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Media ownership: Senator discusses the Fairfax receivership, increasing the levels of foreign ownership in the print media, and the implications of Kerry Packer gaining control

PAUL MURPHY: An influential member of Labor's Transport and Communications Committee, Senator Chris Schacht, says the Government is now prepared to countenance higher levels of foreign ownership in the print media. The dilemma of the Fairfax receivership and the surfeit of overseas equity among the bidders, makes it arguable that Canberra should allow a 20 per cent limit. Till now, the threshold has been set at 15 per cent, and the Senator says there's recognition of the need for a change from inside Cabinet. In a wide-ranging interview, Senator Schacht also says that Kerry Packer would have to sell off his magazine interests if he won control of Fairfax, but talk of a so-called game plan with Rupert Murdoch was fanciful. Andrew Sholl began by asking Chris Schacht about the strength of feeling in the party about the prospect of foreign interests buying into Fairfax.

CHRIS SCHACHT: Oh, I think there's a fair bit of feeling on this issue of foreign ownership, as there is when it was discussed about - in television ownership and so on, and I think, from what I can see in discussions in the appropriate Caucus committee, people believe about a 20 per cent limit is the appropriate maximum level of total foreign ownership that should be allowed for any bidder for the Fairfax press.

ANDREW SHOLL: And are signals coming from Cabinet, too, that that's likely?

CHRIS SCHACHT: I think the Cabinet has similar views. The Ministers involved in it seem to be saying the same sort of thing, so I don't think there's any great difficulty in getting a consensus in the Government about that view, that there should be about a maximum of 20 per cent.

ANDREW SHOLL: Despite the fact that there was so much strength of feeling, in the past, that anything over 15, for example, just wasn't on?

CHRIS SCHACHT: Well, I don't think people are going to die in a ditch between 15 and 20 per cent. I'm happy with 15, I'm not unhappy with 20. We have 20 per cent as the limit on foreign ownership in television stations and I think that it's quite a reasonable proposition to say if 20 per cent is okay for television, 20 per cent is okay for newspapers.

ANDREW SHOLL: Given the parlous state of Australian finance, at the moment, is foreign ownership avoidable?

CHRIS SCHACHT: I think it certainly is. I think it certainly is. I don't think people should be panicked into saying: the only way you can say Fairfax is a let - a majority of foreign ownership in, I think there are institutional investors in Australia and there are people involved in media and in the community who are more than willing to put money forward. The only interest, I think, the banks have in having foreign owners is that they believe they may be able to bid their price up so that banks can recover some of their losses, but I don't think the Government or the community should fall for that.

ANDREW SHOLL: A trend here seems to be, among the bidders, Australianising their bids. Jamison has AFP, a Monaco-based company - their Australian shareholders are going to hold direct interest; Dr O'Reilly's bid, now, has Ted Harris from Australian on the board and others. Will this wash?

CHRIS SCHACHT: Well, that in itself won't wash. If they believe they can still get away with having, say, more than 20 per cent foreign ownership, I think everyone would be happy to have, obviously, Australians on the board, but that should not be seen as a way of getting around, and won't be able to get round, say, a 20 per cent foreign ownership limit.

ANDREW SHOLL: Would a Packer bid for Fairfax wash?

CHRIS SCHACHT: Only if he totally divested his control of Channel Nine - then he could be a bidder. You cannot have both.

ANDREW SHOLL: What about the fact that if he does divest the televisions, but he has Fairfax and he has his magazines? He has an incredible dominance over the print market.

CHRIS SCHACHT: Well, then you would have to look at - and I think it would have to be looked at and it's something that would concern me considerably - is the question of dominance of the market, where he's got such a big hold already in magazines, coupled with having the second biggest daily network of newspapers in Australia. That would be a matter that I would think, quite clearly, the Trade Practices Commission would have to have a look at. I've already said, elsewhere, that I think there would be considerable concern in the community about Mr Packer taking over the Fairfax press because I don't believe he would run the Fairfax press in the same way as it's been run in the past decade, where the culture of the paper is considerably different, in which editors and journalists have a fair amount of discretion on variety of viewpoint, whereas I think Mr Packer, for good or for bad, is very much a hands-on proprietor in the media and I don't think that would be very good for the Fairfax press.

ANDREW SHOLL: But let's get back to the Trade Practices matter. Professor Baxt, the chairman of the Trade Practices Commission, says if Mr Packer does the right thing but he keeps the magazines, there are no Trade Practices concerns.

CHRIS SCHACHT: Well, I've heard Mr Baxt say that. I don't agree with that, per se - I think that ought to be investigated. There is, in my view, a concern about someone having a dominating control of most magazines in Australia, many magazines in Australia, and then also the controlling influence in the second-biggest daily newspaper.

ANDREW SHOLL: What, then, do you make of the supposed game plan between Mr Packer and Mr Murdoch?

CHRIS SCHACHT: Oh, I think if they are seriously contemplating it, they would know that even the most naive suburban lawyer would be able to give them legal advice that that will just hit the fence in the Trade Practices - under the Trade Practices Act. It would probably hit the fence under the the Broadcasting Act with Mr Packer owning Channel Nine. So though it's created a fair bit of scuttlebutt and gossip around the place, even if they are serious about it, it just won't wash in Australia. The laws of the land will not allow it to happen.

ANDREW SHOLL: So what, then, do you make of the O'Reilly bid's proposals to cut jobs, close papers, further rationalise, enter printing agreements with Rupert Murdoch?

CHRIS SCHACHT: Well, I haven't seen that actual document. I've heard of reports about it. Well, that's a matter that - they have to make that judgment and have to put it forward, and people have to assess its quality and calibre.

ANDREW SHOLL: Sure, but should papers close?

CHRIS SCHACHT: Well, I never favour any paper closing, but if people aren't buying it and it's running at a loss, well then, I don't think anyone should be expected to continue to keep a paper going.

ANDREW SHOLL: So are there competition problems, then, entering a printing agreement with Rupert Murdoch?

CHRIS SCHACHT: Well, I haven't been aware - I haven't seen the details of any so-called printing agreement with Rupert Murdoch, but it's quite clear that, around the world, rationalisation of printing arrangements is occurring and between various organisations, which doesn't affect the independence of their view within their own papers.

ANDREW SHOLL: On the face of it, though, you'd worry that it was anti-competitive?

CHRIS SCHACHT: It all depends what it does to the final outcome of the newspapers. I mean, if it meant that in the running of the two newspaper groups there was less competition, and whatever, well then, clearly, I'd be worried. If it just meant that they could reduce their costs in selling their - selling their newspaper, well then, I think that's a different argument. I don't want to prejudge that. All I say to it, if it was put as a proposal, it is clearly a legitimate thing for the Trade Practices Commission to investigate.

ANDREW SHOLL: Let's go back to the feeling in Caucus and the feeling in the Labor Party on Fairfax. Is there likely to be a media ownership debate at next week's annual conference?

CHRIS SCHACHT: I'd be absolutely surprised if there wasn't. I mean, every time I've been to a national conference for the last two decades, there's always been a debate on media. We wouldn't be the Labor Party if we didn't have a debate about media, media ownership, bias in the press and so on.

ANDREW SHOLL: Are there specific resolutions on Fairfax planned?

CHRIS SCHACHT: I don't know whether specifically on Fairfax, but I should imagine there will be a resolution from some delegate. If I'm not involved in one, I'd be surprised if someone else wasn't involved in drafting a resolution that dealt with issues of media ownership, media diversity in Australia.

PAUL MURPHY: Senator Chris Schacht.