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Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017



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ISSN 1328-8091

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BILLS DIGEST NO. 85, 2017-18 15 MARCH 2018

Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017 Dr Rhonda Jolly Social Policy Section

Contents

The Bills Digest at a glance ................................................... 3

Purpose ................................................................................. 3

Background ............................................................................ 3

Key issues .............................................................................. 3

Purpose of the Bill ............................................................... 4

Structure of the Bill ............................................................. 4

Background ......................................................................... 4

Committee consideration .................................................... 6

Senate Environment and Communications Legislation Committee ............................................................................... 6

Senate Scrutiny of Bills Committee ......................................... 6

Select Committee on the Future of Public Interest Journalism................................................................................ 6

Policy position of non-government parties/independents ..... 6

Australian Labor Party ............................................................. 6

Nick Xenophon Team (NXT) ..................................................... 7

Other........................................................................................ 8

Position of major interest groups ......................................... 8

Comments to public interest journalism inquiry ..................... 9

Box 1: civic and/or public interest journalism: two views ...................................................................................... 9

Canadian House of Commons report .................................... 11

Box 2: Canada Periodical Fund ............................................ 11

Submissions to the Senate Committee inquiry ..................... 11

Administration by ACMA ..................................................... 12

Date introduced: 6 December 2017

House: Senate

Portfolio: Communications and the Arts

Commencement: the day after Royal Assent

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at

March 2018.

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Eligibility criteria .................................................................. 12

Better use of funding issue .................................................. 13

Financial implications ........................................................ 13

Statement of Compatibility with Human Rights .................. 14

Parliamentary Joint Committee on Human Rights ................ 14

Key issues and provisions................................................... 14

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The Bills Digest at a glance Purpose The purpose of the Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017 (the Bill) is to establish a legislative framework for a grant funding scheme, the Regional and Small Publishers Innovation Fund, to be administered by the Australian Communications and Media Authority (ACMA).

Background In 2017 the Government agreed to certain compromises with crossbench Senators in order to achieve passage of media changes which removed certain broadcasting ownership and control rules.

This Bill has been introduced to fulfil the Government’s commitment to the Nick Xenophon Team to provide financial assistance to publishers and content providers.

Key issues Traditional media stakeholders generally support legislation that will assist them to cope with the changing media environment and this is the case with this Bill.

There have been three main issues raised in relation to the Bill. First, some consider the eligibility criteria are too limited as they do not include regional broadcasters, particularly Indigenous broadcasters, nor does the Bill take into account the financial circumstances of some smaller publishers which may have a foreign parent company.

The second criticism of the Bill is that its funding is short-lived and short sighted and that there is need for more comprehensive and long term solutions to be put in place to assist the media to adapt to the new media environment so that it can provide news content that meets the criteria for delivering civic journalism, which investigates public policy and explains issues with the aim of engaging citizens in public debate and enhancing democratic processes.

A third issue is whether the ACMA is the appropriate body to administer the fund set up under the Bill.

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Purpose of the Bill The purpose of the Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017 (the Bill) is to establish a legislative framework for a grant funding scheme, the Regional and Small Publishers Innovation Fund, to be administered by the Australian Communications and Media Authority (ACMA).

Structure of the Bill The Bill consists of one Schedule which proposes to amend the Broadcasting Services Act 1992 (the BSA) to insert a new Part 14F.

The new Part 14F will provide the legislative authority for the communications regulator, ACMA, to grant financial assistance to publishers of newspapers, magazines or other periodicals and to content services providers over a period of three years commencing 1 July 2018.1

Background In 2016, Communications Minister Mitch Fifield introduced reform proposals into the Parliament which the Minister argued were not only ‘the most significant reforms to media laws in a generation’, but also the means to support the viability of ‘local [media] organisations as they face increasing competition in a rapidly changing digital landscape’.2 Minister Fifield’s major changes were primarily intended to repeal the long-standing 75 per cent audience reach rule and a cross-media control rule, but they also included changes to licensing and anti-siphoning rules.3

There was general support for abandoning the audience reach rule, but achieving repeal of the cross media control rule—the two out of three rule—in the Parliament proved challenging for the Turnbull Government. Nonetheless, after weeks of negotiations between the Government and the minor parties, particularly the crossbench Senators from One Nation and the Nick Xenophon Team (NXT), a number of compromises were reached to allow for the Government’s reform package to be passed by both Houses by 16 October 2017.4

One of the compromises resulting from the Government negotiations stemmed from a package of measures presented to the Government by the NXT in July 2017. The NXT package reportedly included a number of proposals, to which the Government appeared in principle to agree—an Australian Competition and Consumer Commission inquiry into the impact of Facebook and Google on media; a further extension for community television licensees and a roundtable discussion on the sector’s future; a review into the reach of Australian broadcasting services in the Asia-Pacific and enhancing local content in smaller regional markets through the points system.5 However, it rejected a proposal for delivering tax breaks for smaller and regional publications;6 Minister Fifield declaring that tax subsidies which benefitted foreign multinational media organisations, such as Guardian Australia, should not be introduced.7 In addition, the Minister also raised concerns over ‘Government intervention’ in commercial media, which he believed could ‘only be contemplated when the implications for freedom of speech and freedom of the press are fully understood’.8

1. Content Service is defined in Schedule 7 of the BSA as a service that delivers content to persons having equipment appropriate for receiving that content, where the delivery of the service is by means of a carriage service or a service that allows end-users to access content using a carriage service. Carriage Service is defined in the Telecommunications Act 1997 as a service for carrying communications by means of guided and/or unguided electromagnetic energy. Carriage services include internet, social media, phone et cetera.

