Xenophon Team agrees to dumping the two-out-of-three rule for TV, radio and press ownership in exchange for $60m innovation fund to boost diversity

This article is more than 3 years old

This article is more than 3 years old

The Turnbull government has secured the numbers to scrap longstanding controls on media ownership, and trigger a range of consolidations in the Australian news landscape that are likely to lead to further market concentration.

After weeks of negotiation, the Nick Xenophon Team has agreed to support the government package in return for limited concessions designed to enhance media diversity, including a new $60m fund for independent and regional publishers, and funding for young rural journalists.

After signalling publicly that it would consider a broader range of diversity enhancing measures, like introducing tax breaks for smaller, independent publishers to encourage them to employ more journalists – the Coalition backtracked abruptly during the protracted negotiations with the NXT, and took tax breaks off the table.

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The core of the government’s proposal, which has been pursued since the Coalition took office in 2013, will involve the scrapping of the two-out-of-three rule, which means media moguls will be able to own television, newspapers and radio stations in the same market.

The government’s package also ditches the 75% reach rule, which prevents Nine Entertainment, Seven West Media and the Ten Network from owning their regional affiliates, due to restrictions on a TV network broadcasting to more than 75% of the population.

Major Australian media companies previously opposed scrapping ownership restrictions on the basis it would make the media landscape less diverse, but many have now switched camps and support scrapping the ownership restrictions, claiming the overhaul will help them improve commercial viability.

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While the government argues the current regulations were drafted for the analogue age, and lack relevance in the digital one, Australia’s media market is already one of the most concentrated markets in terms of ownership in the developed world.

In the Senate debate on Wednesday night the Greens leader, Richard Di Natale, said market concentration meant there was an imperative to encourage independent journalism. “In any democracy, we should be encouraging a range of voices,” Di Natale said.

The new innovation fund, to be administered by the communications regulator, will benefit smaller publishers provided they are Australian operations, and not connected with foreign media companies – meaning companies such as Guardian Australia, and potentially others, such as BuzzFeed and the New York Times, will not be able to apply for grants.

Eligible small publishers will be able to apply for grants to perform civic journalism, buy equipment, and develop digital products, like new apps.

The government has agreed to provide scholarships for journalists from regional areas, and rural cadetships.

The government will also ask the Australian Competition and Consumer Commission to conduct an inquiry into Google, Facebook and the other internet giants, who are contributing to a loss of advertising revenue that is challenging the commercial viability of news organisations.

Xenophon told the chamber the negotiations to settle the package were the most robust, protracted and difficult negotiations he had engaged in in his 20 years in state and federal politics.

“This is a package of measures that will support Australian journalism,” Nick Xenophon told the Senate on Wednesday night.

But the Labor senator Sam Dastyari rounded on Xenophon after he outlined the terms of his deal to the Senate. “You are better than this dirty deal which has been done at the 11th hour.”

Dastyari said media diversity in Australia should not be traded off for “a $60m slush fund”.

“It doesn’t go to the Guardian. It doesn’t go to BuzzFeed,” Dastyari said. “We are selling out journalism for 60 scholarships?”

The Labor senator said the deal was structured to appease conservatives both in the government and the Senate. “They are doing in the Guardian. You have thrown them under a bus”.

Dastyari, who served with Xenophon on a Senate inquiry into public interest journalism, said the NXT leader had started out with big ambitions, but had emerged from his talks with the government with meagre outcomes.

“I’m not opposed to a deal, but at least make it a good one,” Dastyari said.

The communications minister Mitch Fifield said the strongest diversity protections were commercially viable media companies, not legislative controls, and commercial viability would ensure “strong media voices” into the future.

“It provides [media organisations] with a shot in the arm, with a fighting chance,” Fifield said.

While the government has now locked down the NXT, the Australian Conservatives senator Cory Bernardi is signalling he will move amendments to the government’s broadcasting bill during chamber debate to add the changes to the ABC sought by One Nation during its own protracted negotiations with the government.



The government came to terms with One Nation weeks ago, but the deal is basically meaningless, because there is not broad parliamentary support to amend the ABC’s charter or cut its funding. That would need to be done in separate legislation, and the numbers aren’t there.