Wednesday, 17 February 2021
Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020; Second Reading
The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 establishes a mandatory code of conduct to help support the sustainability of the Australian news media sector by addressing bargaining power imbalances between digital platforms and Australian news businesses. The proposed code has been over three years in the making, spearheaded by the ACCC through its Digital Platforms Inquiry. It represents Australia's attempt to address the decline in public interest journalism by capturing news media revenue from dominant digital platforms, as other jurisdictions have attempted to do with varying degrees of success.
From the outset, Labor has indicated in-principle support for a workable code to address the bargaining imbalance between dominant digital platforms and the news media. When the government first announced it would move to legislate a mandatory code in April last year, Labor said, 'Australian media companies must get a decent return for their investment in public interest journalism from digital platforms such as Google and Facebook.' Indeed, before the government announced it would legislate a mandatory code, Labor called for it to be fast-tracked. In an opinion piece in TheNew Daily on 18 April 2020, I said:
The government must recalibrate and deliver its responses to the recommendations of the ACCC's Digital Platforms Inquiry in a timely manner in a world changed by COVID-19.
This means being ready to intervene with a mandatory code to support news media companies being paid for their content on digital platforms, in the event progress on a voluntary code is inadequate.
… … …
The media … will not sustain the inaction of this government much longer.
With the prospect of regional areas becoming news deserts, it's well past time this government just did its job.
I would like to turn to the issue of overall delay in this matter. Labor has long recognised the profound impact that digital platforms have had on the Australian media. For years Labor has been calling on the government to overhaul the outdated policy and regulatory framework to address digitisation and convergence. It is a matter of public record that it was Labor who first called for an inquiry to examine the contemporary media landscape. In 2016 I called for a thorough examination of the state of the Australian media landscape, noting there had not been a comprehensive inquiry into ownership, concentration and competition in the Australian media market since the late 1990s. I said that the government should ask an independent body, such as the ACCC or the Productivity Commission, to assess the state of play so parliamentary decisions could be evidence based. But the then minister for communications rejected this suggestion, saying, 'All the relevant facts are known.' Over one year later, in December 2017, the government finally did direct the ACCC to conduct an inquiry into the impact of digital platforms on the state of competition in the media and advertising markets, the Digital Platforms Inquiry. So, contrary to the then minister's assertion, clearly all the facts were not known. The ACCC was given 18 months to inquire and report, and its issues paper contained around 48 questions for consultation. Ultimately, the final report of the Digital Platforms Inquiry contains 23 recommendations and highlights a number of ongoing investigations by the ACCC.
Labor is pleased Australia now has the benefit of the ACCC Digital Platforms Inquiry. We acknowledge the power imbalance identified by the ACCC between news media companies and digital platforms. We support a workable code to address this imbalance. But we are frustrated by the government's lack of urgency in acting to address the challenges facing Australian media and public interest news gathering in particular.
Over three years ago, in 2017, I was in this place debating the government's changes to media law. At the time, the government heralded its changes as 'a new era for Australia's media', claiming:
The government is strengthening Australia's media industry, enhancing media diversity and securing local journalism jobs, particularly in regional areas.
Flash forward to today, however, and the reality reports a very different story. Around 200 newspapers have closed and hundreds of journalism jobs have been lost. There are around 21 local government areas without coverage from a single local newspaper, either print or online, including 16 in regional Australia. Media diversity in regional and remote areas is already at or below the minimum number of voices in 68 per cent of licence areas.
The government recently admitted signs of market failure in regional commercial television broadcasting. Regional media organisations launched a campaign, Save Our Voices, voices forgotten by years of government inaction and neglect. In fact, the government's media law changes failed to address the true reform agenda. It left media exposed to external shocks and repealed the two-out-of-three cross-media control rule, which permitted Australia's already highly concentrated media sector to become even more concentrated. At the time, Labor warned the changes were inadequate and urged the government to undertake genuine holistic reform. When the final report of the ACCC's Digital Platforms Inquiry was delivered to government in June 2019, it devoted an entire appendix to the many reviews of media industry laws and regulations that have been conducted.
Underlining Labor's repeated calls for the need for genuine reform, the ACCC's recommendation 6 is that a new platform-neutral regulatory framework be developed and implemented to ensure effective and consistent regulatory oversight of all entities involved in content production or delivery in Australia, including media businesses, publishers, broadcasters and digital platforms. While the government ultimately accepted this recommendation in its December 2019 response to the ACCC's final report, we are yet to see such a framework materialise. The years-long delay under this government simply drags on and on.
Unfortunately the process to implement a mandatory news media bargaining code is also running late. This government said it would get the code in place last year, in 2020, but it was late introducing the bill to the parliament and didn't introduce it until the final sitting week of parliament last year. As late as mid-February 2021, as late as yesterday, Labor was still waiting for the government to reveal potential government amendments to its own legislation. Even at this late stage there has been great uncertainty as to what the government's final code will be. Labor—and many others, no doubt—has been waiting to find out. Labor welcomes news that Australian publishers are signing on to Google News Showcase, but we query whether the process needed to be dragged out in this way.
It is now over 18 months since the ACCC found that the major digital platforms are unavoidable trading partners for Australian news businesses and, therefore, possess substantial bargaining power over these businesses. And it is over 18 months since the ACCC recommended that designated digital platforms provide codes of conduct governing relationships between digital platforms and media businesses to address the imbalance in the bargaining relationship. Yet we've only just had the government confirm the final shape of this bill that's before us.
Labor supports the bill as amended. We note, however, that there remains a great deal of uncertainty about the future designation of platforms and services, which remains a matter of ministerial discretion. We note that not all Australian news media businesses have struck commercial deals with the digital platforms and that the passage of this bill may impact their relative negotiation position with those platforms. It is not clear how the government will achieve the intention of levelling the bargaining position between the news media and digital platforms if the negotiate-arbitrate provisions of this bill do not apply. For this reason, Labor recommends that the government use precise language in public statements regarding what designations it intends to make under the code. This is in order to save any misunderstanding or unnecessary uncertainty for the media, the digital platforms, small businesses and citizens and consumers who may be impacted.
It was over a year ago, in December 2019, that the government tasked the ACCC with facilitating the development of a voluntary code of conduct to address bargaining power concerns between the digital platforms and media businesses. At that time, Labor warned that the government's record of going slow meant there could be little confidence that the regulatory asymmetry, uncertainty and delay would end any time soon. In April 2020, in response to COVID-19 pressures as well as ACCC advice that a voluntary agreement on the issue of remuneration was unlikely, the government directed the ACCC to develop a mandatory code of conduct. Labor welcomed this step. In July 2020 the ACCC released a draft code for consultation, stating the code would be finalised shortly after. Labor welcomed this process. But the fact is the code was not finalised shortly after. It wasn't until December 2020 that the government introduced legislation for a mandatory code into this parliament. The Senate referred the bill to the Senate Economics Committee for inquiry and report by 12 February 2021. Labor welcomed the introduction of the bill into parliament, particularly welcoming the inclusion of the public broadcasters, the ABC and SBS, which Labor had called for, but criticised the delay and the government's failure to deliver last year for a media industry in crisis.
The Senate inquiry was an opportunity for public scrutiny of the bill. But it wasn't until after the conclusion of public hearings for the inquiry that there were further developments and negotiations between the government and Google. As late as 4 February, the government signalled that it may be contemplating key amendments to its bill. On 4 February, it was reported:
Google has not backed down on its threat to withdraw from Australia in a call between Scott Morrison and the tech giant's parent company chief Sundar Pichai on Thursday, but tensions appear to be easing.
The Prime Minister said … "I have been able to send them the best possible signals that should give them great encouragement to engage with the process and conclude the arrangements we'd like to see with the news media organisations," …
On 5 February 2021, it was reported of Google News Showcase:
… the Treasurer urged the search giant to launch the product and get deals with publishers done.
There was an understanding that the government may then consider amendments to the proposed mandatory bargaining code which the Silicon Valley-based company has requested, industry sources said.
Labor further notes that there were also developments and negotiations between Google and the news media which are ongoing. On 4 February 2021 Google announced that Google News Showcase had launched in Australia, and a number of Australian publishers, representing even more titles, have signed on to it. Labor is pleased that this list grows by the day. It demonstrates that commercial deals are capable of being executed in the absence of regulation, as has been demonstrated overseas in recent months as well as in Australia more recently.
It is widely accepted that the spectre of the proposed code has assisted in making the digital platforms more responsive to the needs of the Australian news media, and this is welcome. While it is the case that the process has resulted in commercial deals being struck, it is also the case that the delay to this process has stifled innovation and investment in Australia. I note that while the government has made quite a spectacle of not responding to so-called threats made by digital platforms, it would appear that the resolution of the issues required only a few technical amendments. There have been varying reports as to whether the government has caved or backed down or whether they are simply making some minor clarifications.
At all times, however, Labor has been outcomes focused. We know that this code is about ensuring the sustainability of public interest journalism in Australia and the importance of the fourth estate in light of the ongoing disruption to news media, which it has experienced for decades, to its traditional business models and also in response to the impact of the market power of the digital platforms. Ultimately, this is about the healthy functioning of our democracy. Given the potential impact of this legislation on news media businesses, digital platforms, small businesses, citizens and consumers, the government should've had its ducks in a row. The government should have circulated its amendments much earlier than it did to end the uncertainty and level the playing field between the news media and the digital platforms.
I want to highlight some of the stakeholder concerns with the bill. Labor supports the intention of the bill, which, as I said, is to address the dominance of digital platforms such as Google and Facebook for the benefit of the Australian news media. Labor notes, however, that the corollary of addressing the dominance of digital platforms may involve potential impacts beyond the news media, the outcomes of which are unknown. The government's indication by media release on 8 December 2020 that the code will initially apply to Google Search, combined with the minister's subsequent enthusiastic promotion of alternative search engines Microsoft's Bing and DuckDuckGo, has caused many Australians and small businesses to experience uncertainty and worry as well as to express concerns about the impact of the potential withdrawal of the Google search engine from Australia.
In addition to the submissions to the inquiry, this has been brought to the attention of Labor MPs and senators by many individual constituents and small businesses directly. A broad range of stakeholders, including peak business groups, acknowledge the potential disruption for millions of consumers and small businesses during the economic recovery in the event Google were to withdraw search and Facebook withdraw news from Australia in response to the passage of the bill. This is despite the availability of alternative search engines and social media platforms.
It is very concerning that a number of questions about designation under the code asked by the Senate scrutiny of bills committee have not been answered by the Treasurer and some remain outstanding. It is also concerning that Treasury and departmental officials were unable to provide satisfactory answers to key questions on the impact and risk assessment and cost-benefit analysis on the bill at the public hearing. For this reason, Labor submitted further questions on notice in writing and we remain concerned that no further analysis or information appears to have been forthcoming in the response. It would appear that the Prime Minister, the Treasurer and the minister caused a great deal of uncertainty and anxiety for small business when all that was needed were some 'clarifications and technical amendments'.