2. M Fifield (Minister for Communications and the Arts), Modernising Australian media laws, media release, 1 March 2016. 3. More detail on media regulation is presented in R Jolly, Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017, Bills digest, 8, 2017-18, Parliamentary Library, Canberra, 2017. The rules to be replaced were the 75 per cent rule (audience reach rule) which was that a person, either in his or her own right or as a director of one or more companies, must not be in a position to exercise control of commercial

television broadcasting licences which have a combined licence area population that exceeds 75 per cent of the population of Australia. The two out of three rule (cross-media ownership rule) was that a person can only control two of the regulated media platforms (commercial television, commercial radio and associated newspapers) in a commercial radio licence area. 4. Parliament of Australia, ‘Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 homepage’, Australian Parliament website. 5. R Lewis, ‘Media reform stalemate over Xenophon tax break plan’, The Australian (Business Review online edition), 17 August 2017. 6. Ibid.

7. M Fifield (Minister for Communications and the Arts), Turnbull Government working with Senate crossbench to secure passage of vital media reforms, media release, 17 August 2017. 8. Lewis, ‘Media reform’, op. cit.

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In response, Senator Xenophon believed that the Government’s concerns over tax breaks could be ‘worked through’.9 While it took some weeks, the idea of tax breaks was abandoned on 14 September 2017 when Senator Xenophon announced that the NXT had reached agreement with the Government on a package which would ‘assist smaller publishers and foster diversity’.10 On 18 September 2017, the Government confirmed that it had agreed to introduce measures to assist regional and small publishers. These measures were to deliver:

• a Regional and Small Publishers Innovation Fund (funding of $50.1 million)

• a cadetship program to support 200 cadetships ($8.0 million) and

• 60 regional journalism scholarships ($2.4 million over three years).11

The Government anticipated that the Regional and Small Publishers Innovation Fund would be able to:

… allocate grants to programs and initiatives such as the purchasing or upgrading of equipment and software, training, development of apps and business activities to drive revenue and readership, all of which would help small publishers to expand their businesses and create more jobs. 12

In October 2017, the Department of Communications and the Arts (the Department) published a factsheet on the Regional and Small Publishers Innovation Fund. It stated:

Grants will be made via a competitive application process for initiatives that will support the availability of Australian civic journalism. The types of projects that may receive funding includes purchasing or upgrading equipment and software, development of apps, business activities to drive revenue and readership, and training. However, payment of salaries will not be permitted under the Fund.

To be able to apply for a grant under the Fund, applicants will need to meet eligibility criteria. One requirement will be meeting annual turnover thresholds of not less than $300,000 revenue and not more than $30 million in revenue. Additional criteria will include:

• a primary purpose test (of producing civic and public interest journalism with an Australian perspective)

• an Australian residence test (being incorporated under Australian law and having central management in Australia)

• an independence test (not affiliated with a political party, union, superannuation fund, financial institution, non-government organisation or policy lobby group)

• a control test (being an entity that is majority controlled by Australian residents)

• being a member of the Australian Press Council or having a robust and transparent complaints process, and

• having in place editorial guidelines, a code of conduct or similar framework relating to the provision of quality journalism.

Grants will be capped at a maximum of $1 million per year for any media group, and at least two thirds of total funding must go to regional publishers and not less than 25 per cent for non-regional publishers. 13

9. Ibid.

10. N Xenophon, Media reform measures negotiated by NXT, media release, 14 September 2017. It was reported in the media that a Government assessment of a tax offset scheme ‘found it would deliver little in the way of benefits to publishers - perhaps as little as $2 million a year in total to the industry’. A Tillett and M Mason, ‘How media reform finally got done’, The Australian Financial Review, 23 September 2017, p. 25.

11. A Sinodinos and M Fifield (Minister for Communications), New measures to support regional media organisations, media release, 18 September 2017. 12. Ibid.

13. Department of Communications and the Arts (DCA), Regional and Small Publishers Innovation Fund, fact sheet, DCA, October 2017, p. 2.

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Committee consideration Senate Environment and Communications Legislation Committee On 7 December 2017, the Senate Selection of Bills Committee recommended the Bill be referred to the Senate Environment and Communications Legislation Committee but could not reach agreement on a reporting date.14 The Senate accepted the recommendation with a reporting date of 12 February 2018.15

The Senate Environment and Communications Legislation Committee published nine submissions and held a public hearing for the inquiry on 1 February 2018. The Committee reported on 12 February 2018, with the majority of the Committee recommending that the Bill be passed.16 Australian Labor Party (Labor/ALP) made additional comments and the Australian Greens issued a dissenting report, calling for the ‘control test’ to be removed from the Bill. These positions are discussed further below.

Senate Scrutiny of Bills Committee The Senate Scrutiny of Bills Committee considered the Bill and noted that ‘none of the substantive requirements and criteria for eligibility [for grants of financial assistance] are set out in statute’.17 It stated:

It therefore appears that neither the criteria for the award of a grant nor the purposes or conditions for which grants may be awarded are included in the bill. Instead, these matters are to be determined by non-statutory policy or included in individual agreements. The practical effect of this approach is to delegate general criteria and conditions for the award of a grant to ACMA. It is also noted that if general non-statutory rules are not developed, then the legislation confers on ACMA an extremely broad discretionary power to allocate a substantial sum of money.

