Last September I warned of the prospect of news deserts developing in this country. Among my recommendations was a policy offering tax credits to news media organisations for the employment of journalists. The report was met with indifference by the politicians in a position to do something about the hollowing out of our news ecosystem.
Yesterday, the News and Media Research Centre at the University of Canberra released a report advocating the use of refundable tax offsets for the employment of journalists in Australia. It is an idea whose time has come – on both sides of the Tasman.
For two decades our news media have faced the profound effects of technological change on a business model that has become increasingly fragile. Part of their response to declining traditional revenue has been cuts to editorial staff. Those cuts have been made not with scalpels but with machetes. Our newsrooms are a shadow of what they once were, and regional newsrooms have suffered particularly deep incisions. Australia has suffered similar damage to its journalistic resource.
Payroll tax credits are not a new suggestion – such proposals have surfaced more than once in Australia. Canada and two U.S. states (New York and Illinois) have made them a reality. South Korea has an even broader scheme that embraces the creative industries, while France has tax incentives to encourage investment in news organisations.
A tax offset (‘tax rebate’ or ‘tax credit’) is a reduction in the amount of tax owed after taxable income has been calculated. In that regard it is different from a tax deduction, which reduces taxable income before tax owed is calculated. Some tax offsets are ‘refundable’, meaning if the offset amount exceeds the tax owed, the difference is refunded.
The Canberra report has been written against a stark background. It says that Australia’s journalism workforce has contracted markedly in the past two decades, accompanied by what it quaintly calls “employment precarity”. By that it means a reduction in secure, full-time positions and increasing use of freelancers.
“Australian Bureau of Statistics Labour Force Survey data indicate a substantial decline since 2007 in employment across newspaper, periodical, book and directory publishing, and broadcasting. At the same time, the number of workers holding a single job has steadily decreased, while multiple jobholding has increased, underscoring the growing prevalence of freelance, contract and second jobs in the sector.”
The report found that a scheme which enabled news organisations to subsidise journalists’ salaries “would make a meaningful difference, helping to stabilise employment and strengthen the sustainability of Australia’s journalism workforce”.
It modelled tax offsets at three levels – 10 per cent, 20 per cent, and 30 per cent – that would produce estimated annual costs between $A71 million and $A250 million. It also recommended eligibility criteria based on fostering public interest journalism. The criteria are:
- Applicants (the news-producing organisation) must produce a threshold level of public interest journalism as a proportion of total number of stories e.g. greater than 50 per cent.
- Only permanent (full-time or part-time) journalists’ salaries are eligible for the offset, wages to freelancers are excluded.
- Applicants must have less than 30 per cent market share of Australian advertising revenue of the specific sub-sector in which they operate (such as print and digital news media, television, radio).
- For local news organisations, eligible salaries must be for journalists living within 100 kilometres of the geographic area they report on.
The eligibility criteria could, however, be expanded to help recover the diminished workforce, particularly outside major metropolitan areas. It would do so by recognising the eligible workforce includes:
- Full-time, part-time,freelance journalists and editors paid to help produce public interest journalism or fact-check content.
- Photojournalists, videographers and graphic designers who produce or contribute to public interest journalism.
- Content producers, audience engagement and social media content producers, subeditors and podcast creators contributing to the production and distribution of, as well as engagement with, public interest journalism.
That expansion appears to foresee inevitable changes in the delivery of journalism as digital platforms replace traditional media.
The report’s definition of public interest journalism is significantly wider that what is captured in New Zealand by the Local Democracy and Open Justice funding schemes through NZ on Air.
“We broadly define public interest journalism as news and other information which is produced and disseminated to the public according to high standards of accuracy, ethics, fairness, independence and accountability in line with best-practice journalism.”
However, it is more than likely that, if the policy is adopted by the Australian government, the public interest definition would follow that adopted by the federal regulator, the Australian Communications and Media Authority (ACMA). It defines public interest journalism as original content that records, reports, or investigates:
- Issues of public significance for the country’s inhabitants.
- Issues relevant to engaging people in public debate and in informing democratic decision making.
- Content which relates to community and local events.
The aspect of tax offsets or tax rebates that cause greatest concern to politicians and bureaucrats is the fact that they rely on self-reporting by the recipients of the state’s largesse. The report recognises the risks inherent in such systems and recommends random audits by a body such as the ACMA and third-party assurances of accurate reporting.
New Zealand is no stranger to the concept of tax rebates. The Screen Production Rebate for movie and video productions in New Zealand offers a 40 per cent rebate on qualifying expenditure up to $NZ30 million. The Game Development Sector Rebate is a financial incentive designed to support the ongoing development and growth of our video game sector. It offers a 20 per cent refund on approved expenses for eligible businesses, capped at $3 million a year.
The premise for rebates of this sort is that, without them, the business would not be here. In the case of screen production and video game development they would go elsewhere. In other words, “we wouldn’t have the tax revenue in the first place”.
I suggest that, as far as journalism is concerned, the premise is far more existential. Our political parties do little more than pay lip service to the concept of public interest journalism as a public good. They target funding to specific areas of journalistic endeavour rather than treat that public good in a way that embraces the industry as a whole. As a result journalism has been in decline in terms of resourcing and breadth of coverage.
This collective failure means we are in danger of reaching a point where journalism-at-scale could disappear. We are already at the point where local journalism has been lost in some areas and the scrutiny of public activities has had to be prioritised by shrunken newsrooms.
Making it cheaper to hire and retain journalists by offering payroll rebates in New Zealand would be a significant step toward sustainability. It has the virtue of not trying to choose winners (or favour a privileged few). It would be available to any organisation, irrespective of whether it was for-profit or not-for-profit, so long as it met criteria based on public good – building societal cohesion and trust in public institutions through scrutiny and transparency.
You can access the University of Canberra report here.
Easy access at last
Today NZME’s early morning offering Garth Bray Business and Ryan Bridge Today are finally easily accessible via Three and Three Now. A television broadcast option makes both news programmes fully competitive with TVNZ. Expect to see NZME’s audience rise.
Not much has changed, apart from newsreader Niva Retimanu facing the camera rather than being shown side-on to the microphone á la radio.
it is also pleasing to see that Herald branding remains prominently on display on screen. That is something Stuff should insist upon with the nightly Three News. Herald Now has created the precedent.
The NZME breakfast shows are still available on the Herald website and via YouTube.