Some of these concerns were held by smaller media players. Evidence to the inquiry indicates that, in the event that Google and Facebook withdraw services from Australia, the fact is revenue will not flow from these digital platforms to the news media in that scenario. Some mainstream media businesses may benefit from increased direct traffic to and/or advertising on their own news products and services, but small and independent media businesses risk losing search and social traffic referrals and, as a consequence, undermining media diversity.
Labor's of the view that a strong, high-quality and diverse news media sector is essential to a healthy democracy. Equally, we are of the view that a strong, high-quality and diverse tech sector is necessary for a healthy network society and digital economy. We are mindful of the fact that Australia has one of the most concentrated media markets in the world and that search engines and social media are instrumental in facilitating access for many Australians to a more diverse range of news media, both domestic and international. Australians deserve the best in terms of choice and quality, and we are concerned that any reduction in that choice or quality would be to the detriment of Australian citizens and consumers. We also recognise that Australian small businesses and consumers deserve choice and the best quality when it comes to digital services and products. They also deserve choice and quality when it comes to public interest journalism.
Labor notes there is broad in-principle support for a code and the regulation of digital platforms; however, as I have mentioned, many stakeholders have concerns with the bill as drafted. There is a divergence of views, including between established mainstream media and, as I mentioned, new and emerging media, in accordance with their respective reliance on search and social media for audiences and revenue. A range of stakeholders sought amendments to the bill, including peak media industry bodies. We note concerns around unintended consequences—such as those relating to the professional standards test, as well as the potential to incentivise clickbait—and regard these as matters of consideration up to, including and after the 12-month review of the code. The Bills Digest summarises these concerns, and I won't restate them all here. Suffice to say there will be plenty of issues to canvass in the 12-month review of the code.
On ABC Radio National this week, the Treasurer said that the deals being struck, even before the passage of the legislation, 'will transform the domestic media landscape' and are 'something that can ensure a sustainable media landscape'. There is no doubt that an additional revenue stream is a welcome thing, and we hope the deals under this code are transformative. What we want to avoid is the government dusting off its hands and saying, 'job done', as it did in 2017 when it proclaimed its changes to media law heralded a so-called new era for Australia's media.
We hope this measure makes a significant contribution to the news media. Labor is pleased at evidence that work on the code to date has improved the responsiveness of digital platforms to the news media, but we note it does not of itself ensure a sustainable media landscape. We are mindful of evidence that the code does not guarantee any particular outcomes for the media, journalists, citizens or consumers. At public hearings to the inquiry, media stakeholders were not yet clear on how much additional revenue derived as a result of an improved bargaining position under the code will actually be invested in additional journalists or journalism. This underscores the fact that the code is not a silver bullet and that this government must do more to support public interest journalism in Australia. In the time since the ACCC released the final report of the Digital Platforms Inquiry in July 2019, the government has failed to address a number of these recommendations, including genuine media reform, stable and adequate funding for public broadcasters, adequate direct funding, tax incentives and philanthropy measures. After such a significant investment of time and resources by government and industry, this government has proved incapable of implementing reform to address issues that, years ago, they said warranted reform.
Next month marks one year since COVID-19 related closures and suspensions of news titles began to be announced, compounding the closures that had already occurred over the decade prior as a result of many factors, including digital disruption. This code is only one of a suite of measures recommended by the ACCC to support public interest journalism. The evidence before the Senate inquiry into the bill was clear: this government has a lot more to do to support public interest journalism in Australia. This includes support to ensure the ongoing viability of the Australian Associated Press as the key wholesale provider of news in Australia and a critical pillar of media diversity. The code does nothing to help AAP Newswire, and any notion of trickle-down economics under the code is naive. Labor drew the plight of AAP to the government's attention in March 2020, including through Senate estimates, and called on the government to provide COVID-19 relief to the media in April 2020. The government's April 2020 announcement of the $50 million Public Interest News Gathering Fund was inadequate. It was a re-announced fund, mainly comprised of funds they had previously failed to get out the door, and an admission of failure. The government's September 2020 announcement of $5 million for AAP was late and inadequate. The benefits to democracy of an independent wholesale Newswire business are many, and we urge the government to make appropriate provision for AAP as a matter of priority.
Last year Labor also led calls decrying the exclusion of the public broadcasters, the ABC and SBS, as a missed opportunity, particularly for news in regional areas. Labor said that excluding the ABC and SBS was a missed opportunity to derive value for money from taxpayer investment in news media production. It was also a missed opportunity to address another finding of the ACCC in the Digital Platforms Inquiry:
… the public broadcasters are not currently resourced to fully compensate for the decline in local reporting previously produced by traditional commercial publishers.
It was counterintuitive to exclude the ABC and SBS from a framework designed to support public interest journalism, just as this government's deep ABC cuts ran counter to the ACCC's recommendation that the ABC have stable and adequate funding. We're pleased that this government has come to its senses on this point and at least not excluded the public broadcasters in this bill.
Meanwhile, it remains to be seen what impact this code will have to support small and independent publishers in outer metro and regional areas. Country Press Australia is a strong voice for its members and holds valid concerns that the deals now being struck under Google's News Showcase, for example, will benefit mainstream media players while smaller regional outlets are set to wait for the crumbs yet again. It is imperative that the government ensure direct taxpayer funded grants for public interest journalism be well targeted and supplied to public interest journalism outlets. They are the lifeblood of regional communities, yet they do not derive significant benefit under the code, whether via a standard offer or collective negotiation or arbitration.
In conclusion, Labor supports this bill amended by the government. We join with other stakeholders in commending the work of the ACCC and Rod Sims in progressing this work. We thank the ACCC's global counterparts for their input and collaboration. Labor acknowledges the many industry stakeholders that have participated in multiple meetings and consultations and made many submissions at considerable time and cost, and the public servants who have been working to settle the code. I acknowledge the Senate's scrutiny of this package in the public interest. Labor supports this bill and emphasises that support for public interest journalism is not a set-and-forget task. It is imperative that this government act on the balance of the recommendations of the final report of the Digital Platforms Inquiry as a matter of urgency. To that end, I move the second reading amendment circulated in my name:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes:
(1) Australia has one of the most concentrated media markets in the world;
(2) since the Government's changes to media law in 2017 there have been alarming contractions and warning signs of market failure in Australia's media landscape;
(3) the bill was introduced 18 months after the ACCC delivered the Final Report of the Digital Platforms Inquiry in June 2019 and does not address all of the ACCC's recommendations to support public interest journalism;
(4) the Government must do more to support public interest journalism in Australia as a matter of urgency; and
(5) the Government should make appropriate provision to ensure the viability of AAP newswire as a matter of priority."
An informed public is a public that can participate meaningfully in democracy. Over recent years we have seen digital platforms such as Google and Facebook make a killing from advertising and news content. They have provided, however, a fantastic service to the public. At the same time, new media providers are struggling to find a workable business model for public interest journalism. We've seen many smaller, though equally important, media providers sadly leave the market. Something doesn't stack up. As a consequence, democracy is suffering.
It was no surprise when the ACCC released its finding that there is a significant imbalance of bargaining power between digital platforms and news media providers. Essentially, this means that news media providers are not being fairly remunerated for their content. The Morrison government, having worked closely with the ACCC and other stakeholders, is introducing this bill to establish a mandatory code of conduct to address this problem in a fair, flexible way. Make no mistake, this bill is being widely watched around the world.
In summary, this important bill will establish a mandatory code of conduct to ensure major digital platforms pay Australian media companies for use of news content. This is achieved through six principal elements which underpin the code. The first element is bargaining. Digital platforms and news media providers are bound to bargain in good faith.
The second element is compulsory arbitration. When parties cannot come to agreement about remuneration after three months of negotiations, the code sets up a mechanism for the dispute to be referred to an arbitration panel. They will consider the facts at hand and select between the two final offers made by the bargaining parties. In so doing, they must consider the reasonable costs of both the news media business and the digital platform. This reflects Google's request, following the ACCC draft version of the code, that it needed to take account of the value that both sides bring to the table—a necessary adjustment and amendment. Further, the code also clarifies that payments must be made in lump sum rather than digital platforms having to pay per click. This was an important feature of the code for digital platforms in this review process.
The third element is notice of algorithm changes. Digital platforms must notify news businesses of algorithm changes with respect to listing items on a search. However, as per Google and Facebook's request, there are important digital-platform-friendly limits on this requirement which ensure this requirement is streamlined and workable.
The fourth is nondifferentiation. This mandates that digital platforms must not differentiate between news media providers participating in the code and those that are not. This is an important protection for news media providers which safeguards their commercial autonomy.
The fifth element is contracting out. The bill allows digital platforms to reach a commercial bargain with news media providers outside the code about remuneration and other matters. In fact, it openly encourages parties to undertake commercial negotiations outside the code. In this way, the code does not represent a regulatory behemoth, as some may have argued, but merely a minimum standard which protects parties in instances where there is a substantial bargaining imbalance.
The sixth element is standard offers. In the interest of commerciality, digital platform corporations may make standard offers to news businesses to reduce the time and cost associated with negotiations. If parties agree to a standard offer and notify the ACCC, they do not need to comply with bargaining and compulsory arbitration as per the code. This may prove particularly beneficial for digital platforms when dealing with smaller news businesses.
As a further protection for digital platforms, the code clarifies that they will not have to share data with news media providers. After the ACCC released its initial draft version, Google expressed concerns that they would have to give data to news media providers about how customers use Google services. The government took these concerns on board, and this bill clarifies that digital platforms will not have to share actual data on news interactions.
The purpose of this bill is really quite simple. It's to address the power imbalances between digital platforms and news media providers and to support the sustainability of the Australian news media sector. The bill comes off the back of the ACCC Digital Platforms Inquiry's final report, which found that digital platforms possess substantial bargaining power over news providers. With consumers—including everyone in this place, I'm sure—increasingly obtaining their news online, news media providers have struggled to develop viable alternative business models. At the same time, digital platforms have made billions through advertising and piggybacking off the hardworking news media providers seeking to deliver public interest journalism. What's more, according to Professor Tama Leaver of Curtin University, digital platforms such as Google and Facebook do not just link news content; they reframe it. They find, sort, create and present news content in a way that adds value for their users. What is at stake, if this unbridled trend continues, is democracy. A free and independent media is crucial to the functioning of a strong democracy. This should always be remembered and prioritised, just as this bill seeks to do.
We are already witnessing the pre-eminence of this bill in action before it is even passed. Google and Seven struck a deal on Monday, while Google and Nine signed a letter of intent today. Today, the chief executive of youth publisher Junkee Media, Neil Ackland, announced that they have signed a deal with Google, noting that his team are extremely pleased with the outcome. There are also media reports that the ABC and The Guardian Australia could finalise deals with Google sometime in the near future, although nothing is yet concrete.