18

The Scrutiny of Bills Committee sought the Minister’s advice as to ‘why the criteria for the award of the grants and the standard terms and conditions to be imposed are not included in the bill or subject to any other appropriate level of parliamentary scrutiny’.19

At the time of writing this Digest, the Minister’s response had not been published.20

Select Committee on the Future of Public Interest Journalism On 10 May 2017, the Senate established a Select Committee on the Future of Public Interest Journalism.21 The Committee tabled its report on 5 February 2018. The Committee noted the Bill was ‘under consideration by another Senate committee’ and stated it would ‘not be making any substantive comment in this report’.22 However, while the Committee did not directly consider the Bill, the inquiry included discussion regarding models of support for public interest journalism (see below).

Policy position of non-government parties/independents Australian Labor Party Labor was opposed to the removal of the two out of three cross media control rule. Labor’s spokesperson in the 2017 media reform debate, Shadow Minister for Communications, Michelle Rowland, stated that the ALP’s position had been ‘crystal clear’ for some time and that in taking its stance Labor was defending the public

14. Senate Selection of Bills Committee, Report, 15, 2017, The Senate, 7 December 2017. 15. Australia, Senate, Journals, 79, 2016-17, 7 December 2017, p. 2514. Senator Rachel Siewert unsuccessfully moved to amend the reporting date of the inquiry to 19 March 2018. 16. Senate Environment and Communications Legislation Committee, Communications Legislation Amendment (Regional and Small Publishers

Innovation Fund) Bill 2017, The Senate, Canberra, 12 February 2018, p. 19. 17. Senate Standing Committee for Scrutiny of Bills, Scrutiny digest, 1, 2018, The Senate, 7 February 2018, p. 14. 18. Ibid., p. 15. 19. Ibid.

20. The Minister’s response was received by the Committee on 21 February 2018. See Senate Standing Committee for Scrutiny of Bills, Ministerial responses, The Senate, Canberra. 21. Australia, Senate, Journals, 40, 11 May 2017, p. 1330-32. 22. Senate Select Committee on the Future of Public Interest Journalism, Report, The Senate, Canberra, February 2018, p. 19.

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interest in opposing further concentration of the media which it believed would result from removal of the rule.23

Labor was not convinced that any of the compromises reached between the Government and crossbench parliamentarians would effectively alleviate the damage it saw resulting from removal of the two out of three rule. With regards to the compromises made by the NXT, during debates on the 2017 media reform legislation Labor Senators criticised Senator Xenophon for making a deal that ‘would sell out Australian media diversity’ in return for what they argued was minimal funding for regional media.24 Labor’s Senator Don Farrell claimed that if the $50 million Fund was ‘split evenly across the states and territories’ it would amount to approximately $2.0 million a year. According to Senator Farrell, when that funding was again shared amongst the media of each state ‘frankly … it's not very much money’.25

Senator Sam Dastyari described the proposed fund as a ‘farce’ and part of a ‘dirty deal’ done to secure the passage of legislation.26 He characterised the fund as:

… a $60 million slush fund that we find out is to buy iPads. It's to buy iPhones. Everyone's going to get a new iPhone X under this proposal! This is the slushiest fund imaginable. This isn't about the future of journalism. This is about a government throwing money at a problem to try to get the passage of legislation. 27

While not dissenting from the Senate Environment and Communications Legislation Committee’s recommendation that the Bill be passed, Labor Senators on that Committee criticised the Government’s approach to the media and public interest journalism, in particular the removal of the two out of three rule. They stated:

Labor Senators regard the Regional and Small Publishers Innovation Fund to be a short-term Band-Aid solution that does nothing to fill the void left by the repeal of the 2 out of 3 rule and is too little, too late for many media organisations. 28

Nick Xenophon Team (NXT) Extensive negotiations took place between the Government and crossbench Senators in order to pass the 2017 media changes. In return for its support for the package, the NXT presented the Government with a number of proposals which it considered would counter the removal of the two out of three cross media ownership rule. These included a tax offset scheme (see more discussion in the section on major interest groups later in this digest) and government funding for journalist salaries. These measures were rejected by the Government.29

The proposal in this Bill is based on measures in the NXT package, but it does not exactly match the NXT’s expectations as announced in a September 2017 press release, which coincided with media reform discussion in the Senate.30

The NXT press release contained more detailed criteria for recipients for grants of funding assistance and these are reflected in the Explanatory Memorandum rather than the Bill. These included:

To be eligible to apply for grants, entities would need to meet eligibility criteria. The criteria include:

- a primary purpose test (of producing civic and public interest journalism with an Australian perspective);

23. M Rowland, ‘Second reading speech: Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017’, House of Representatives, Debates, 20 June 2017, p. 7097. 24. P Wong, D Farrell, A Gallacher (Senators for South Australia), Xenophon must protect SA media diversity and jobs, media release, 13 September 2017. 25. D Farrell, ‘Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017: Commercial Broadcasting (Tax) Bill 2017: In Committee’,

Senate, Debates, 14 September 2017, p. 7361. 26. S Dastyari, ‘Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017, Commercial Broadcasting (Tax) Bill 2017: In Committee’, Senate, Debates, 14 September 2017, p. 7371. 27. Ibid.

28. Senate Environment and Communications Legislation Committee, Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, op. cit., p. 22. 29. Lewis, ‘Media reform’, op. cit. 30. Xenophon, Media reform measures negotiated by NXT, op. cit.

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- an Australian residence test (being incorporated under Australian law and having their central management and control in Australia);

- an independence test (not affiliated with a political party, union, superannuation fund, financial institution, non-government organisation or policy lobby group);

- control test (not controlled by an entity that is not majority owned by Australian residents);

- being a member of the Australian Press Council or having a robust and transparent complaints process; and

- having in place editorial guidelines, a code of conduct or similar framework relating to the provision of quality journalism.

