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Trade Practices Act: Malcolm Fraser's media ownership comments



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JOHN HOWARD, M.P.

M EM B ER FOR BENNELONG

NEWS RELEASE SHADOW MINISTER FOR INDUSTRIAL RELATIONS, EMPLOYMENT 6» TRAINING IRET 64/91

TRADE PRACTICES ACT: MALCOLM FRASER'S MEDIA OWNERSHIP COMMENTS

Recently, in his comments on the concentration of media ownership, Malcolm Fraser has repeatedly claimed that the 1977 change made by his government to the merger provision of the Trade Practices Act had been a disaster.

According to Mr Fraser the change in question, which substituted a test of control or domination of a market for the previous lessening of competition test, had the consequence inter alia of facilitating the 1986 takeover of the Herald and Weekly Times group of newspapers by Rupert Murdoch's News Limited.

As the Minister in the Fraser Government responsible for the 1977 change I remain strongly of the view that it was absolutely right.

The new merger test inserted into the Trade Practices Act in 1977 was one of a whole series of changes to that Act designed to reduce the amount of regulation then affecting the business community in Australia.

I specifically recommended to the then government that the previous merger test be removed because I believed it to be far too restrictive for an economy as small as that of Australia's.

If mergers and takeovers are made too difficult then complacent, lazy, established managements can continue in comparative invulnerability.

Significantly, at no stage in the five years of the Fraser Government which elapsed after the 1977 changes was there any questioning of the wisdom of the new merger provision.

Such questioning did not arise in 1979 when Rupert Murdoch's News Limited attempted a share market takeover of the Herald and Weekly Times.

In fact at that particular time the former Prime Minister said that regulation of newspaper ownership was a matter for the States.

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COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

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The Hawke Government has not seen fit to change the merger test in the Trade Practices Act.

I understand that the current Attorney-General's view is similar to mine.

The issue was also investigated by a parliamentary committee which reached the same conclusion.

It is impossible to know whether or not the pre-1977 merger test would in fact have prevented the 1986 Herald and Weekly Times takeover.

Much would have depended on the appropriate definition of "the market" chosen by the authorities.

In any event, it should not be forgotten that it was the self-destruction of the Fairfax media empire through Warwick Fairfax's ill-fated takeover which more than anything else has heightened the possibility of a dangerous

concentration of media ownership.

If the pre-1987 ownership of John Fairfax and Sons Ltd had continued then it could not now reasonably be alleged that there was an unacceptable concentration of print media ownership in Australia.

SYDNEY 27 October 1991