Public Money Well Spent?
New research from AUT shows that public funding of the news media during the Covid pandemic has not prevented long term layoffs, and in many cases went to commercial news organisations at the same time as they were reporting profit and paying dividends to their shareholders. The funding also had unintended negative consequences.
The paper Public Money Well Spent? by AUT’s Dr Merja Myllylahti and RMIT’s Associate Professor James Meese, compares the allocation of funds in New Zealand’s Public Interest Journalism Fund (PIJF) and Australia’s Public Interest News Gathering Fund (PING). It also raises issues that policymakers need to address when drafting media policies in the future as government support can lead to negative outcomes.
These funds herald a new era of journalism funding in the Anglosphere because they provide the news media with direct cash payments. While the news media has been supported by public money in the past, the two funds differ from tax incentives or indirect support mechanisms more commonly used in the Western media markets.
While a substantial proportion of the public money of the two funds was aimed at retaining newsroom roles, redundancies and newsroom closures have continued, highlighting the limitations of these specific government interventions.
Myllylahti and Meese say that globally commercial legacy news media organisations are in trouble and while many different funding mechanisms have been tested it seems that government intervention may stymy innovation in the sector.
“Worse, there seems to be a correlation between funding and public sentiment – meaning funds intended to shore up news organisations and strengthen democracy have become targets of conspiracy theories around media freedom and misinformation,” says Myllylahti.
“Many Western democracies have implemented a variety of financial supports, including direct financial supports like the PIJF and PING, tax subsidies and rebates. France has even introduced a tax credit for anyone who subscribes to a newspaper or current affairs magazine. Our comparative review shows that while these funds have enabled legacy news media to remain functional, they have not prevented layoffs, restructuring and a reduction in news production.”
Approximately 637 media jobs disappeared in New Zealand during the pandemic, and more than 150 newsrooms shut down in Australia.
Myllylahti and Meese recommend policy makers considering the funding of journalism as a public good should consider how funding can support innovation in the sector, ensure funds are administered transparently, carefully timed and pay attention to public sentiment and mood.