Publishers with an annual turnover of not less than $300,000 in revenue and not more than $30 million in revenue would be eligible. Large publishers (such as News Corp and Fairfax) are ineligible. Public broadcasters are ineligible.

Funding grants would be capped at a maximum of $1 million per year for any media group. 31

Additional conditions included an independent review of the fund after 12 months of operation, with the review conclusions to be made public, and a condition for allocation of funding whereby least two-thirds would be awarded to regional publishers and not less than 25 per cent to non-regional recipients.32

Senator Xenophon stated in Parliament that the deal announced in the NXT media release was the best he was able to reach with the Government.33 The NXT has released no comment in relation to the Bill, but from a comparison with the September 2017 media release, it appears that the provisions of the Bill do not wholly set out what was agreed. For example, a review of the program is not mandated in the provisions of the Bill, however the Department has confirmed that a review of the program is intended to be undertaken after the first round of funding.34

Australian Greens The Australian Greens issued a dissenting report on the Senate Environment and Communications Legislation Committee’s inquiry into the Bill, which ‘strongly recommended’ that the proposed eligibility criterion requiring an entity to be majority controlled by Australian residents be removed as it:

creates unnecessary and ideologically driven carve-outs and exceptions that do nothing but limit eligibility to the grant scheme to those the Government believes are ideologically 'friendly'. This defies the intent of the Bill, and makes clear why civic journalism is so necessary. 35

Other There appear to be no specific comments made by other parliamentarians on the measures in this Bill.

Position of major interest groups The traditional media organisations have consistently argued that their viability is under threat in the changing media environment, so it is unlikely that any publisher would criticise the principle of providing government support to assist the industry, albeit in the case of this fund, that there are limitations on which publishers are able to access that funding.36 However, as is discussed in the sections below, the issues surrounding who is able to access the financial assistance provided through the Regional and Small Publishers Innovation Fund, the amount of funding available and the limited timeframe for which it is available have attracted comment.

31. Ibid. Explanatory Memorandum, Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, p. 7. 32. Xenophon, Media reform measures negotiated by NXT, op. cit. 33. N Xenophon, ‘Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017: Commercial Broadcasting (Tax) Bill 2017: In Committee’, Senate, Debates, 14 September 2017, p. 7356.

34. J Penprase (Department of Communications and the Arts), Evidence to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 1 February 2018, p. 3. 35. Senate Environment and Communications Legislation Committee, Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, op. cit., p. 24. 36. For example comments in favour of media changes are included in the Library’s Bills digest for the 2017 media changes, R Jolly, Broadcasting

Legislation Amendment (Broadcasting Reform) Bill 2017, Bills digest, 8, Parliamentary Library, Canberra, 2017-18.

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In addition, some stakeholders have suggested the three year time period in which funding can be awarded delivers only limited value in achieving what appears to be a fundamental aim of this Bill as stated in the Explanatory Memorandum — to ‘support the continuation, development, growth and innovation’ of civic or public interest journalism.37

Comments to public interest journalism inquiry A Senate Select Committee inquiry into the Future of Public Interest Journalism considered a number of issues which are relevant to the Bill. The Explanatory Memorandum to the Bill states the proposed innovation fund grants of financial assistance ‘will be able to be used by publishers for initiatives that support the continuation, development, growth and innovation of Australian civic journalism, including initiatives that explore and expand the journalism funding model’. It defines the primary purpose of civic journalism as ‘investigating and explaining public policy and issues of public interest or significance with the aim of engaging citizens in public debate and informing democratic decision making’.38

The terms of reference for the Senate Select Committee inquiry included that it inquired into the state of public interest journalism (see comment on what constitutes public interest journalism in Box 1 below) in Australia and the role of government in ensuring a viable, independent and diverse media service.39

Box 1: civic and/or public interest journalism: two views

• The Conversation Media Group remarked in its submission to the Inquiry into Public Interest Journalism:

Public interest journalism can provide essential context to help people make sense of a complex and confusing barrage of information.

Any working definition of public interest journalism should reflect:

1) A systemic publishing activity in institutional framework in which public good or serving the public is a stated priority.

2) An organisation that is committed to factual accuracy, backed up by documented processes to ensure truth, accuracy, fact checking and reliability.

3) A code of ethics and public commitment to accuracy.

4) Systems of accountability and accreditation for contributors and journalists.

5) Policies and procedures around correction of misinformation.

6) Systems to ensure transparency of any conflicts of interest or vested interests.

7) Systems for audience feedback. 40

• The Ethical Journalism Network states:

‘Just because the public is interested in something has nothing to do with whether it is in the public interest.

The public interest is in having a safe, healthy and fully-functioning society. In a democracy, journalism plays a central role in that. It gives people the information they need to take part in the democratic process. That is why there is a public service ethic at the heart all of serious journalism.

If journalists are good at their job, and to win the trust of the public they must hold governments and other institutions to account and they must act and behave ethically’. 41

A range of proposals were made to support public interest journalism in Australia. For example, Professor Rodney Tiffin argued that it is important that journalism is subsidised in a politically independent and

37. Explanatory Memorandum, Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, p. 2. 38. Ibid.

39. Select Committee on the Future of Public Interest Journalism, ‘Terms of reference’. 40. The Conversation, Submission to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, [Submission no. 68], August 2017, pp. 3-4. 41. Ethical Journalism Network, ‘Is it in the public’s interest?’, Ethical Journalism Network website.

