Chapter 2


Key issues

2.1        This chapter examines the evidence received by the committee in submissions to this inquiry. Throughout this chapter, the committee has responded to specific matters raised in submissions. The committee's overall conclusions on the bill are at the end of the chapter.

Stakeholder views on the overall policy intent

2.2        The submissions received during this inquiry recognised the merit of developing measures to support Australian civic journalism, as well as the particular need to support civic journalism in regional areas. For example, Deakin University submitted:

Support for small and rural and regional publishers in the rapidly changing digital media environment is crucial to ensure the continuation of quality civic journalism for Australians living in regional, rural and remote areas.[1]

2.3        Deakin University expressed support for the Regional and Small Publishers Innovation Fund (the Innovation Fund) and the remaining elements of the Regional and Small Publishers Jobs and Innovation Package that this bill does not address (the cadetships and regional journalism scholarships). Deakin University provided the following further comments about the current media environment to explain why such measures are required:

As publishers in rural and regional Australia struggle to create a new business model in the digital media landscape, assistance is needed to ensure they continue to employ well-trained and educated journalists...Additionally, amid the rapidly changing digital media landscape, there are risks of ill-informed rural and regional communities, which can create debilitating democratic deficits.[2]

2.4        Schwartz Media and Schwartz Publishing, which publish The Saturday Paper, The Monthly, Quarterly Essay and Australian Foreign Affairs, advised that they 'strongly support the bill, and are confident that it will have a beneficial effect on the operations of regional and small publishers, and thereby press diversity in Australia'.[3]

2.5        The Walkley Foundation, which was established to promote excellence in journalism and is well known for the Walkley Awards for Excellence in Journalism, expressed its 'enthusiasm' for the Innovation Fund as well as its willingness to provide advice on how to administer it.[4]

2.6        Country Press Australia (CPA) commended the Government for developing initiatives to support small regional and rural publishers. Overall, it welcomed the proposed Innovation Fund, although it suggested that attention needs to be given to measures that will lead to 'better long-term outcomes for business and for jobs'.[5]

2.7        Given the fiscal constraints faced by the Australian Government, SBS expressed its concern that the proposed Innovation Fund utilises funding which could instead support the provision of 'sufficient and reliable' funding for public broadcasters. SBS submitted that the proposed Innovation Fund has the positive aim of promoting and cultivating journalism in regional areas, however, it argued that this 'gain should not come at the expense of the valued and unique work of public broadcasters'.[6]

2.8        In commenting on the bill, the Indigenous Remote Communications Association (IRCA) emphasised the need to take into account experiences Indigenous Australians have had with the media as well as the specific needs of Indigenous Australian audiences. IRCA expressed concerns about how Indigenous people and issues have been represented in mainstream news and current affairs reporting, and argued that, as a consequence of this, 'First Nations peoples highly value First Nations news content'.[7] IRCA also submitted:

...it is important that the role of First Nations broadcasters as the primary providers of news and current affairs to their communities is clearly understood. At a purely operational level, the delivery of a First Nations news service is a requirement for First Nations media organisations receiving funding through the Indigenous Advancement Strategy. At a strategic level, the delivery of a First Nations news service is a tangible enactment of Article 16 of the UN Declaration of the Rights of Indigenous Peoples to establish their own media in their own languages and to have access to all forms of non-indigenous media without discrimination.[8]

2.9        IRCA questioned the utility of the proposed Innovation Fund for remote Indigenous communities. IRCA's concerns are discussed in the following sections.

2.10      Guardian Australia advised that it supports the overall purpose of the proposed Innovation Fund in that it is intended to assist publishers to continue to produce Australian news and to employ Australian journalists in the face of market disruption. However, Guardian Australia suggested that an aspect of the proposed eligibility criteria might limit the extent to which this objective is achieved (this is discussed below).[9]

2.11      The Media, Entertainment and Arts Alliance (MEAA) submitted that it is 'supportive of the general approach' of the Innovation Fund—in particular it gave 'strong support' for the Fund's emphasis on civic journalism. MEAA is concerned, however, that as the Innovation Fund is a short-term program, its benefits will only result in a 'temporary boost' for the sector and 'be largely exhausted shortly after the 2020–21 financial year'. MEAA is 'hopeful' that consideration will be given to extending the Innovation Fund (as well as the other elements of the Regional and Small Publishers Jobs and Innovation Package) beyond 2020–21.[10]

2.12      MEAA's submission also commented on the remaining elements of the Regional and Small Publishers Jobs and Innovation Package, which are not addressed in this bill.