If this mandatory code is adopted, Australia has the chance to be a world leader in addressing the bargaining power imbalances between digital platforms and news media providers. In so doing, we will become a beacon for democracies elsewhere who truly value a free and independent media. Despite the suggestions from digital platforms to the contrary, this code addresses this serious problem in a fair, flexible and commercially minded way. At its core, it is simply asking digital platforms to pay news media providers for using their content. That hardly seems controversial. I commend this bill to the House.
I acknowledge the member for Higgins and before her the member for Greenway. I especially acknowledge all of the work that the member for Greenway has done on behalf of the Labor opposition not just over the last few days or the last few weeks but for the full 18 months or so that this saga has dragged on. I acknowledge the member for Greenway's experience and judgement, as well as the consultation and all of the work that she has put into landing a position for us to support the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 which is before us in the House. I also acknowledge the members of the Labor Party on the Senate inquiry—Senator Gallacher and Senator McAllister—for the work that they did in examining the details in that short inquiry that the Senate undertook in order to hold up to the light what the government was proposing before this most recent set of amendments. I acknowledge them, too.
The ACCC and Rod Sims, in particular, made themselves available too so that we could educate ourselves and satisfy ourselves that some of the recommendations that the ACCC was making were consistent with what we saw as the relevant and appropriate objectives of the bill. I acknowledge as well, in the same way that the member for Greenway did, that there's been a lot of work from officials in the Treasury, the communications department, the ACCC and elsewhere, who would have also spent a lot of their time over the last 18 months working on this code and this legislation. And, finally, there are the stakeholders. The member for Greenway, in particular, but also I and my office have met with many, if not all, of the relevant stakeholders over the last little while, and we convey our thanks to the stakeholders for the way that they have engaged with the Labor opposition to help us come to a view. Our view is that we support the bill as amended by the government and before us today.
We have, since the very beginning, as you know, Deputy Speaker Georganas, offered our in-principle support for the objective that journalists should be paid for the content that they generate or create. That has been more or less our in-principle position for the duration of the long road that has led to this legislation. We've been quite responsible about it, and we've been constructive about it. Let's take, for example, what was a glaring omission in one of the original versions of what the government was proposing—that it wasn't proposing to pay the ABC or SBS for their content. That was a glaring omission, but the member for Greenway, the Leader of the Opposition and others fought very hard in the public discussion of these matters to ensure that the ABC and SBS were included. We were pleased when the government had a change of heart and included them. We didn't rub the government's nose in it that they'd got it wrong. They had got it wrong, and it's good to see those public broadcasters included. That, I think, is an illustration of the constructive role that we've played in the conversation about this bill. The code is an outcome from, really, a key recommendation of the ACCC, following their 18-months-long Digital Platforms Inquiry.
I think it also needs to be said that this was one of those instances where we had a yawning gap between what was being announced—what we were reading about the government on the front pages of our papers—and what was actually being delivered. I think it does need to be remembered that the Treasurer, in particular, was doing a lot of overpromising and underdelivering when it came to this legislation and this outcome. Many of us here have read, time and time again, the Treasurer say, over and over again, that this would all be done and dusted in 2020—that it would all be fixed, last year. Clearly, the fact that we are here in the middle of February and still debating this legislation shows, once again, what has been a serial problem with the government of those opposite, which is that there's a lot of announcement but not quite enough delivery. I think the delay in getting to this point is another illustration of that.
The issue around the delay is not just a point about the politics of this bill, but I know, from talking to stakeholders—and the member for Greenway knows, from speaking with stakeholders—that that delay created a heap of uncertainty in the business community and the wider community about where this was all headed. We all saw the various threats made and other things in more recent times. But the truth is: for some months now, the fact that this had not been landed didn't just create uncertainty for the big players here, though it did do that; it also created uncertainty for small business, who weren't quite sure what the landscape that they would be operating in was going to look like.
Also, of course, the delay has meant a delay in revenue to some of these media organisations. That's in addition to the concerns raised by small businesses, small media outlets, citizens and consumers about the impact of the bill. The Senate inquiry went to some of those, but there's been a public discussion of them as well. I think that one of the reasons why there's that 12 month review built into the legislation we're talking about today is that, in many cases, there are still questions to be answered about the operation of this—about what's happening here. There are still legitimate concerns that people have. There's a review there in 12 months, but I think it's also incumbent on the government not just to think that, when this bill goes through the House of Representatives—as it will this week, I'm assuming—that's the end of it. There are still concerns that need to be addressed. There are still questions that need to be answered. That will be a role for the review in 12 months time but before then as well, because we want people to have confidence in the operation of the code and the legislation that sits behind it as a backstop to all of these deals that are being struck between media organisations and the platforms.
More broadly, if we take a step back from the detail of this legislation, what we're really trying to do here is to make sure that Australians get the best kind of media that's possible. The media and the digital economy are obviously absolutely crucial components of a modern, functioning economy but also of a modern functioning society. We want to get it as right as we can, and we want that to mean a strong and diverse media sector. We want a really diverse, forward-looking and innovative digital technology sector. Clearly, those two things are linked in obvious ways in this area, but, more broadly, if you think about the future of this economy, and you think about digitisation and the digital economy, the news media and all of the ways that those have been changing at such a rapid rate, then we need to get this bang-on. We need to get this as right as we can.
Part of that is recognising that, even with the passage of this legislation, there is still a lot of work to be done when it comes to improving the media landscape. It's still not diverse enough; we've got issues there. We've still got issues around empowering and resourcing smaller outlets. We still have issues around the ABC and its funding. All of these sorts of things are not necessarily entirely fixed by what the government is proposing here with the code and the legislation. We do need to recognise that. That's one of the reasons why the second reading amendment moved by the member for Greenway and seconded by the member for Chifley is so important, because another thing which is not addressed here, but is a real issue in our media landscape, is the resourcing of the AAP Newswire, for example. So the amendment goes to some of those issues, and that's an example of the sort of thing that is unaddressed by what we're doing here. If we care about diversity and care about giving people access to quality, impartial journalism, we need to care about things like the AAP Newswire.
The decline of public interest journalism in recent years is of great concern to us on this side of the House and also, I believe, to the community more broadly. There are worrying stats about what is happening in our media environment, and that's why we want to be sure that, when the government passes this legislation and when the media organisations and the tech platforms are doing their deals, we recognise that there is more that needs to be done. There are still questions to be answered. But, in the interim, our vote in this place will give effect to the in-principle position we've had since the beginning, which is that journalists should be paid for their content. Ideally, there will be arrangements between the platforms and the media organisations, and there is a role for legislation sitting behind that, in the event that those deals prove unsatisfactory or unworkable.
I will just talk to the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020. This is obviously a bill that is dealing with an industry that is very dynamic, with a lot of issues to deal with and a lot of things to talk about and keep up with, in some cases. The world often moves a lot more quickly than we can keep up with in this place with legislation.
The bill is obviously establishing a mandatory code of conduct to address the bargaining power imbalances between digital platform services and Australian news businesses. However, it does not preclude parties from undertaking commercial negotiations or reaching deals outside the code. The bill establishes a framework to empower the minister to designate certain digital platforms and services with significant bargaining power and to empower the ACMA to register certain news media businesses with annual revenue of over $150,000 which have the primary purpose of creating and publishing core news and which operate predominantly in and for Australia.
It also brings the parties within a negotiate-arbitrate model that allows parties to bargain in good faith and reach binding agreements or access an independent arbiter to determine remuneration under final offer arbitration, should the parties be unable to reach agreement. It also enables digital platforms to publish standard offers which provide smaller news media businesses with a pathway to finalise agreements and set minimum standards for digital platforms, including requiring 14 days advance notice of algorithm changes that impact news media businesses. Digital platforms can be brought into the code if there is sufficient evidence to establish that they give rise to a bargaining power imbalance, and the code will be reviewed within one year of commencement of the bill.
As I said, there is certainly a lot to talk about in this industry. This is an important bill that we discuss here, and I commend the bill.
Labor has offered in-principle support for a workable code in this industry from the outset, and we're supporting this bill, the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020, as amended. Yet there remains a great deal of uncertainty about the future designation of platforms and services, which remains a matter of ministerial discretion. Not all Australian news media businesses have struck commercial deals with digital platforms, and the passage of the bill may impact on their relative negotiation position with digital platforms. It's not clear how the Morrison government will achieve the intention of levelling the bargaining position between news media and digital platforms if the negotiation or arbitration provisions of this bill do not apply. For this reason, Labor recommends that the government use precise language in public statements regarding what designations it intends to make under the code. This is in order to save any misunderstanding or unnecessary uncertainty for the media, digital platforms, small businesses, citizens and consumers who may be impacted. Labor welcomes progress to address the imbalance in bargaining power between the news media and digital platforms. We've always ensured that the focus remains on maintaining extensive public interest journalism in Australia.
There is broad in-principle support for a code and regulation of digital platforms. We note that stakeholders such as the Media, Entertainment & Arts Alliance have welcomed the reported deals between Google and Nine Entertainment and Seven West Media. But the MEAA says the parliament must proceed with the bargaining code legislation to ensure all regional operators, including AAP, regional and local organisations and others, regardless of their size, are compensated by digital platforms for the use of their content.
Prior to that latest development, many stakeholders had expressed serious and specific concerns with the bill, as drafted. Google and other platforms, such as Facebook, have said they're willing to pay for news content, but the question, of course, has always been about the mechanism. And it wasn't just Google and Facebook voicing their concerns. A range of other stakeholders had issues with this bill, including peak business bodies such as the Business Council of Australia, Ai Group, peak media bodies, Free TV, the Press Council and many others.
It has been Labor's clear view that it's the government's job to get this right—to make sure that there is a workable code—and to find a way to support Australian media without undermining Australia's digital economy and, importantly, without undermining many of the businesses that rely on the digital economy to trade and promote their businesses using platforms such as Google and Facebook. And it has been Labor's view that the government should give credible responses to the concerns and the issues that have been raised by stakeholders about that. We've extended constructive in-principle support while the government has been signalling and considering amendments to its own bill in consultation with the digital platforms and media. We've been of the view that it's for the government to ensure that a bill of such consequence, in a negotiation context, be ready to be debated in parliament. Labor has been waiting for the government to reveal its amendments to the legislation for weeks now. The Morrison government describes these amendments as 'a number of clarifications and technical amendments'. Since the bill was introduced, the government has made quite a spectacle of the so-called threats made by digital platforms. Yet, at the end of the day, it would appear that the resolution of the issues required just 'a number of technical amendments'. There have been varying reports as to whether the government have caved in or backed down or whether they are simply making some minor changes.
At all times Labor has been outcomes focused. The code is about ensuring the sustainability of public interest journalism and the importance of the fourth estate in shining a light on the ongoing disruption the news media has experienced, over decades, to its traditional business models and also in response to the impact of the market power of the digital platforms. Ultimately, this has to be about the healthy functioning of our democracy. Given the impact of this legislation on media businesses, digital platforms, small businesses and consumers, the government should have had its ducks all in a row. The government should have circulated its amendments much earlier than it did to end the uncertainty around levelling the playing field between news media and digital platforms.