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commercially neutral way.42 This fund goes some way towards such an end. However, some have suggested that there is the potential for the Government to influence the award of funding, given for example, that the Minister has the final say on the composition of an advisory committee. Professor Tiffin suggested that the Government should look at funding an agency which wholesales pedestrian and routine news, the labour intensive and commercially unrewarding tasks of news gathering; thus giving outlets capacity to fund investigative reporting. Funding such an agency would most likely be significantly more expensive than the measures in this Bill, however, and it would be an ongoing public expense.

Other suggestions made to the Public Interest Journalism Committee which may be less of a cost burden to government, and which could be considered once the funding for the measure in this Bill ceases, include extending tax deductible gift recipient status to organisations which contribute to civic journalism. Currently, this status applies to a variety of organisations such as libraries, museums and health promotion charities.43 In his submission to the Public Interest Journalism Committee Dr Chris Berg believed, however, that the risk in this approach is that it ‘might encourage future parliaments to interfere with the free press, raising freedom of speech concerns’.44

The Independent Australia submission to the inquiry also raised the issue of ongoing subsidies for public interest journalism arguing that ‘the best means to encourage a diversity of voices would be to add a not for profit public interest journalism deductible gift recipient (DGR) category into Australia’s Income Tax Assessment Act’.45 Currently, there are approximately 50 DGR endorsement categories and two types of deductible gift recipients, those endorsed by the Australian Tax Office and those listed by name in law. Eligibility for DGR is based on an organisation's purpose or the purpose of a fund, authority or institution which it operates.46

Further suggestions made to the Public Interest Journalism Committee would supplement the measure in this Bill and provide ongoing support once the funding in the measure is expended. Country Press Australia, for example, noted that a means to aid journalism in regional Australia would simple involve the continued placing of Government advertising and messages through the print and online editions of regional and community media.47

Academics from Deakin University suggested that additional policy interventions could be adopted to assist emerging sources of community news by maximising existing operations, offering seed funding for new initiatives and creating partnerships with public broadcasters and local operators who demonstrate their media provides civic benefits.48 The Deakin academics argued that community media and hyperlocal news sites have the potential to fill the gaps created by the decline of traditional media.49 In addition, they observed that publicly funded broadcasters already provide an important source of public interest journalism which is less attractive to privately owned media now faced with increasing commercial pressures. However, as the Special Broadcasting Service (SBS) submission to the Senate inquiry into this Bill also pointed out, publicly owned media are not only ineligible for funding under this measure, their capacity to provide public interest journalism has declined as the result of government funding cuts in recent years.50

42. R Tiffin, Submission to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, [Submission no. 12], 14 June 2017. 43. C Berg, Submission to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, [Submission no. 16], June 2017, p. 4. 44. Ibid.

45. Independent Australia, Submission to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, [Submission no. 55], June 2017, p. 5. 46. See the Australian Tax Office website for more detail on deductible gift recipient categories. 47. Country Press Australia, Submission to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public

Interest Journalism, [Submission no. 15], June 2017. 48. Deakin University, Submission to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, [Submission no. 19], 15 June 2017, p. 6. 49. Hyperlocal journalism, sometimes called microlocal journalism, refers to coverage of events and topics on an extremely small, local scale.

Hyperlocal journalism focuses on news that would usually not be covered by larger mainstream media outlets, which tend to follow stories of interest to metropolitan, state or regional audiences. For more comment see D Harte, ‘As traditional media falters, hyperlocal news is on the up’, The Conversation, 15 August 2015. 50. Special Broadcasting Service (SBS), Submission to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, [Submission no. 62], January 2018.

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Comments made to the public sessions held by the Public Interest Journalism inquiry also noted the need for long-term public funding to support a wider array of public interest journalism sources. Michael Taylor, Managing Editor of the Australian Independent Media Network, argued:

Unless public funding is available to support genuine public interest journalism in regional areas and linguistically diverse communities, what little there is might wither on the vine. The fact that some smaller local foreign language papers survive because locals buy them regularly is testimony for the desire of such journalism. Some public funding would make survival easier. I think government should subsidise community radio and credible journalism sites in order to provide a voice to the people and help promote an interest in politics and the community. Too many people have no interest, because they feel they have no say.

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As Associate Professor Andrew Dodd of the Public Interest Journalism Foundation noted, there is in fact a need for a ‘suite of solutions’ to the assist print and broadcasting media to compete in what has become a rapidly changing media environment.52

Canadian House of Commons report A report of the Canadian House of Commons Standing Committee on Canadian Heritage (the Fry Committee report), published in June 2017, addressed Professor Dodd’s point.53 Canada already has a fund which provides assistance to publishers — the Canada Periodical Fund (CPF), but the Fry Committee recommended the expansion of this fund to encompass more options to assist publishers to cope with their changed circumstances (see Box 2 below for summary of the funding under the CPF). Some of the Committee’s recommendations were to make more publications eligible for funding, provide more support to assist in online distribution and offer more assistance to Indigenous and ethnic print media.54

Box 2: Canada Periodical Fund

The Canada Periodical Fund consists of three components:

• Aid to Publishers which provides funding to support content creation, production, distribution, online activities or business development.

• Business Innovation which encourages innovation to adapt to changing market conditions and contributes to the diversity of content.

• Collective Initiatives which supports broad-based marketing plans, research into new technologies and projects that tackle systemic issues affecting the industry.