Eligibility criteria

2.13      As noted in Chapter 1, the Innovation Fund has been designed to enable the Australian Communications and Media Authority (ACMA) to make a grant of financial assistance to a constitutional corporation that publishes a newspaper, magazine or other periodical, or to a content service provider. The term 'content service provider' relies on the term used for Schedule 7 of the Broadcasting Services Act 1992 (BSA), which excludes, among other services, licensed broadcasting services.

2.14      Other proposed eligibility criteria previously announced by the Government that are expected to be included in the grant guidelines issued by the ACMA are listed at paragraph 1.16.

2.15      The following paragraphs examine the evidence received during this inquiry about the proposed eligibility requirements contained in the bill and those to be set by the ACMA in the grant guidelines.

Annual turnover requirement

2.16      The explanatory memorandum (EM) notes that the Government has announced that applicants would be required to have an annual turnover of between $300,000 and $30 million, and that this requirement is expected to be included in the eligibility criteria to be developed by the ACMA.[11]

2.17      CPA expressed concern that the $300,000 threshold could exclude certain well-established small publications, particularly weekly publications. CPA recognised that a minimum threshold is necessary 'to guard against start-ups and the like', however, to ensure that established small publications can apply for funding, CPA argued that:

  • the threshold could be reduced to $200,000; or
  • the eligibility criteria could be broadened to allow applications to be considered from 'small print publishers of long-standing who can demonstrate that they, too, should qualify'.[12]

2.18      The Department of Communications and the Arts (the department) was questioned about how the thresholds were identified. The department explained that the minimum threshold is intended to ensure that applicants are 'genuine providers of news content' that reach a reasonably sized audience, thus ensuring grants would have 'a reasonable level of impact for the content that's being supported'. The department also advised that CPA had written to the Minister to raise their suggestions with the Government directly.[13]

Committee comment

2.19      The committee notes the evidence from CPA regarding the proposed turnover requirement. In considering this evidence, it is important to note that the specific turnover thresholds are not prescribed in the bill, rather they will be determined in the eligibility criteria that will be finalised after the bill has been passed. The committee supports this approach for two reasons:

  • First, the committee recognises that to ensure the Innovation Fund is successful, a minimum eligibility threshold based on turnover is required to ensure that grants are provided to applicants with sufficient scale and audience. Whether a particular threshold amount such as $300,000 strikes the right balance, however, can be considered further outside of the legislative process. The committee has limited evidence before it to evaluate whether the $300,000 threshold strikes the right balance. In any case, the committee has focused on the overall policy intent underpinning the Innovation Fund of providing support to regional and small publishers. The committee is satisfied for the Government and the ACMA, with the support of the expert advice available to them, to determine the precise amounts for the annual turnover requirement that are appropriate for achieving the objectives of the Innovation Fund.
  • Secondly, the committee considers the approach taken in the bill provides appropriate flexibility that would enable technical matters such as this to be reviewed at a later date if necessary. By leaving certain matters to the grant guidelines, it remains possible to tweak aspects of the arrangements for the Innovation Fund after the bill has been passed, including as part of the review that departmental officers advised would take place after the first 12 months of the Fund's operation.[14] This approach should help to ensure the program is as well targeted as possible and that any perverse outcomes that might be identified can be readily addressed.

2.20      Although for the reasons outlined above the committee has not formed a view on the $300,000 threshold, the committee recognises that CPA's evidence on this matter should be carefully considered. Accordingly, the committee requests that the Government and the ACMA have regard to CPA's evidence on this matter when finalising the annual turnover requirement.