Of course, the code is only one suite of measures recommended by the ACCC to support public interest journalism in Australia. In the time since the ACCC released the final report of the Digital Platforms Inquiry in July 2019, the Morrison government has failed to address a number of those important recommendations, including genuine media reform, stable and adequate funding of public broadcasters, adequate direct funding, tax incentives, and philanthropy measures. The government must do more to support public interest journalism in Australia, and that is why I think there is scepticism about whether this code will work.
Many are saying they don't believe that the code is going to result in more diversity in our media, in more journalists being employed or in a strengthening of our democracy through the notion of freedom of speech and through the media highlighting the importance of what goes on in government and the decisions that are made by government. It's important that the government understand that that scepticism is born out of the fact that this government's approach to regulation of the media in Australia has resulted in a contraction of the diversity that we've had in our media organisations. That is not good for Australian democracy. The changes that the Turnbull government made to cross-media ownership laws have resulted in a number of big media players buying up smaller players and reducing the diversity of voices that is crucially important to a healthy democracy and to the strength of media diversity. There is nothing in this code or in the government's response to the ACCC recommendations that provides any support for growing media diversity in Australia.
The second point I'd like to make is that many have used this code as a means of promoting the notion of public interest journalism and media businesses being able to afford to do their jobs and, ultimately, to hire more journalists to report on the news cycle and the happenings particularly of government at all levels in this country. It's my hope that that will be the outcome of this particular code—that it will result in more journalists being employed by media organisations—but I see no mechanism in this code for that to occur. I think there should be some mechanism to ensure transparency around the funds that go from these digital platforms in paying the bigger news outlets in Australia. There needs to be some reporting by those news outlets of what that money is being spent on and whether or not it's resulting in more journalists being employed in Australia, which is crucially important to diversity and to increasing the views and strengthening Australian democracy.
Another point I'd like to make in respect of the code, one that has been raised in the Senate inquiry on a number of occasions, is the notion of the risk to the Commonwealth from court proceedings, following the introduction of this legislation. Treasury has raised concerns that the legislation, as drafted, contains some critical weaknesses, enough to expose the Commonwealth to the risk of litigation and failure in what may be protracted legal proceedings. These concerns relate to the minister's ability to designate and to make a determination that there is a bargaining power imbalance between Australian news businesses and a group comprised of the corporation and all its related bodies corporate. In making that determination under this code, the minister must consider any reports or advice of the ACCC. In paragraph 2.10 of the explanatory memorandum to the bill, Treasury notes:
The Code has been constructed to minimise the potential for successful legal challenge under the Australian law. Nevertheless, it is possible that, for example, decisions by the Treasurer to designate digital platforms could be subject to legal challenge.
That's from the explanatory notes to the code, and it's a pretty damning indictment of the possibility that the Commonwealth is opening itself up to legal challenge through the minister's ability to designate those media organisations under the code. That remains a risk to the Commonwealth, and I don't think it has been adequately dealt with by this government.
So, whilst we welcome the passage of this bill, whilst we are certainly keen to see a rebalancing of the power between digital platforms and news outlets, we want to make sure that this code works and that it doesn't result in the Commonwealth being prosecuted because of those issues associated with the Treasurer being able to designate a particular body and a bargaining imbalance under the code. We want to see that there is a greater diversity in the Australian media and that more public interest journalism is promoted in this country. But there is scepticism, and rightfully so, about whether that will be the outcome from this particular bill.
That is why the shadow minister has moved that second reading amendment—to make sure that in the future the government keeps an eye on these things and we don't end up, as we have in the past under this Liberal government, with further concentration of our media, a lack of diversity and an undermining of the importance of the fourth estate and journalism critical to our democracy.
This is an important piece of legislation. Indeed, it is an historic piece of legislation and it's one that much of the world is watching quite closely. The issues that we're seeking to grapple with here in this parliament are issues that the whole world is grappling with, and these are really about the ubiquity, dominance and indispensability of big tech in our lives these days and how government must respond to regulate elements of big tech's behaviour to ensure that they continue to provide public benefit but also protect the public from harm. This is just one element of the public policy challenge we all face, but it's quite an important one.
The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 responds to the key findings of the Digital Platforms Inquiry. As members here would know, the main thrust of the conclusions of that inquiry was that a bargaining power imbalance exists between digital platforms and Australian news media businesses. That's a commonsense conclusion that I think any ordinary person in the street would quite readily recognise to be the case.
It's an interesting story, because these digital platforms have almost emerged from nowhere. Fifteen years ago, or less even, companies such as Facebook, Google and, indeed, Amazon were scrappy start-ups. They were the disrupters of traditional industries and businesses. But these days such companies, not only in size, market capitalisation and corporate power but in terms of their dominance in our lives, are the behemoths of today.
It wouldn't surprise you to know that, as a Liberal, I believe, generally speaking, in the principle of noninterference in functioning marketplaces and particularly that commercial organisations should be left to compete on fair terms and reach commercial deals at arm's length and without government interference. Provided they are not violating any laws or causing any harm to consumers, the private sector and the commercial world should, by and large, be left to their own devices. But there are certain situations well recognised in competition law where markets do not function perfectly, particularly because of a monopolistic market structure, an oligopolistic market structure, where there is an asymmetry of information, where the barriers to entry are high, where competition might be limited because of the dominance of a few key sectoral players. It's well recognised on both sides of politics that in that sort of case, in the case of a demonstrated market failure or suboptimal market functioning, there is a role for government intervention. I think that's very much the point we've reached today.
Digital platform entities such as Google, Facebook and Amazon are really the railroads and utilities of our day. What railroads and utilities were to the early 20th century, these platforms are to the early 21st century. They are the medium not only through which we communicate but through which we conduct commerce, consume entertainment and consume news and journalism. In many senses, they're an indispensable part of our everyday lives. That's particularly true in advanced economies, such as Australia, but I think it's also true in much of the Western world and, increasingly, in the developing world as well.
The traditional news media has come under a number of competitive pressures in recent years. News media traditionally relied upon classified advertising to form the backbone of its revenue and the backbone of its business model, and classified advertising really underwrote newsrooms, journalism, printing costs and everything else. In many instances, for print journalism, as much as 90 per cent of their revenue came from classifieds, and classified advertising has been disrupted. It's been disrupted in a number of ways. If you look for a job in Australia these days, you might go to Seek. If you're looking to buy a car, you might go to carsales. If you're looking to trade something second hand, you might go to Gumtree. All of these verticals have been taken from traditional print media. And they haven't necessarily all gone to Google or Facebook or Amazon, the big tech companies; they've gone to many other well-established and successful technology companies that have taken a chunk of this business and found a way to make money from it.
The news media here is not unique, in any respect. If you think of the music industry, this was disrupted from the late 1990s onwards first by Napster and then by entities like iTunes, where the consumption of songs was unbundled from albums and record producers so that people could purchase or listen to individual songs and it became disaggregated. So people now, by and large, listen to music on demand through platforms like Spotify and iTunes. Music has been through this sort of disruption.
At the moment, credit cards are going through a disruption with the buy-now pay-later industry. We see a generational divide here in Australia and elsewhere, where younger consumers tend to steer clear of traditional credit products, particularly for daily and discretionary consumption. They're increasingly using products like Afterpay and Zip, which are buy-now pay-later products. These are disrupting the credit card model, which has been a huge profit source for the big four banks in Australia over a number of years.
Today we've got broadcast and cable TV being disrupted by on-demand and streaming services, be it Netflix, be it Stan, be it Disney—any number of things. I have, at least, three or four going in my home, as I'm sure many of you do. There are any number of sectors being transformed by the digital disruption that these platforms allow to happen, and, in many respects, I think this disruption is a good thing. It's improving value for consumers. It's giving consumers greater choice. In many respects, it's allowing people who would otherwise not be able to reach a marketplace to find a marketplace for whatever it is they're producing. It's lowering barriers to entry to many businesses. We need to recognise, as in the history of much of our modern economy, that things change, and when things change it can be threatening and disruptive to people. But, generally speaking, over the course of our modern history, it's been for the betterment of consumers and citizens.
In this new world there is a place for quality print journalism and, increasingly, consumers are prepared to pay for quality print journalism. Generally speaking, that hasn't been the model throughout the world because classifieds and advertising revenue underwrote it and consumers didn't really need to pay much for the product. But we've seen around the world that traditional print businesses have been able to adapt and pivot and innovate and find a new way to monetise what they're producing. You see it with The New York Times, for instance, which has now built a very successful subscription model in which users pay for the content and quite happily do so. The New York Times continues to employ journalists and continues to produce good-quality journalism. The Financial Times and The Economist are the same. The challenge here is that you do need to change your business model and you do need to find a way to change consumers' behaviours and monetise the product that you're producing. But I do still believe, fundamentally, that there is a demand amongst the Australian public for quality print journalism.
Through all this legislation it's important to note that we are not seeking to protect print journalism from competition. I don't think that would be the right thing to do. We're not seeking to restrain innovation. Again, I don't think that would be the right thing to do. We're not seeking to prevent disruption, disruptive as it might be. As I said, overwhelmingly, that's been a force for good for consumers and for citizens. But what we are seeking to do with this legislation is level the playing field—I think that's the best way to describe it—for commercial deals to be reached between the digital tech platforms and news media organisations.
It's clear, and I think people know this, that there is a two-way value exchange that goes between digital platforms and the news media. Digital platforms get value from being able to host news media content, so if people want to find some news they'll use the digital platform to search for whatever it might be. It might be traffic congestion on a road near their home. It might be a local development. It might be opening hours or a new restaurant that's opened. Often the digital platforms gain value from their ubiquity that this allows them to provide that they become a one-stop shop, if you like, for people searching for information. But the news organisations also extract value from this, because it's a lead generation service—and businesses find this as well. People who might find an article, for instance, in TheSydney Morning Herald through Google will click through to that link. The Sydney Morning Herald has their eyeballs, so to speak, and is able to show them advertising. It's able to put the article behind a paywall, if it wants to. It's able to encourage consumers to subscribe to the SMH and any number of things, so there is a benefit that the digital platforms give to the news media. I think the experience so far of the imbalance of bargaining power that exists between news media outlets, particularly the smaller ones in Australia—small by global standards—and the digital platforms means that this value is not being realised, that people are not able to reach commercial deals to allow them to extract or exploit this inherent value.
I don't think this is an easy area of public policy, but I believe in this instance we've struck the right balance. What we're seeking to do through this legislation is to establish a code of conduct for news media businesses and for digital platforms. What the legislation will allow is for the Treasurer to determine that a digital platform is subject to the code, which means it will be bound by the code, on advice from the ACCC and Treasury that a significant bargaining power imbalance exists. The Australian Communications and Media Authority, or ACMA, will be able to assess the eligibility of Australian news media businesses to participate in this code, and then the legislation puts in place a framework that encourages commercial agreements to be reached between these entities—between the digital platforms and the news media businesses. Not only does the framework allow commercial agreements to be reached between these entities outside the legislation; it in fact encourages entities to do so because of some of the consequences if an agreement is not reached. If an agreement is reached on commercial terms by these organisations and consenting parties and not corrupted by a bargaining power imbalance, those agreements can stand. I've been encouraged in recent days to see that, according to media reports, deals have been reached between Google and Seven West and I believe with Nine and Fairfax as well, which is exactly what we'd like to see happen—commercial deals reached between entities on the basis of fair market principles.