Only publishers producing printed paid or request circulation magazines and paid circulation non-daily newspapers are eligible. Non-Indigenous publications must have sold at least 3,500 paid copies during a financial year, while the sales threshold for Aboriginal, official language minority and ethnic magazines and non-daily newspapers is 2,000.55

Other recommendations of the Fry Committee included introducing a five-year temporary tax credit ‘to compensate print media companies for a portion of their capital and labour investments in digital media’ and that the Canadian Government changed the definition of a registered charity in the Canadian Income Tax Act to include not-for-profit media or foundations.56

Submissions to the Senate Committee inquiry Submissions to Senate Environment and Communications Committee inquiry into this Bill were supportive of the Government’s proposal to fund small and regional publishers. The majority of concerns raised regarding the Bill

51. M Taylor (Managing Editor, Australian Independent Media Network), Evidence to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, 22 November 2017, p. 10. 52. A Dodd (Public Interest Journalism Foundation), Evidence to Senate Select Committee on the Future of Public Interest Journalism, Inquiry into the Future of Public Interest Journalism, 21 August 2017, p. 11. 53. Canada, House of Commons, Standing Committee on Canadian Heritage, Disruption: change and churning in Canada’s media landscape (Fry

Report), House of Commons, Ottawa, June 2017. 54. Ibid., p. 40. 55. Ibid., pp. 38-9. 56. Ibid., Recommendation 5, p. 35 and Recommendation 16, p. 65.

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relate to administration by ACMA, issues related to eligibility and whether the fund as proposed represents the best use of assistance funding.

Administration by ACMA Some submitters to the inquiry questioned if ACMA was the appropriate body to administer a fund which is to assist publishers of newspapers, magazines and other periodicals. The Indigenous Remote Communications Association (IRCA), for example, argued that ACMA ‘has no current capacity for administering a grants program’; it further questions ‘the cost effectiveness, and risk of mixed purpose, in establishing a grants program in ACMA without the history of grants administration’.57 The IRCA suggested that the Department of Communications and the Arts should be the body to administer the fund.58

At the public hearing for the inquiry, Dr Carolyn Patteson, from the Department responded to this issue:

One of the key objectives is to ensure that [the fund] is administered at arm's length from the government to avoid any perception, real or otherwise, of interference of any type with the administration of the fund, and the ACMA fulfils this criterion. It's a statutory body with broad independence from government. Although to date it hasn't implemented grant programs on behalf of the Commonwealth, obviously the ACMA has extensive experience in and knowledge of the media industry.

59

Eligibility criteria The IRCA submission to the Senate inquiry objected to the exclusion of Indigenous licensed community broadcasters from eligibility for funding from the Small and Regional Publishers Innovation Fund.60 The IRCA argued that Aboriginal and Torres Strait Islander audiences are more likely to receive their news and information from broadcasting services than print or online sources (see table below).61

For this reason the IRCA called for the eligibility criteria for funding to be extended to Indigenous broadcasters because of their unique role in the provision and interpretation of news and current affairs to Indigenous people and for a minimum of ten per cent of funding to be provided under this Bill to be allocated to the various Indigenous media. In addition, the IRCA considered that there should be a requirement under the Bill for the representation of minority and culturally and linguistically diverse communities on the fund’s advisory committee.

Table 1: news sources in remote communities

1 Local Indigenous community radio news 61%

2 NITV News 58%

3 ABC TV news 52%

4 CAAMA News 51%

5 Newspapers 23%

6 Online news service 1%

Source: Indigenous Remote Communications Association (IRCA).62

The Guardian Australia also considered that the criteria for assistance under the fund are too narrow as they exclude that publication. The Guardian’s submission to the Senate inquiry argued that, despite its having a foreign parent company, its business in Australia depends on maintaining ‘a viable Australian revenue model’ and that its profits are ‘reinvested in Australian journalism’.63 The Guardian found it inconsistent that this

57. Indigenous Remote Communications Association (IRCA), Submission to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, January 2018, p. 11. 58. Ibid.

59. C Patteson (Department of Communications and the Arts), Evidence to the Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 1 February 2018, p. 3. 60. IRCA, Submission, op. cit., p. 10. 61. Ibid., pp. 9-10. 62. Ibid., p. 9. 63. Guardian Australia, Submission to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation

Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, n.d.

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restriction applies in the case of the regional and small publisher fund, but it appears that it is not to apply in the case of funding to be provided to help regional news organisations employ journalism cadets.64

The Guardian argues that, for this reason, the current form of the legislation, therefore, disadvantages ‘a new, fast growing source of Australian news and of jobs for Australian journalists, when the whole purpose of the fund is to encourage both those things’.65 At the public hearing James Penprase, from the Department, commented on the policy reason for this differentiation:

The innovation fund is designed to help small and regional publishers transition, so it is a business oriented fund. The government's decision was to target that fund towards Australian owned and Australian controlled entities. While there will be benefits for industry, I think it's fair to say the primary benefit will be for cadets, for young journalists trying to get into the industry. Because the bulk of those benefits go to an individual level, restricting them on the basis of ownership of the business, there's probably not a pertinent eligibility criterion for that, hence the difference between the fund and the cadetship program.

66

Schwartz Media’s submission to the Senate inquiry noted that important questions regarding accountability are not answered in the legislation; they will be addressed in the guidelines to be issued by ACMA.67 Regarding eligibility criteria, Schwartz Media asks what is meant by the ‘robust and transparent complaints process’ that publishers will be required to have in place in order to access funding. Similarly, what is meant by the requirement to have in place ‘editorial guidelines’ and ‘a code of conduct or similar framework relating to the provision of quality journalism’?68 While Schwarz Media asked other questions which are more related to process, the two questions noted appear to raise again the issue of whether ACMA is the appropriate body to administer the Regional and Small Publishers Innovation Fund.