Control test

2.21      As with the annual turnover requirement, it is expected that the eligibility criteria issued by the ACMA will include a control test requiring applicants to be an entity that is majority controlled by Australian residents.[15]

2.22      Guardian Australia argued against the control test, the inclusion of which would exclude it from applying for grants under the Innovation Fund. Guardian Australia noted that the text 'does not appear to apply to other government assistance to the media—not even to the cadetship fund which forms part of this same assistance package'. Guardian Australia concluded that the effect of the proposed arrangements for the Innovation Fund would be the exclusion of 'a new, fast growing source of Australian news and of jobs for Australian journalists', despite its understanding that 'the whole purpose of the fund is to encourage both those things'.[16]

2.23      MEAA similarly questioned the merits of including a control test, which it argued would 'isolate potential applicants who otherwise fit squarely within the program's objectives'.[17]

2.24      This aspect of the eligibility criteria for the Innovation Fund was debated in the Senate during the debate on the bills which amended the media ownership and control rules and replaced the broadcasting licence fees with a spectrum charge. During this debate, the Minister informed the Senate that the government wanted the arrangements for the Innovation Fund focused 'on Australian media organisations'. The Minister noted that this would mean that Guardian Australia would be excluded, however, he added that other organisations such as News Corp Australia would similarly be excluded.[18]

2.25      Furthermore, during the committee's public hearing into this bill, officers from the department indicated that comparisons between the control test applied to the Innovation Fund and the absence of a control test for the cadetships and regional journalism scholarships measures are problematic. A departmental officer emphasised that the Innovation Fund is a business-oriented measure directed to Australian-controlled entities, whereas the principal beneficiaries of the cadetship and scholarship programs are individuals (namely, the cadets and recipients of the scholarships). In addition, the officer noted that the scholarships will be provided through universities, so there is no concept of a control test that is relevant to that measure.[19]

Committee view

2.26      The committee notes that, in designing the arrangements for the Innovation Fund, the Government's intention is that the program will only be available to Australian media organisations. The committee accepts the Government's policy decision and considers that the proposed control test is a suitable means to give effect to it.

Application to print and online only

2.27      IRCA commented extensively on how the bill has been drafted to make the Innovation Fund available to publishers of newspapers, magazines or other periodicals, or to content service providers, only. IRCA advised that it does not support the bill as currently drafted because licensed community broadcasters would not be eligible for funding.[20]

2.28      IRCA explained that remote Indigenous Australian communities 'have very few print news publications available to them'. It submitted that, although a diverse range of delivery platforms have developed, broadcast news remains the dominant form of receiving news in those communities. IRCA argued:

The limitation in the proposed Bill to funding of only print media (and online) is not consistent with the historical and contemporary context of First Nations media or the diversity of platforms being deployed by First Nations news organisations to reach First Nations audiences.[21]

2.29      IRCA argued that Indigenous Australian broadcasters should be eligible for funding 'on the basis of their unique role in the primary provision of news and current affairs content to First Nations communities, as well as their unique position in the provision of news and current affairs through the lens of First Nations peoples'. In addition, IRCA argued that:

  • a proportion of the total funds (10 per cent) should be allocated for Indigenous Australian news and media;
  • funding should be able to be provided 'for the purposes of building news and current affairs capacity in transitioning to contemporary news platforms and systems as well as in building capacity for the development of an increasing number of First Nations journalists nationally'; and
  • a broad definition of innovation should be adopted for the Innovation Fund that could include the development of a news and current affairs aggregation and sharing platform for Indigenous Australians.[22]

2.30      In response to IRCA's concerns, the department explained that in developing the Innovation Fund, the Government decided that the program would be open to publishers and content service providers only. However, a departmental officer noted that regional television and radio broadcasters would be eligible to participate in the cadetship program. It was also noted that the Australian Government supports community broadcasting through the Community Broadcasting Foundation.[23]

Committee comment

2.31      The committee acknowledges the concerns put forward by IRCA that measures to support civic journalism which are focused on print and content service providers could be of limited benefit for remote Indigenous communities given the reliance on radio and television in those areas.

2.32      In conducting this inquiry, the committee has focused on the legislative drafting of the bill and the overall merits of the proposed Innovation Fund. Fundamentally, the bill relates to publishing, not broadcasting. The Government's intention to limit the scope of the Innovation Fund to print and online publishers is clear. This decision reflects that the Innovation Fund is a response to the substantial challenges that publishers of civic journalism face due to the significant transition in the media industry that is underway. The committee considers that support for the provision of journalism to remote Indigenous communities could more effectively be provided through the Regional and Small Publishers Cadetship Program and the Community Broadcasting Foundation. The committee draws IRCA's submission to the Government's attention for consideration as the cadetship program and any future policies regarding the media sector are developed and promoted.