The legislation also puts in place a series of safeguards that if no agreement is reached—and it's our view that if no agreement can be reached it's probably due to the imbalance of bargaining power between the sides—then a party can seek to trigger the code and that will trigger a number of things. It will trigger minimum standard obligations about how a digital platform must treat the news media business. It triggers a requirement for the parties to engage in good faith bargaining to reach an agreement and it also contains a provision for final offer arbitration, which would allow an independent party to force the parties to accept certain terms on the basis of final offer arbitration or baseball arbitration.
It will be the ACCC, the Australian Competition and Consumer Commission, that will be responsible for enforcing the code, and the operation will be reviewed by Treasury after one year. Recent changes announced just yesterday by the Treasurer and the minister for communications go some way to alleviating some of the concerns that digital platforms have about their own business model, particularly a lessened requirement for advance notice of algorithm changes which I accept is a legitimate interest they have.
As I said, I think this is quite a difficult area of public policy, or certainly not an easy area of public policy. Jurisdictions around the world are grappling with these questions about digital platforms, which, in many respects, have transformed people's lives for the better by allowing them to be better connected; by allowing them to share information more readily; by allowing them to access markets, if they're producers, more readily; and by allowing them to know what's going on around the world more readily. How do we ensure that those sorts of benefits are maintained but that some of the harm that we've seen that's come from the ubiquity and dominance of these platforms is mitigated or constrained?
This is one element, of course: the commercial harm that's being caused to a particular sector of the economy—but one that has an outsized importance in our democracy because, as the previous speaker, the member for Kingsford Smith, said, the fourth estate has a critical role in holding power to account and scrutinising the actions of the executive and the legislature too, which improves the quality of our decision-making and our democracy. But another element is making sure that platforms are not doing things like hosting content that causes deeply divisive social harm, be it incitement, be it violent or abhorrent material, or be it propagating falsehoods and misinformation or being used as a vector for foreign interference by big state actors.
With all that in mind, I commend this legislation to the House.
It is with some anticipation that I have been waiting to speak on this bill, the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020. Indeed, it is with some anticipation that I have been waiting to see the government's amendments to this bill, which have been hotly sought by stakeholders throughout both the media and the technology sectors.
The bill before the House today establishes a mandatory code of conduct to address bargaining power imbalances between digital platform services and Australian news businesses. It's a significant bill that grapples with big issues. It's a high-stakes bill.
A strong, high-quality and diverse news media sector is essential to a healthy democracy in Australia, and we are all familiar with the challenges that, with the rise of the internet, have arisen for existing media entities and organisations. We've seen a disintermediation caused by the emergence of the internet in print journalism and broadcast journalism. What this has done is it has unbundled the journalistic model that we've relied on for our democracy, really since the mid-19th century. An independent mass media in Western democracies has only been possible because it has been supported by classified advertising and broadsheet advertising in these media outlets. That has been the model. Before that, there was a mass media—in the United Kingdom, interestingly enough—but it was a partisan mass media. It was a mass media that was directly funded by partisan interests: by capital interests on one side and largely by the trade union movement on the other side. That was the dominant model through the 19th century, until we got to this emergence of advertising-funded media. It was the advertising that gave the editorial independence that created the media that we rely on as a trusted part of our democracy.
Now, I am a geek. I love my technology. There's not a new gadget that comes on the market that I'm not at the front of the queue to purchase. But unfortunately what has happened when the internet has hit the media sector is that it has unbundled those revenue sources from the journalism. In the past, when you were trying to buy a second-hand car, you might pick up the classifieds of The Age; now you go to carsales.com. If you're looking for a new property, you don't so much go to the broadsheet advertising or the property insert of the newspaper; you might go to realestate.com.
So there are these disintermediated, unbundled services that have been providing advertising in the past. Increasingly, you see social media platforms providing these advertising services as well—direct advertising through Google Search, for example, or on Facebook. It has totally disrupted the business model that the media we rely on in our democracy has used to produce the independent media that we need. This bill attempts to redress that. Some of the solutions that it proposes, I concede, are not elegant; they're heavily contested, but the upshot is that this code is intended to direct revenue from these new media platforms to the independent journalism, the public interest journalism, that we rely on in a democratic country.
I've seen some people in the technology sector object to this. There's a bit of a trope going around that this bill reflects something along the lines of horse carriage manufacturers seeking to tax automobile manufacturers in order to protect their business. I just really want to emphasise, as one geek to another, that that's not what this bill is about. This is not about one product of the past trying to hold back the onset of a new product replacing it. Unfortunately, while the internet and while these social media platforms have obliterated the historic business models of an independent media, they haven't replaced the public interest journalism that we desperately need in our democracy, and it is entirely appropriate for government to intervene in order to ensure that public interest journalism, independent editorial journalism, remains. Similarly, it is entirely appropriate that government intervenes when we have services that have emerged that have a dominant market power. I used to be a trade practice lawyer; I used to be a competition lawyer. It's entirely normal for government to intervene in these situations.
This bill, similarly, raised a very significant point that we've seen in the discussion leading up to this bill about democratic sovereignty. As the member for Wentworth was discussing earlier in his contribution, these social media platforms—Facebook, Google—are so dominant that they are reshaping our society, not just business models, not just the way things are bought and sold in our world but really the way we engage with each other. They're reshaping our society, and it's crucial, given the influence of these platforms, that the rules on these platforms are set by democratic governments, not by unaccountable corporations, which, sadly, from our position in Australia, are generally based in other jurisdictions. We've seen the kinds of harms that these platforms enabled. I want to emphasise that these are not neutral platforms; these are not platforms that simply exist to convey information neutrally. These platforms exist to make money for their founders. Good luck to them, but democratic countries, democratic societies, are going to have a say in that process. If the algorithms on these platforms are destructive to democracy, governments are going to have a say. If they facilitate foreign interference, governments are going to have a say. If they facilitate violent extremism and hate speech, governments are going to have a say. And, if they destabilise an incredibly important institution of our democracy and independent media, governments are going to have a say.
We've seen some standoffs between social media platforms and the government during the process of this debate, and I don't want to go into the details of the differences there, but I do want to say that, as a fundamental principle, the Australian democratically elected governments will govern and make rules for the way social media platforms operate in Australia regardless of where they are based. Social media platforms are not bigger than democratic governments. That is an important principle for all of us. This being said, I certainly have no desire for these standoffs to reach the point where we have technology platforms exiting Australia. That is not a good outcome—it's not a good outcome for the Australian technology sector and it's not a good outcome for Australians that use and enjoy these services. So, my view, Labor's view, throughout this process is that it's on the government to strike a balance between these interests and to deliver a workable code, a code that ensures revenue recompense is provided by social media platforms to news media in exchange for the value that they provide, while also ensuring the continued operation of those platforms in Australia.
That's why Labor has always been clear to say that we would support a workable code. Indeed, we've recognised the need for government to intervene to address a bargaining power imbalance between news media businesses and the platforms for, frankly, longer than the government has. We called for the ACCC review and the reform to the media landscape that led to this code well before they were initiated by the government and established. We've offered our in-principle support to the government throughout this process.
The code before the House now is a key recommendation of the ACCC, following the 18-month-long Digital Platforms Inquiry. Labor has offered not just in-principle support but constructive support for a workable code since the government announced its intention to introduce a mandatory code in April 2020. Let's be frank here: I think the government overestimated its abilities somewhat and underestimated the complexity of balancing the various equities being dealt with in this bill. The government said that it would have the mandatory code implemented shortly after the draft code was released in July 2020. Well, it's only now before the parliament for debate, eight months later.
Labor is disappointed with this delay, and with the uncertainty that has accompanied it—for media operators, for the social media platforms and for all Australians who rely on those services. This delay, not to put too fine a point on it, has delayed the delivery of much-needed revenue to public interest journalism in Australia, and that's not good for anyone. That's not a welcome outcome for anyone.
Labor broadly supports the provisions of this bill, although we will have some questions in the consideration-in-detail process. We want to get some answers. I just want to make one point here. The bill establishes a framework, the mandatory code, that empowers a minister to designate certain digital platforms or services, the ones with significant bargaining power, and empower regulators to register certain news media businesses in order to bring those parties within a negotiate-arbitrate model. This model allows the parties to bargain in good faith, reach binding agreements or, if this fails, access an independent arbitrator to determine remuneration under final-offer arbitration should the parties be unable to reach an agreement. Tragically, for my sins, I was a telecommunications lawyer in a previous life and I have very significant experience with access-arbitrate models and access regulation. It's not fun and it's not efficient. It is notable that this bill enables parties to reach commercial deals outside the code and that these will be respected by the code. The shadow of the code encourages parties to do that to avoid the pain and suffering of that negotiate-arbitrate model, which, frankly, I don't think any party enjoys being a part of.
It's been encouraging this week to see deals start to be struck between Google and its Showcase product and Seven and Nine. This is a good thing. This is the intended operation of the code. When Labor said that we would support a workable code, these are the kinds of outcomes that we wanted to see—parties getting together and agreeing commercial agreements. The terms of these agreements aren't public, but no doubt the things that they emphasise will differ from party to party. They'll put a different weighting on different benefits and certain non-price terms, and that's the way we want things to work.
We have seen these agreements between the commercial broadcasters and Google. Hopefully we'll start seeing some deals with Facebook as well. But I am particularly waiting to see deals with the ABC. Through this process, Labor has made it clear that if the objective of this code is to support public interest journalism and the crucial role that it plays in our society then this should be something that the ABC is a part of as well. As these arrangements are being negotiated, I do want to see the ABC getting value—and when we say the ABC, that is the taxpayer—for the public interest journalism that it distributes on these platforms. I'm sure that it's coming, that it's in the mail, that they are negotiating, but Labor put down markers very early on in the process. I recognise that the government has agreed with those suggestions and incorporated the potential for the public broadcaster's involvement—and not just the ABC but SBS as well. I am looking forward to those commercial negotiations being made because frankly that's what this bill is about; it's about the future of our democracy, and it's something that I'm really concerned about at the moment.
Australia's information system, the system that we use to distribute information that informs our democracy, is really sick at the moment. Every MP in this chamber will have the personal experience of engaging on social media platforms as a public figure. It is not Habermas's public sphere. It is not an Austrian coffee shop where people are debating matters of high principle. It's not serving our democracy well, the status quo, and any solution for improving the quality of our information system relies on a healthy independent media; they're foundational. They drive us mad in this chamber, and I could spend the whole of my speech at this dispatch box picking nits and criticising journalists for the way they do their job, but jeez we need them not just as politicians but as citizens. Recent events in the United States have reminded all of us that we need to treat our democracy better because there are always consequences when we neglect it and when we undermine it. Eventually a bill comes due. Bills like this make a positive contribution, and I welcome it.