Better use of funding issue Country Press Australia (CPA) questioned whether the money allocated to the fund this Bill proposes to establish could ‘be more wisely spent, with better long-term outcomes for business and for jobs, and therefore a better result for Federally-allocated finances’.69 CPA believed that funds ‘would be better spent supporting long-term employment, making it possible to support local young adults from school into permanent employment’ and this could be achieved through taxation rebate or wages support.70

In discussing the Government’s three proposals to assist regional and small publishers (as noted in the Background section of this Digest) the Media, Entertainment and Arts Alliance (MEAA) noted that while it is supportive of the Government’s general approach it is concerned these short term programs need to be followed up, otherwise they may only ‘temporarily boost the numbers and scope of journalists and journalism’.71 The MEAA believed unless consideration is given ‘to sustaining these programs during their rollout’, their ‘benefits will be largely exhausted shortly after the 2020-21 financial year’.72

Financial implications Grant funding will be up to $50.1 million over a three-year period commencing 1 July 2018.73 ACMA will appropriate departmental expenses from the funding to administer the program and the funding to remunerate members of the advisory committee (should the Minister choose to appoint such a committee) will also come

64. Ibid.

65. Ibid., p. 3. 66. J Penprase (Department of Communications and the Arts), Evidence to the Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 1 February 2018, p. 2. 67. Schwartz Media, Submission to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation

Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 2018. 68. Ibid.

69. Country Press Australia (CPA), Submission to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 10 January 2018, p. 1. 70. Ibid., p. 3. 71. Media Entertainment and Arts Alliance (MEAA), Guardian Australia, Submission to Senate Environment and Communications Legislation

Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 2018, p. 7. 72. Ibid.

73. Explanatory Memorandum, op. cit., p. 2.

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from the $50.1 million.74 Remuneration for the advisory committee will be determined by the Remuneration Tribunal but, if no remuneration is determined by the Tribunal, the Minister can determine in writing what remuneration committee members receive (proposed section 205ZK).

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.75

The Explanatory Memorandum notes that the Bill ‘engages the right to freedom of expression’ in Article 19 of the International Covenant on Civil and Political Rights (ICCPR) as it provides incentives ‘that support the continuation, development, growth and innovation of Australian civic journalism’.76 In so doing it supports ‘the freedom to seek, receive and impart information and ideas of all kinds using any media of choice’.77

In terms of the human rights of Indigenous people, in its submission to the Senate inquiry into this Bill the IRCA disagrees that this Bill is fully compatible.78 The IRCA draws attention to Article 27 of the ICCPR which states:

In those States in which ethnic, religious or linguistic minorities exist, persons belonging to such minorities shall not be denied the right, in community with the other members of their group, to enjoy their own culture, to profess and practise their own religion, or to use their own language. 79

The IRCA argues that because this Bill intends only to fund publishers it is remiss in terms of Article 27 because Indigenous people access a number of sources for news and cultural information and the Bill does not take into account this reality. It cites the 2016 Remote Indigenous Communities Media and Communications Survey to justify its case (see table 1 above).80

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights considered the Bill did not raise human rights concerns.81

Key issues and provisions Proposed section 205ZG sets out a simplified outline of the new Part 14F of the BSA. This covers ACMA’s authority to administer grants, the time periods when grants must be made and the capacity of the Minister to constitute an advisory committee to advise ACMA.

Proposed section 205ZH is the key provision of the Bill. It provides that ACMA, on behalf of the Commonwealth, may grant financial assistance to a constitutional corporation82 that publishes a newspaper,83 magazine or other periodical; or a content service provider.84

74. J Penprase (Department of Communications and the Arts), Evidence to the Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 1 February 2018, p. 7. 75. The Statement of Compatibility with Human Rights can be found at pages 3 and 4 of the Explanatory Memorandum to the Bill. 76. Explanatory Memorandum, op. cit., p. 3. 77. Ibid.

78. IRCA, Submission, op. cit. 79. International Covenant on Civil and Political Rights, done in New York on 16 December 1966, [1980] ATS 23 (entered into force for Australia (except Art. 41) on 13 November 1980; Art. 41 came into force for Australia on 28 January 1994). 80. IRCA, submission, op. cit. 81. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 1, 2018, 6 February 2018, p. 78. 82. Section 5 of the BSA provides a ‘constitutional corporation’ means a corporation to which paragraph 51(xx) of the Constitution applies. This

applies to ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’. Proposed subsection 205ZH(2) also provides that grants of financial assistance must not be made to a person unless the person is a party to an agreement under proposed subsection 205ZJ(2). 83. Section 5 of the BSA provides ‘newspaper’ means ‘a newspaper that is in the English language and is published on at least 4 days in each week, but does not include a publication if less than 50% of its circulation is by way of sale’. 84. Proposed section 205ZH notes that ‘content service provider’ is within the meaning of Schedule 7 of the BSA. This defines ‘content service provider’ as ‘a person who provides a content service’. The definition of content service in Schedule 7 includes ‘(a) a service that delivers content to persons having equipment appropriate for receiving that content, where the delivery of the service is by means of a carriage service; or (b) a service that allows end-users to access content using a carriage service’ and excludes a number of services such as broadcasting services.