Other evidence regarding the eligibility criteria and the arrangements for administering the Innovation Fund

2.33      The submission from Schwartz Media and Schwartz Publishing contained a series of questions seeking clarification about how the proposed eligibility criteria and other aspects of the Innovation Fund would operate in practice. Matters about which clarification is sought included:

  • what a 'robust and transparent complaints process' entails;
  • whether the requirement relating to editorial guidelines and a code of conduct or similar framework relating to the provision of quality journalism requires documentation, or whether 'proof by practice' would be sufficient;
  • whether funds can be used to pay salaries to people involved in activities that are eligible for the Innovation Fund, such as the development of applications for the delivery of news;
  • the frequency of grant rounds within each year;
  • whether grant applications relate to one year of activities only, or will be required to address the three year timeframe; and
  • whether 'there be any relationship between the size of grants and the size of a business receiving those grants'—for example, Schwartz Media and Schwartz Publishing questioned whether a company with turnover of $300,000 could receive a $1 million grant in one year.[24]

2.34      The committee raised many of these issues with the department. The departmental officers' evidence clarified how particular aspects of the program are intended to operate. For example, the officers advised that it is currently planned that grant rounds would occur once a year, although it would be possible for applicants to seek funds relating to projects spanning more than one year. The officers confirmed that other matters relating to how the Innovation Fund would operate in practice would be outlined in detail in the grant guidelines. Furthermore, it was confirmed that there would be an opportunity for public consultation to inform the final grant guidelines.[25]

Committee comment

2.35      Based on the evidence given by the department at the committee's public hearing, the committee is satisfied that the grant guidelines will provide the clarification stakeholders are seeking about how aspects of the grant application process will work in practice.

Advisory committee

2.36      As noted in Chapter 1, proposed new section 205ZK would enable the Minister to establish an advisory committee to advise the ACMA on the exercise of the ACMA's powers relating to the Innovation Fund. Proposed new subsection 205ZK(2) would require the ACMA to have regard to any relevant advice given to it by the advisory committee.

2.37      The EM notes that whether to establish the advisory committee, and composition and appointment of members to the committee, would be at the Minister's discretion. However, the EM added:

...it is expected the Committee is to comprise, at a minimum, a representative appointed by the Minister from each of:

  • the Australian Press Council;
  • the Walkley Foundation; and
  • Country Press Australia.[26]

2.38      The EM further noted that the bill has been drafted to require the ACMA to have regard to relevant advice provided by the advisory council because it is expected that the advisory committee 'will be comprised of members who will have significant experience with matters in relation to news, journalism, and other media related content'.[27]

Stakeholder comments

2.39      MEAA submitted that it 'broadly support[s]' the idea of the ACMA seeking input on the distribution of grants from an external advisory committee comprised of the organisations identified in the EM.[28]

2.40      The Australian Press Council submitted that it 'has the knowledge and experience to participate on the advisory committee...and welcomes the opportunity to do so subject to being satisfied that its participation on the committee would not give rise to any perceived, potential or actual conflict of interest'.[29] Similarly, the Walkley Foundation indicated its willingness to participate on the advisory committee.[30]

2.41      Deakin University agreed that the members of the advisory committee suggested in the EM (the Australian Press Council, CPA and the Walkley Foundation) 'all...have significant experience in the news media'. Deakin University submitted that membership of the committee 'would be enhanced' if, in addition to the organisations identified in the EM, MEAA and academia were represented on the advisory committee.[31]

2.42      In light of its concerns about how Indigenous people and issues are represented in mainstream news and current affairs reporting (see paragraph 2.4), IRCA reasoned that 'groups not represented effectively in mainstream media need to be included in any activity aimed at enhancing public interest journalism'. Accordingly, IRCA called for the bill to be amended to require that culturally and linguistically diverse communities, including Indigenous Australians, are represented on the proposed advisory committee.[32]

Committee comment

2.43      The committee considers that the establishment of an advisory committee to assist the ACMA is a sensible proposal. It is important to note that the bill does not mandate the creation of an advisory committee; rather, it provides that the Minister may establish such a body. The committee supports this approach, as it will provide the Minister with the flexibility to judge whether, and for how long, the advisory committee is required, and thus it promotes the efficient use of public resources. It would be unusual to stipulate in the bill that the Minister must make certain types of appointments to a body that the Minister is not required to establish.