I'm pleased to rise this evening to speak on the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020. This is a most interesting piece of legislation which reflects the change in the media environment that we are facing. Fundamentally, the argument that some of these large social media companies should pay other media organisations for content has to be based on standard intellectual property law and it simply has to be based on a copyright provision. I know that many times when things have been posted, whether it's a cartoon or a picture or a news article, I've thought that there is, in some way, an infringement of that creator's copyright by that being posted upon one of these digital platforms. The principle that we have for this legislation is sound. It is based upon the recognition that an original creator of content should be compensated for their work and have their work, that would otherwise be protected by copyright legislation, protected.
However, having said that, one of the great issues that we have goes to freedom of speech when it comes to these large social media companies, and about what they should allow on their platform and where they should draw the line about what should be blocked. This is where I have some significant concerns—
An opposition member interjecting—
I take the interjection from the helpful member across the chamber. It is correct, that as I stand here, I am—I think—the first person in this federal parliament that has actually been banned from posting things to Facebook. Some people may disagree with what I've been posting; I'm sure some people do. The fact is, we would hope that those on the other side of the chamber may agree with the concept that I may disagree with what you say, but I'll defend to my death your right to say it. It is the importance of freedom of speech that we should protect here and not be so flippant about it. It was one of Australia's greatest ever Prime Ministers, Sir Robert Menzies, who said:
… today's truth is frequently tomorrow's error. There is nothing absolute about the truth … if truth is to emerge and in the long run be triumphant, the process of free debate—the untrammelled clash of opinion—must go on.
In terms of these social media platforms, I've heard it said that anything posted contrary to World Health Organization advice should be taken down. But the problem with that is that we've had advice from the World Health Organization during this pandemic that has changed 180 degrees. Originally, we had the World Health Organization saying that masks were not necessary. That was the original advice. If someone had posted that the World Health Organization is incorrect and you can protect yourself from coronavirus by wearing a mask, at the start of the pandemic, that would have been ruled by these social media giants as misinformation and taken down. Yet now it's commonly accepted wisdom. Similarly, when we in Australia first decided that we would ban flights from China, the World Health Organization at that stage said there was no need to ban flights from China, from Wuhan Province. They said that was not needed. If someone had gone to a social media platform to argue the case that, because of the scale of the infections in China, especially in Wuhan Province, we should stop flights, that would have been contrary to World Health Organization advice. It would have been taken down, and that debate wouldn't have gone on. Now we see, to use Menzies's words, that what was today's truth was tomorrow's error. The truth that the World Health Organization once said we know now was error. That's why we are on a very slippery slope when we have people from these social media giants being the arbiters of truth and of what can and cannot be posted.
In my case, I have been banned because of four posts out of over 1,000 posts I posted in recent months. One of those posts was nothing more than an article that I had copied and pasted from The Spectator magazine—a credible magazine that is available online and is available in every newsagent in this country, that you can go and buy—written by a highly credentialed and credible journalist about Australia's Professor Tom Borody. In that speech, Professor Borody recommended ivermectin as a treatment for COVID. Facebook have ruled that as dangerous misinformation and had to remove that post and give it as the reason I should be banned. Yet what Professor Borody wrote is accepted by health authorities in many countries around the world. If I were in India in the state of West Bengal, in their official recommendations about how they should treat COVID is what Professor Borody recommends, yet here we have Facebook deciding that this was dangerous misinformation. What is dangerous about this is someone from one of these social media giants deciding that that issue should not be debated or should not be publicly discussed. If Professor Borody is wrong, the way to do that is not to censor him and to cancel his views, but to do it with an opposing point of view. Argue the facts. That is the way we get the best result in a society.
The second post that they decided must be 'taken down' was again a direct quote from a professor of immunology out of Ireland, Professor Dolores Cahill, talking about vitamin D, hydroxychloroquine and zinc. Recent studies show that Professor Cahill is most likely 100 per cent correct. So, again, the real danger is not the views themselves but the censoring of these views. The third one was again a direct cut and paste from a Dr Hodkinson in Canada. Yes, he did express views that were contrary to the current accepted wisdom of the World Health Organization, but who is to say that he is wrong and the World Health Organization is right when we have seen example after example of the World Health Organization changing their position 180 degrees.
The fourth example is that I put on my Facebook page a German study on mask wearing by children. That study found—beyond all reasonable doubt—that forcing young children to wear masks caused them significant psychological and physical harm. Causing children psychological and physical harm is, in itself, a definition of child abuse. The World Health Organization themselves say that when you make a recommendation or a government makes a decision on whether masks should be compulsory for children between six and 12 years of age, you have to consider those sociological and psychological facts. That is exactly what this study does.
I don't know if the conclusions of that study are 100 per cent right, but we must be free to debate these issues. If we're not, this is a very dark day for freedom of speech. I may be banned today—and it may be my colleagues next week or next month or next year or next decade who are banned because they may have a point of view that is contrary, at that time, to accepted common wisdom—but we have to remember that every single bit of progress we have made in our society, over the last several hundred ideas, has come about because someone has said the accepted wisdom of doing something is wrong and there's a better way of doing it.
That is why we must protect freedom of speech. We know from our history how important it is. I would hope that as we develop the legislation—and there'll be more legislation required to govern the impact of these large social media organisations that are developing almost a monopoly position in the marketplace—we do so in a way that, if they are going to have that position in our society, guarantees and protects freedom of speech. We must protect the clash of ideas. We must protect open and free debate, because, at the moment, the social media companies are failing to do so. And that may well require further government intervention down the track. I thank the House.
If we need an example of why public interest journalism in this country is so important, that contribution from the member of Hughes illustrates the point. The member for Hughes thinks his Facebook posts are equal to journalism. They're not. The fact is, he is selective. He is selective in what he chooses to post, and Facebook and the other social media giants are not journalism. This is why it is so important that we protect and nurture public interest journalism. Journalism is curated information. It's written by experts who know how to gather and put together facts, and do research and present that to the public. That is what is so important.
That goes to the shadow minister's amendments as part of this bill. Labor is supporting this bill. We do have some questions about it. The key reason we're supporting this bill is the incredible contribution that journalism makes to this country. As we've seen with the internet, over the past 30 years it has absolutely demolished the business case for journalism in this country. What we've seen is that the old advertising models have been smashed. Journalism previously survived and thrived, in fact, from private media organisations selling advertisements to companies that then paid the wages of journalists. The journalists provided the service of news which readers wanted to access, and advertisers bought the eyeballs of all the readers who wanted to read that news. The internet's come along and now advertisers don't need news media; they go on seek.com to look for jobs or realestate.com to look for real estate. Those so-called rivers of gold, the classifieds, in the newspapers have just dried up.
The model for funding journalism in Australia has pretty much been demolished. The internet giants have benefited and they continue to benefit. A lot of the searches people make are looking for information. That information is still provided by the traditional news media organisations, but they are getting less and less revenue and less and less profit, while the profits of the internet giants have increased. That's the reason we have this bill before us, which is essentially to give journalists and media companies their fair share.
It's not without limitations. We've made the point, for example, about AAP. There's not quite enough being done there. The government has a lot more to do to support public interest journalism in Australia. This includes support to ensure the ongoing viability of the Australian Associated Press, which of course is the key wholesale provider of news in Australia and has been a critical pillar of media diversity—and I'll get to media diversity a bit later.
Labor emphasises the evidence that the code does nothing to help AAP Newswire and that any notion of trickle-down economics under the code is naive. Labor drew the plight of AAP to the government's attention in March last year, including through Senate estimates. We called on the government to provide COVID relief funding in April last year. In September last year, the announcement of $5 million for AAP was late and inadequate. The benefits to democracy of an independent wholesale newswire business are many. What AAP does is: journalists go around, they get the news and that journalism is then bought by various news companies to go into their papers. It's an effective and efficient way to get news out. We think AAP needs much more support. It used to be funded by the news media companies themselves. That hopefully will continue, but I would make the argument—and I must stress I'm speaking for myself—that AAP needs some pretty direct support.
Data collected by the Australian Competition and Consumer Commission shows that, between 2008 and 2018, 106 local and regional newspaper title around Australia closed. That represents a net 15 per cent decrease in the number of these publications. It's left 21 local government areas previously covered by these titles with no coverage at all from any single local newspaper in either print or online formats. So people in those communities, hungry for news, hungry for local news, have no option but to go to social media where perhaps little local sites spring up or, heaven forbid, they might come across the member for Hughes's site and think that's news. That's dangerous for democracy in this country.
The number of contractions in Australia's public interest news landscape has now grown to more than 200. The business case for print journalism has been absolutely smashed. Despite having decades of TV journalism in Australia—and I should declare an interest here: I'm a former print journalist—it is still print journalism that drives the news agenda. It's the print journos who go out there, get the scoops, get the news and come out with the morning paper. The TV news directors for the 6 pm bulletin that evening generally still look at what the major dailies have on the front page, and that will generally lead the news agenda for their evening news. So print journalism, despite the incredible pressures on it, still leads the news agenda in this country.
When we see so many titles closing around the country and some communities having no coverage at all, that's quite dangerous, particularly for democracy, in those local communities. If a local community has no local newspaper, neither online nor in print, that means the local council news is not getting covered. I see my good friend the member for Fremantle sitting over there, the former deputy mayor of the fine Fremantle City Council. If the Fremantle Herald, a fine independent local newspaper, didn't exist, who knows what the Fremantle council would get up to without the oversight of newspapers like the Fremantle Herald?
Local newspapers are incredibly important to democracy and local communities. They cover local sports. They talk about local heroes. When that doesn't happen, councils can get away with things and local people don't learn what's going on in their communities. That leads to a deterioration in local quality of life. I'm hopeful that this code will ameliorate some of that. I am hopeful that the requirement of arbitration for companies generating revenues of more than $150,000 will be useful for local papers, in particular, and, of course, smaller stations. The jury is out on that, but I am hopeful.
One thing that does concern me already, in speaking to local publishers, is how they're fairly unaware of the detail of this. I know we've been waiting for some time to see the detail come before the House, but local publishers don't really know what's available to them under this, so I would exhort the government to—after this passes the parliament, and I'm confident that it will with our support in the Senate—go on an information drive. They can really let the smaller publishers and stations in particular—we know the big guys are looking after themselves and striking the deals—out there in country and regional Australia know more about the detail of the code. They need to know what it means for them and how they can derive revenue from it. I would certainly suggest the government get that information campaign out there, because there's a lot of uncertainty in regional Australia about what this code and the opportunities could be for local media.
I want to briefly come to the submission from Country Press Australia. They put a submission in, in June last year. Quite rightly, it said:
The outcome of this Code is one of the most important media policy decisions affecting democracy in this country ever. The results will likely determine the future of the independent regional and local publishing industry in Australia.
CPA believes that the mandatory code must consider that balance of power, the economies of scale, the diversity of voice and most importantly the significance of hyper local news and what that means to communities.