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These grants must be in respect of financial years commencing 1 July 2018, 1 July 2019 or 1 July 2020 and the total amount of the grants ‘must not exceed $50,100,000’.85

The Explanatory Memorandum notes that the ‘Government has announced that applicants for grants are to meet a number of eligibility criteria’ which it expects will be ‘reflected in the Grant Guidelines to be issued by the ACMA, and that … ACMA will apply these criteria in assessing applications for funding received under the grant scheme’.86 It states:

One requirement will be meeting annual turnover thresholds of not less than $300,000 and not more than $30 million. Additional criteria include:

- a primary purpose test (of producing civic and public interest journalism with an Australian perspective);

- an Australian residence test (being incorporated under Australian law and having central management in Australia);

- an independence test (not affiliated with a political party, union, superannuation fund, financial institution, non-government organisation or policy lobby group);

- a control test (being an entity that is majority controlled by Australian residents);

- being a member of the Australian Press Council or having a robust and transparent complaints process; and

- having in place editorial guidelines, a code of conduct or similar framework relating to the provision of quality journalism.

… It is the intention that grants will be capped at a maximum of $1 million per year for any media group. 87

Proposed section 205ZJ provides that terms and conditions relating to grants are to be set out in a written agreement between ACMA and the grant recipient. The Bill does not require that funding is to be based on an organisation’s commitment to civic or public interest journalism. Instead, the Explanatory Memorandum states that it is intended that the terms and conditions of an agreement are broad. The Explanatory Memorandum does not appear to explain why this is so, particularly given that it stresses that grants will be able to be used for ‘the continuation, development, growth and innovation of Australian civic journalism’.88 The ‘core condition’ of an agreement is that funds are spent on matters that concern a recipient’s activities as a publisher or content service provider.89 It appears that ACMA will be given considerable leeway to decide the purposes for which funding will be allocated.

The Explanatory Memorandum lists the following ‘terms and conditions’ which may require funding be:

- used to purchase a particular piece of technology or equipment; or

- directed into a program or an initiative that is intended to promote civic journalism; or

- used to develop an application for the delivery of news, and other media related content services; or

- spent on training and upskilling of staff; or

- directed to increasing revenue and readership. 90

Proposed section 205ZK provides that the Minister may set up a committee to advise ACMA and that ACMA must ‘have regard to’ relevant advice given by that committee. This section raises a number of issues. First, it is not a requirement of the legislation that an advisory committee is set up; this is subject to the Minister’s discretion and if a committee is set up its members will be ‘invited’ to participate by the Minister.91 Second,

85. Proposed subsection 205ZH(4) provides that payments are to be made out of money appropriated by another Act. The Explanatory Memorandum notes that this ‘will usually be an Annual Appropriation Act’ and this is ‘common practice for bills that may have major financial implications and are introduced in the Senate’ (p. 7).

86. Explanatory Memorandum, op. cit., p. 7. 87. Ibid.

88. Explanatory Memorandum, op. cit., p. 2. 89. Proposed subsections 205ZJ(4) to (6). 90. Ibid., p. 8.

91. M Fifield, ‘Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017: Commercial Broadcasting (Tax) Bill 2017: In Committee’, Senate, Debates, 14 September 2017, p. 7354.

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ACMA does not need to accept the advice of the committee. Third, while the Minister is on record saying that a committee will consist of ‘appropriate industry representatives’, there is nothing in the legislation which refers to the composition of the committee.92

In addressing these issues the Explanatory Memorandum acknowledges that the establishment, composition and appointment of members of the advisory committee are solely the Minister’s prerogatives. The Explanatory Memorandum continues that it ‘is expected’, however, that the committee will comprise representatives from the Australian Press Council, the Walkley Foundation and Country Press Australia.93 In their submission to the Senate Committee inquiry into this Bill, Professor Matthew Ricketson, Dr Kristy Hess and Dr Julie Freeman from Deakin University noted that all of these organisations ‘have significant experience in the news media field’.94 The Deakin University academics argued however, that membership of the advisory committee could be further enhanced:

… by including representatives from the Media Entertainment and Arts Alliance (MEAA), the primary body representing journalists in Australia, and from academia. Journalism schools in universities are represented by the Journalism Education and Research Association of Australia (JERAA). 95

With regards to ACMA accepting the committee’s advice, the Explanatory Memorandum appears to consider that this will be inevitable, given that the members of the committee ‘will have significant experience with matters relating to news, journalism and other media related content’.96 It would appear that proposed section 205ZL would provide ACMA with a more compelling reason to heed the advice of advisory committee, however, as the regulator is required under this section to record any advice given to it by the committee in its annual reports.

Proposed section 205ZL requires the Chair of ACMA to include in the ACMA annual report each financial year:

• the name of each recipient of one or more grants of financial assistance

• the amount of each grant

• the purpose for each grant and (as noted above)

• any advice given to ACMA by the advisory committee.

Proposed section 205ZM provides that the inclusion of the expression ‘Regional and Small Publishers’ in the short title of the Bill does not limit the powers conferred by new Part 14F of the BSA. The Explanatory Memorandum provides:

This reflects that, notwithstanding the short title of the Bill, ACMA can make grants to entities operating in both regional and metropolitan areas, and to publishers, broadcasters, and content service providers’. 97

The reference in the Explanatory Memorandum to the eligibility of ‘broadcasters’ does not seem consistent with the criteria for eligibility for grants in proposed section 205ZH. Departmental officers confirmed that the fund is not intended to be available for broadcasters at the public hearing for the Senate Environment and Communications Legislation Committee’s inquiry into the Bill.98

92. Ibid.

93. Explanatory Memorandum, op. cit., p. 8. 94. Deakin University, Submission to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, January 2018, p. 3. 95. Ibid.

96. Explanatory Memorandum, op. cit., p. 9. 97. Ibid.

98. J Penprase (Department of Communications and the Arts), Evidence to Senate Environment and Communications Legislation Committee, Inquiry into Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017, 1 February 2018, p. 9.

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