news events and in carrying such information as public notices and job advertisements, does the Minister accept that there is clear public interest in ensuring that cover price rises are kept within reasonable bounds.

  (3) Does the Minister accept that the case for rigorous newspaper cover price control strengthened by the 1992 findings of the House of Representatives Select Committee on the Print Media that `barriers to entry into print media markets . . . are very high for metropolitan and national daily newspapers', and that competition between a new `niche' publisher and a major publishing group `could only be at the margin—both in terms of influencing public opinion and affecting price and quality'.

  (4) Does the Minister accept that there is a prime facie case for investigating newspaper cover price rises to ensure that increases over the past decade do not amount to an abuse of market power.

  (5) Does the Minister support a Prices Surveillance Authority inquiry into newspaper cover prices; if not, why not.

Senator Cook —The Assistant Treasurer has provided the following answer to the honourable senator's question:

  (1) Yes.

  (2)—(5) The newspaper industry is concentrated and while newspaper cover prices have increased at a faster rate than inflation I am, nonetheless, not in favour of an inquiry at this time into the newspaper industry.

  Price increases in excess of inflation do not in themselves indicate misuse of market power by the newspaper industry. The April Communications Update acknowledged that price increases can reflect a wide range of factors—including improvements in products and corporate specific factors such as debt levels.

  Furthermore, while newspapers play an important role in keeping the community informed, now more than ever before they are only one source of information. The emergence of new independent papers and magazines, the reach of teletext into homes and businesses, the plethora of magazine style television programs, computer bulletin boards et cetera point to an increasingly dynamic and diverse information industry. Competitive forces, such as these, and other factors such as advertising revenue, have a bearing on the cover prices of newspapers.

  That said, the Government accepts that there may be a case to review prices in the newspaper industry, particularly if prices continue to rise. Such an inquiry would be time consuming given the complexities involved. The PSA already has a substantial workload in the lead up to establishing the new Australian Competition Commission. In particular it is conducting a review of all existing declarations under the Prices Surveillance Act and I regard this review as a matter of priority. The question of whether newspaper cover prices should be examined will be looked at after the declaration review is concluded.