… … …
If this policy results in large, ongoing financial support to a tiny handful of the biggest, most powerful media companies and does not support independently-owned news/public interest journalism on a scale that ensures its viability it will dramatically increase the concentration of ownership of Australia's news ecosystem into the hands of two or three large companies.
Diverse ownership of news publishing is crucial to our democracy.
I could not agree more. I would hate to think that any code or any further media reform of any sort in this country would allow even more media concentration. The last thing we want is more and more titles and stations ending up in fewer and fewer hands.
The key to a healthy democracy is a diversity of views and a diversity of ownership. It used to be, 30 or 40 or 50 years ago, that local TV stations and local newspapers were owned by a well-known local businessman—maybe the used car salesman or caryard owner or a local mayor. It was somebody who lived in the community and was relatively wealthy. The news reflected those sorts of values. Of course, as those titles got gobbled up by larger and larger corporations, owners of media corporations and companies became millionaires—that is, you had to be a millionaire to own these things. The news reflected their values. And now, of course, to be a significant media owner in this country, you've got to be a billionaire or be part of a consortium of billionaires. More and more, we're seeing the values in journalism reflecting the values and agendas of the owners. It used to be that local journalism once reflected the values of the local owners, so it would reflect the values of the local communities in which they were embedded. Now there is so much media in the hands of a few corporations—they might own supposedly local titles, but they are part of a bigger corporation—that they no longer reflect the values of their local communities. They reflect something other—that is, a bigger agenda. It might be a corporate agenda or a political agenda, but it's not the agenda of the local community.
Diversity is so important. I think we're going to be much better off, as a result of these codes and some of the shakeouts going on. If we can somehow get to more and more local media being owned by more and more local people, whether it's local businesspeople or coalitions of local community associations or well-meaning individuals or philanthropists or whatever, I think that'll be really healthy for our democracy. Some of them will be Liberal-leaning, some will be Labor-leaning and some will be Green-leaning. It doesn't matter which, but if we can get that diversity across our media landscape that is really what is most important, because that's what's important for democracy.
To wrap up, we are backing this code. It's imperfect and it's a very complex area. As I said, if this were just a matter of destructive capitalism—the minister might know what the term is better than me—and if this was just a matter of widgets, new technology replacing the old technology, we wouldn't be here debating this. We would just let technology have its turn. But involved in media is journalism. We're not just talking about advertising, we're not just talking about the making of wheels or something else; we're talking about the role of journalism. Because the old model has been smashed, and journalism has been smashed with it, we need to find a new way to make sure that journalism thrives and continues because it is so important to our democracy.
The code has some critics. Amanda Lotz is a professor of media studies at QUT and just a couple of weeks ago she wrote that she believes:
…the code is unlikely to do much to fix the crisis faced by journalism in the internet age. It isn't even a band-aid on the problem.
The traditional commercial news business model is broken beyond repair. If the government wants to save the social benefit of public-interest journalism, it must look elsewhere.
She goes on to give some statistics about how much revenue has been lost.
There's a lot of work to be done. The code is a beginning. It's certainly not an end. It's one of the recommendations of the ACCC, but there were a whole bunch of other recommendations that the government has failed, so far, to incorporate. Some of those include reviewing privacy laws to give Australians the right to understand and control the way their information is being used, requiring social networks to take more responsibility for misinformation and disinformation. I'll repeat that: one of the ACCC recommendations—and I know the member for Hughes is listening—is to require social networks to take more responsibility for misinformation and disinformation, and to build greater understanding of how big tech is using algorithmic advertising to generate billions in annual revenue. The ACCC has also called for a bunch of other things, which we exhort the government to look into.
We've heard repeated references to the value of diversity of opinion in this debate in terms of democracy and the role of media in facilitating diversity of views. I have to say there hasn't been too much diversity of views in this debate. For me to express them, I have to confess to you, Deputy Speaker, I am either crazy-brave, or I am just the dumbest politician in Canberra to want to put a number of views that run contrary to the overwhelming commentary that we have had in the media about this. I think it is important to have some things—
I do not want to be associated for the member for Hughes in doing so, I might add! I would like to make this point: in saying these things, the easiest thing for me to do as a member of parliament is just to back the media on these reforms. That is easy. I'll get heaps of coverage. It will all be good for me and will be pretty much like I have seen a lot of Liberal backbenchers—some of whom profess to be major supporters of tech—do through the course of this debate. It would be just the sweetest ride. It would be so good.
But I'm sorry, I'm not built that way and I've never approached politics in that way. Because from my point of view, I think we need to call out everything in this. Before I do, I just want to acknowledge this: when it comes to technology, I absolutely get that there are a number of major issues that need to be dealt with. Tech has, in large part, impacted on the media. I get that too. Google, specifically, revolutionised the way that people could advertise on their platform—cheap, widespread access for people to see those ads. There has been a lot of work to recognise that the platform and the advertiser, being one and the same company, have a competitive advantage over others. I totally get it. I absolutely understand that, and that's had to be a reform from a competition perspective. There is a serious market power that has been accrued because of the way in which those platforms lever off the network effect. They bring a lot of consumers and producers together at once, and they just keep growing and growing and growing. This has generated massive amounts of data that, in this day and age, as people have described elsewhere, is the 'new oil' that is making businesses function. That data has fuelled a lot of growth in those companies, it has fuelled a concentration of market power, and it has made these big firms continue to grow bigger and bigger and bigger. With that data come massive privacy issues too. It's not just going to be on the tech side; there are a lot of businesses now that gather up data and use it in ways that, if the general public knew exactly how it was being used, they would be deeply concerned about. So privacy reform is another big issue.
In terms of competition law, from the point of view of big tech players swallowing up smaller firms that might be potential rivals, that's a big issue as well. The ACCC identified it in this landmark report, and there's a lot in that report. I said it was a landmark report when it was first released, and I still believe it is. There's also a challenge to competition law in an environment where tech actually has a deflationary impact, because a lot of the things that are provided by tech are provided for free. So there's a deflationary impact, and those firms don't necessarily immediately benefit from that, whereas competition law is about the impact: if there is a detrimental impact on a consumer, that's when competition law kicks in. So there's a longer-term reform of competition law that has to happen as well. There are the health impacts of tech addiction, too.
So there are a lot of things that we need to be able to deal with in the technology space. I get all that. But do you think for one minute that a conservative government would seriously tackle all those issues? No way. They would never reform competition law or undertake any of the things necessary. I challenge them, actually, if they're serious about privacy, to challenge the way in which the general public's data—in having a benefit for the general citizenry, not as a consumer but as a citizen—is used. I will wait a long time, and I suspect many members in this place will wait a long time, for that to happen, right? That's that, too.
The platforms themselves have opened up new ways to express yourself, and I certainly do value, as a parliamentarian, the ability to use social media to reach new audiences. But I've got genuine concerns about our ability to have diverse views heard in one of the most concentrated media markets on the planet. We have one of the most concentrated media markets on the planet, and that does impact on the diversity of views, massively. If we are told in this debate that these reforms are important and that the tech players have an impact on democracy, on the diversity of views and on the ability of the media to operate in that environment, then I want a fair dinkum assessment, too, about the concentration of media in this country that prevents a diversity of views. That's never going to happen from that side of politics. Never, ever, is it going to happen from that side of politics. And not for one minute do I think that side of politics has got a new-found commitment to transparency and openness. FOI laws, freedom of information laws, have been run into the ground. Parliamentary question time has been run into a joke. The PM flicks more questions to other ministers than he answers himself, and he won't be accountable. At estimates processes, we have more questions taken on notice than answered, I reckon. Estimates, and the transparency that is provided by estimates, has been thwarted by this government. We still don't have a national integrity commission, two years after it was promised. So don't tell me for a minute that that side of politics has suddenly dressed itself up as the champion of democracy, wanting to see diverse views flourish in an open environment. Give me a break.
The biggest thing, and the thing I'm most deeply uncomfortable about, in this entire debate is the way in which big interests can use competition law in their own interests. It is the big interests that have driven competition law on this. The ACCC has never stepped in to deal with the concentration of media in this country. I don't see it. Have they forced any divestment? No. Any time there is a potential merger, the view is largely that it's going to be in the public interests because those media outlets might fall apart. This government certainly hasn't presided over media diversity—quite the contrary. Two hundred newspapers have closed, as the shadow minister for communications pointed out; hundreds of journalists' jobs have been lost; 21 local government areas are without coverage from a single local newspaper, print or online; and media diversity in regional or remote areas is already at or below the minimum number of voices in 68 per cent of licence areas. The government recently admitted signs of market failure in regional commercial television broadcasting and we've had regional media organisations launching campaigns, begotten by years of government inaction and neglect, as indicated by the shadow minister for communications. The ACCC hasn't stepped in to deal with concentration.
They've certainly never stepped in to help small business get a better deal out of the big media players on advertising. We've talked a lot about advertising in this debate and the impact on media. When has the ACCC ever stood in for the small players? In regional markets, they absolutely can get onto regional TV networks and in regional papers, but not in the cities, because they're squeezed out. They're either squeezed out through a combination of sweetheart deals or the pricing is driven so high that a small business can't get in. I've never seen the ACCC deal with that—never—and we've never seen the government do it.
Does anyone really believe that the government did this for anything other than big interests in the media? As much as we talk about big tech, let's talk about big media. This conservative government did not do this process on behalf of The Guardian or The New Daily or Schwartz Media and The Saturday Paper. They never did it for them. Let's say it: they did it for the bigger interests in media. They did it for News Corp, they did it for Fairfax, they did it for the big commercial free-to-airs. That's what they did it for.
So I absolutely support that journalists should get paid for their content. I totally do. But in many instances, these jokers—sorry, the government—wouldn't know what they're talking about. If this content is on a subscription basis, you'll either get a limited number of free views, in some cases, or you'll hit a paywall. I remember pleading with News Corp when they operated local newspapers in my area, 'Please do not put local papers behind a paywall.' The local community never paid for those papers. The papers were delivered to homes less, but they didn't pay for them. If it's behind a paywall, you're never going to see local information. But they put everything behind a paywall, so you paid for content or you had a limited number of views and then you had to get a subscription.
What we are talking about here is the two-way value proposition. Google, as a big search engine, does absolutely get commercial benefit when they lob up a reputable newspaper in response to one of your search queries. They absolutely get commercial value, but so does the newspaper. So does the media outlet if they are prioritised because of their reputation. So the two-way value proposition is what it's all about. Unfortunately, in terms of Google News Showcase—many people may be unaware of what it looks like; Google will hate me saying this, but it looks like Apple News—it's the curation. The news outlets will get paid the licensing fees and the curation costs. It's a good deal for the news outlets and a good deal for Google. It's also a good deal for all of them to sidestep the complex horror of this code that would have been a legal nightmare. It is in their interests, from the media perspective, to sidestep all of those costs, and it is also in the interests of Google not to have to go through that.