2.44      In any case, the committee is confident that appointments made by the Minister will ensure the advisory committee has the expertise necessary to fulfil its function of advising the ACMA. The committee recognises, however, that the evidence received during this inquiry regarding the composition of the proposed advisory committee may assist the Minister in making appointment decisions and, accordingly, the committee draws this evidence to the Minister's attention.

Role of the ACMA

2.45      It is intended that the ACMA would administer the Innovation Fund. However, as discussed above, the Minister would be able to appoint an advisory committee to assist the ACMA in discharging its responsibilities. In addition, although the Innovation Fund would be administered by the ACMA, the department advised that it 'will be closely involved in its design and establishment'.[33]

Stakeholder comments

2.46      Despite supporting the ACMA's work in other areas, IRCA questioned why the ACMA had been selected to administer the Innovation Fund. IRCA submitted:

IRCA has no issues with the integrity and professionalism of the ACMA and can only commend its capacity to manage spectrum, broadcast licensing, research and associated regulatory roles. However, the ACMA has no current capacity for administering a grants program and IRCA questions the cost-effectiveness, and risk of mixed purpose, in establishing a grants program in ACMA without the history of grants administration. The Department of Communications and the Arts has that experience and we strongly recommend that the Australian Government assign the grants administration role to that department.[34]

2.47      Deakin University also noted that the ACMA's remit does not include print‑based media 'which historically has been the province of the self-regulatory body, the Australian Press Council'. However, Deakin University's submission also noted the arrangements for the proposed advisory committee. Ultimately, it did not express a view as to whether the ACMA is the most suitable body to administer the Innovation Fund.[35]

2.48      MEAA gave support for the Innovation Fund being administered by the ACMA.[36]

2.49      The ACMA confirmed that the Innovation Fund would be the first grants program administered by the ACMA as, to date, the ACMA has not had the power to administer grants on behalf of the Commonwealth.[37] The department advised, however, that the Government considers it is important for the Innovation Fund to be administered by an independent authority such as the ACMA. Mr James Penprase, a director in the department's industry section, provided the following evidence regarding why the ACMA had been chosen to administer the Innovation Fund:

One of the key objectives is to ensure that [the Innovation 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.[38]

2.50      The department also noted that the proposed advisory committee would assist the ACMA to administer the Innovation Fund.[39]

Committee comment

2.51      The committee supports the Government's decision to allocate responsibility for administering the Innovation Fund to the ACMA. Fundamentally, there is merit in certain grants programs being administered by an independent statutory authority. The ACMA is a suitable agency to administer the Innovation Fund given its existing responsibilities regarding media ownership and control. Moreover, any remaining concerns stakeholders might have about the ACMA's lack of experience in administering grants to publishers and content service providers should be alleviated by the proposed advisory committee, which would provide the ACMA with an additional source of expert knowledge to help achieve the objectives of the Innovation Fund.

Committee view

2.52      It is vitally important that Australia has a healthy media sector and that Australians have access to high quality and relevant news reporting on issues of public interest or significance. It is also widely recognised that media organisations face significant challenges funding civic journalism in the current operating environment. Accordingly, it is in the public interest for the Government to ensure that the regulatory settings imposed on the broadcasting sector are appropriate and to support Australian media organisations to adapt to this changing media environment by providing well-targeted support.

2.53      As outlined in Chapter 1, this bill forms part of a suite of measures developed by the Government. These measures represent the most significant reform of Australia's media laws in decades. The committee commends the Government for its commitment to developing and delivering meaningful reform, such as the abolition in 2017 of technologically obsolete media control and ownership rules. Such reform will assist the sector to respond to these challenges.

2.54      The bill examined by this inquiry would establish the legislative framework for a grants scheme designed to assist regional and small publishers to innovate and compete more successfully in the changing media environment. The committee welcomes and supports this bill. The committee considers that the proposed Innovation Fund is an appropriate and well-targeted response to the need to support Australian civic journalism.

2.55      The committee thanks the stakeholders who contributed to this inquiry and recommends that the bill be passed by the Senate promptly.

Recommendation 1

2.56      The committee recommends that the Senate pass the bill.

Senator Jonathon Duniam
Chair

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