My good friend the member for Lyons raised this. I've known him for many years and I respect a lot of the things he has raised, but I think it's important to say this. Richard Holden, who's the professor of economics at UNSW Business School—and don't think he's a Labor-friendly person; he's stuck it to us and them, so he's pretty impartial—said in the Fin Review:
Consulting firm AlphaBeta showed that between 2002 and 2018, newspaper revenue fell from $4.4 billion per year to $3.0 billion. That is indeed a very substantial decline. But the overwhelming majority of this came from the loss of classified advertising, which fell from $1.5 billion in 2002 to just $0.2 billion in 2018.
Did the revenue go to the tech companies? No, it went to the online players. Bear in mind that there's not much acknowledgement by the media companies that they shunted off a lot of their classified advertising into realestate.com or domain.com.au. They made those decisions. They make the decisions as to which audiences they chase, how big that audience will be and whether or not it will sustain them. They make them. As Holden says:
The bottom line is that newspapers used to have their own monopoly—on classified advertising. And a technological innovation—the internet—destroyed that monopoly.
But the big tech companies were not the winners, because it didn't all flow to the Googles and Facebooks; it went elsewhere. That's the big thing that needs to be recognised.
So there's a lot in there. But here's the thing: out of all this effort and all this money that's being sloshed around right now, we're told that in one year's time it's going to be review. Yeah, right! I'm sure that the government, going into an election year, is going to do a review on this that's contrary to the media. I'm sure that's going to happen! It's not, by the way. What I want to be absolutely certain about is this: Does this code lead to more journalists? Does this code lead to better-paid journalists, meaning we're getting quality coming in and we're holding onto the quality that's there? Will it just mean that there is a transfer of wealth, out of the tech firms and into the shareholders, and we never seen the benefit out of it? Because if that's what happens then this whole process is a joke. If we do not see more journalism, more independent outlets, more avenues, more diversity and more strengthening of the role of media in this democracy, if it all goes to shareholders, this process will have been an utter joke. If that happens it should be called out. I don't think we're going to find that out in a year's time, because judging by the government's performance on this—they were so slow to bring this to the table—I doubt very much they're going to bring that in. But I tell you what: there are some of us that are watching, and we will see if this genuinely leads to more and better journalism. I am all in favour of those revenues going towards that, but I'm not in favour of a transfer of wealth. (Time expired)
Like proud grandparents, Centre Alliance welcomes the arrival of this piece of legislation. I say 'grandparents' because it's back to a previous parliament, a previous generation, under a different name—the Nick Xenophon Team—that the genesis of this bill can be traced. Back in 2017, when the then Turnbull government was negotiating its historic media reform package, my colleagues and I recognised that we needed to go further than media ownership to safeguard the longevity of public interest journalism. We negotiated a range of measures, including a community television licence extension, a review of Asia-Pacific broadcasting services, and the Regional and Small Publishers Jobs and Innovation Package, which, thanks to government tinkering, has been a bit of a challenge.
However, of import for this bill, we negotiated for the ACCC to conduct an inquiry into the impact of the new digital environment on media. My colleague Senator Stirling Griff undertook extensive work on the terms of reference for this inquiry, which examined the effect that digital service engines, social media platforms and other digital content platforms have on competition in media and advertising services markets. You could say that, basically, Google and other platforms have cannibalised local content. At the time, my colleague said that the government needed to rein in the uncompetitive advantages that global internet giants such as Facebook and Google were exploiting. They were exploiting Australian made content and profiting while others were doing the lion's share of the work. We believed that Google and Facebook needed to pay a fair price for unique content that was not their own.
The inquiry's final report made a number of recommendations but, in effect, found there were serious issues relating to the market power of the digital platforms that were affecting Australian businesses, the media advertisers and consumers. The government response was a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms.
This bill creates the framework for that mandatory bargaining code, and Centre Alliance supports this framework. I note that the final version of this bill includes amendments addressing feedback from stakeholders on including the ABC and SBS, an inclusion that's very much supported by Centre Alliance and by my electorate. I note that, in the past week, Google has come to the bargaining table to negotiate content deals with big media players such as Nine Entertainment, The Guardian Australia and the ABC. I'm yet to see any reports about Facebook coming to the table, which is disappointing.
Centre Alliance remain concerned about the small media players. We hope they will benefit and not be short-changed by this new bargaining framework in the way they have been short-changed by previous attempts in this parliament to maintain quality public interest journalism, particularly in regional Australia. Back in 2017, during the media reform debate, in addition to the ACCC inquiry into digital platforms, NXT also negotiated the Regional and Small Publishers Jobs and Innovation package worth just over $60 million. Sadly this package has fallen short of our intention to help regional and small publishers. Centre Alliance share the concerns expressed by Country Press Australia that the cadetship program component only spent $1.8 million in the first round; the remaining $6.2 million sat in limbo at a critical time of need. Then there was the $38 million Regional Small Publishers Jobs and Innovation Fund, which morphed into the $50 million Public Interest News Gathering program, or PING. Country Press Australia raised serious concerns to the government that their expanded eligibility criteria for the PING would water down the intent of the Regional Small Publishers Jobs and Innovation Fund, and that proved well and truly to be the case. The small regional and remote publishers, which NXT and indeed the ACCC wanted to assist, ended up receiving only around 15 per cent of the funding. The bigger media companies, which this funding was not designed to assist, received the bulk of the funding. This is deeply troubling and, I believe, short-sighted.
Public interest journalism is important to our democracy and it's important to society, but it shouldn't just be supporting our cities. Regional Australians need to hear their own stories and they shouldn't have just the ABC providing that important service. The Public Interest News Gathering program needs to do what Centre Alliance negotiated this fund to do—that is, assist true regional and small publishers. More also needs to be done to include small and regional publishers in the apprenticeship program. This is a good bill. I'm pleased this bill is here, and I commend it to the House.
It is no secret that our media landscape has been changing in recent years and, in many respects, not for the better—be it the small local newspapers going bust or the big media conglomerates buying up outlets across the country and consolidating them. There are a number of reasons for this but a lot of them come down to that old chestnut of money. In the golden days of television and meticulously thumbing through the newspaper, advertising bolstered the coffers of the media giants. Traditional media has been fighting for survival for years—ever since news hit the web and people realised they didn't have to buy the paper to read the news. All the while, the daily classifieds in local rags disappeared. Small businesses discovered online advertising and online news.
The classifieds were rivers of gold. Now they are Gumtree, Facebook Marketplace and Perth Beer Economy. It was a perfect storm that can only be blamed on progress and the advancement of technology, where policy has simply not kept up. This doesn't dismiss the fact that, sadly, this has unfortunately resulted in many local news outlets shutting up shop. Between 2008 and 2018—that's 10 years—106 local and regional newspaper titles closed across Australia, decreasing our media landscape by 15 per cent. Since just 2019, that number has nearly doubled to 200. The COVID-19 pandemic hasn't helped with that either. We expect that the number has only continued to climb.
Amongst all of this, the two most ubiquitous platforms on the planet—Facebook and Google—have grown their rivers of gold in online advertising, driving users to their sites and therefore to their ads in part by displaying news content. But none of these 21st century rivers of gold benefit these same news providers. The platforms do not share any of that revenue, revenue partly generated by eyeballs looking for and interested in these news articles from the advertisers who used to advertise with those news publications. So it's only right that we find ways, such as through this code, to ensure that there is a mechanism to enable those news publishers to share in the revenues that the platforms partly derive from the output of such news publishers.
We need a code that regulates digital platforms and ensures that people get paid for the work they do. We must support journalists and the fearless work that they do and the newsrooms that they work in to enable them to do what they do in the public interest. We must ensure that they're paid properly for their work, because, as much as a journalist is 'only as good as their last story', even if that yarn was a cracker that got lots of clicks, it's not currency to put food on the table or pay the rent or keep a suburban newspaper alive.
Labor support the bill before us today as amended by the government. We have offered in-principle support for a workable code from the outset. This code, after all, is a key recommendation of the ACCC, following the 18-month long digital platforms inquiry. We're disappointed at the delay and the uncertainty that has come with this process. The government did say that it would get it done last year. The delay has delayed potential revenue for these media outlets. We must, of course, also be careful in how we implement this legislation and the code with it. That's why it's important that there will be a review of this code in a year's time.
It is important also that we have some awareness of potential unintended consequences that can arise if this code and the agreements that are made under it or arbitrational awards made pursuant to it are wrong. The code requires the sharing of information, for example, and of algorithms used by those platforms, which the news publishers that make agreements with them will be allowed to assess, allowing them to ensure their content is more likely to be displayed in searches or in feeds. Not only may this result in important advertising by small local businesses being deprioritised or not viewed at all; it may also mean that larger media organisations and their IT teams that are much bigger than our local suburban and regional news outlets are able to employ are better able to leverage such algorithms at the further expense of those smaller suburban and regional outlets, making it harder for users to find local news and harder for local businesses to get in front of their local customers through these platforms. The capacity of smaller media players to collectively bargain with the platforms is a very important part of the code in this regard, but it may still not be enough. For this reason, vigilance of the practical effects of the code and the agreements made pursuant to it and the consequences of that will be vitally important.
In conclusion, it shouldn't go unnoted that this government seems perfectly happy for businesses to collectively bargain under this code and yet continually tries to undermine a worker's capacity to collectively bargain, such as with its newly proposed greenfield agreement provisions in its Fair Work Act amendments and it's continual attempts to undermine Australia's union movement.
Let me start by thanking those members who've contributed to this debate. The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 establishes a world-first mandatory code to address the bargaining power imbalances that exist between digital platforms and Australian news media businesses. With consumers now turning more and more to news online, news media businesses are grappling with the challenge of finding a viable and sustainable business model for the provision of public interest journalism. Public interest journalism plays an important role in our society. This role can only be fulfilled by a strong, diverse and sustainable Australian news media sector.
This bill responds to the key findings of the Australian Competition and Consumer Commission's digital platforms inquiry. The ACCC conducted a detailed inquiry over almost 18 months and set out a series of recommendations in response to the substantial market power that has arisen through the growth of digital platforms, their impact on competition in media and advertising markets, and implications for news media businesses, advertisers and consumers. The ACCC found that digital platforms had become unavoidable trading partners of news media businesses, providing them with substantial bargaining power. This problem is not unique to Australia, and we recognise that similar findings are emerging overseas.
This code addresses this problem in a fair and flexible way. It is a key part of the government's strategy to ensure that Australians continue to enjoy the benefits of digital technology while, at the same time, protecting key elements of Australian society such as a strong, sustainable and Australian independent news media. The code will be reviewed by the Treasury one year after its operation to ensure it is delivering outcomes that are consistent with the government's policy intent.
I thank the Senate Economics Legislation Committee for its consideration of this bill and welcome the finding that it will help safeguard public interest journalism in Australia. I thank all who have spoken and I commend this bill to the House.
The original question was that this bill be now read a second time. To this, the honourable member for Greenway has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.
Question agreed to.
Original question agreed to.
Bill read a second time.