Government funds are not ‘taxpayer money’ — media and politicians should stop confusing the two



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Jonathan Barrett, Te Herenga Waka — Victoria University of Wellington

Rhetoric plays an important role in tax debate and therefore tax policy. If your side manages to gain traction in the public imagination with labels such as “death tax” or “dementia tax”, you have gone a long way to normalising the labels and winning support.

Some truth underpins these particular labels — an estate tax is triggered by a person’s death, and the United Kingdom’s abandoned levy for end-of-life care would have been particularly relevant for dementia sufferers.

Nevertheless, these tags are essentially political messages and we should expect unbiased media to use neutral terminology. Fair reportage would not, for example, repeat the extreme libertarian claim that “tax is theft” — a baseless slogan incompatible with the rule of law.

However, both reputable media and politicians of every stripe invariably use the phrase “taxpayer money” to describe government funds, despite the phrase having no constitutional or legal basis.

This article argues that truth-based media should avoid the phrase, and progressive politicians should recognise they fall into a conservative trap when they repeat it.

Taxpayers don’t own their taxes

Richard Murphy, one of the founders of the UK’s Tax Justice Network and author of The Joy of Tax, explains that “taxpayers’ money” is the money left in our pockets after we have paid taxes that are legally due. Money payable through taxes is the government’s property.

This is quite easy to prove — try not paying your income tax and see if the courts will enforce government property rights in that money.

Murphy also observes that “taxpayer” is typically understood as “income tax payer”, thereby implicitly preferring high income earners while excluding beneficiaries. But a goods and services tax (GST) ensures everyone is a taxpayer, and indirect taxes disproportionately affect the poor.




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Similarly, at a local level, “ratepayer” has become synonymous with the propertied voice to which councils should pay heed, even though renters (rather than the registered ratepayer for a leased property) bear the effective burden of local rates.

If the government is the legal owner of its funds, then, does it hold tax revenue in trust for taxpayers? Not at all. Subject to the rule of law, governments can do what they choose with their money.

Elections decide how taxes are spent

Self-appointed watchdogs such as the Taxpayers’ Union claim to bring government waste to public notice. Rightly so — as citizens, we should demand proper stewardship of government funds.

But our actionable right as electors is to vote a wasteful government out of office. The electorate as a whole, rather than an ideological interest group, determines the size of government we should have.

Unlike trust beneficiaries, we do not have an equitable interest in the government’s money. If it were otherwise, groups of taxpayers might have some claim on the government to spend or not spend its money in particular ways.




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For example, paying taxes to fund belligerent activities is problematic for pacifists, notably certain religious groups. A Religious Freedom Peace Tax Fund Act, which has been regularly introduced to the United States Congress, would permit dissenting taxpayers to assign the defence portion of their taxes to supporting peace work and social services.

Proponents of the legislation have not sought to pay less tax than their fellow citizens but to direct how their tax contribution is spent. These attempts have failed, as they must do. Democratic political communities permit dissent, but nonconformism does not extend to directing how taxes should be spent.

Tax is part of the social contract

In The Variorum Civil Disobedience (1849), a reflection on his imprisonment for failing to pay a highway tax, Henry David Thoreau recognised that an individual citizen can protest against government by refusing to pay tax (and accept the consequences), but they cannot treat the government’s choices in its expenditure as if it were a cafeteria. He wrote:

It is for no particular item in the tax-bill that I refuse to pay it. I simply wish to refuse allegiance to the State, to withdraw and stand aloof from it effectually. I do not care to trace the course of my dollar, if I could, till it buys a man or a musket to shoot one with — the dollar is innocent — but I am concerned to trace the effects of my allegiance.

Liberal democracies are based on some form of metaphorical social contract, most obviously manifest in the constitution. Under this arrangement, parliamentarians are elected representatives, not agents for particular groups.

Henry David Thoreau
Henry David Thoreau: ‘the dollar is innocent’.
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Like any government that fails to comply with the basic values of society, groups that seek to control government expenditure outside the electoral process can be seen as bending, if not breaching, the social contract.

A handbrake on decisive action

A progressive government should reject the suggestion that its funds are not its own to use as it sees fit for the betterment of society — as always, in accordance with New Zealand’s two fundamental constitutional principles of parliamentary sovereignty and the rule of law.

Kowtowing to a myth of “taxpayer money” may act as a handbrake on decisive action. We are taxed in accordance with statutory law. If Inland Revenue seeks to collect more from us than is due, we have access to various tribunals and courts.

These legal rules and processes determine what is mine and what belongs to the government. Broadly, we are free to deal with our own property as we see fit — and the government is too.

Media and progressive politicians should stop perpetuating the untruth that taxpayers retain some residual property interest in the taxes they pay. Taxpayer money is nothing more than their after-tax property and the government’s money is its own.The Conversation

Jonathan Barrett, Senior Lecturer in Taxation, Te Herenga Waka — Victoria University of Wellington

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Expect delays and power plays: Google and Facebook brace as news media bargaining code is set to become law


Tim Dwyer, University of Sydney

The long-awaited mandatory code that will force Google and Facebook to pay Australian media companies for news content was finally unveiled yesterday.

The Treasury Laws Amendment Bill 2020 (news media and digital platforms mandatory bargaining code) will be introduced to parliament today, before being referred to a Senate committee.

Many of Australia’s news businesses have been on a hiding to nothing for more than a decade, as their revenue is undercut by the targeted advertising business model used by major digital platforms.

The most visible casualty has been public interest journalism — with the prospect of a well-informed citizenry on a slower, less obvious burn.

Against a backdrop of reports suggesting intense lobbying efforts by Facebook and Google against the new legislation, it appears some key concessions have been achieved by the platforms that weren’t present in the draft code.




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What’s changed in the revised code?

First, the revised code will now abide by an added “two-way value exchange” principle. This allows the monetary worth of traffic sent to news providers to be taken into account when determining the financial value of a particular news business’s content to the platforms.

How this will be calculated, however, will likely be an ongoing bone of contention for both parties.

A second major concession will see Facebook’s Instagram and Google’s YouTube exempted from the application of the new law. But the Treasurer will be able to add these (and other platforms) at a later date, should he deem it justified at the time.

A third concession is the halving of the 28-day notice period for the platforms to warn news websites of major changes to their ranking algorithms. These directly impact how news articles are displayed on Facebook’s Newsfeed and Google Search.

It seems the basic idea to “level the playing field” between platforms and news providers remains baked into the revised code, but only time will tell whether it works in practice.

A figure stands under a Google sign.
Following a year of discussion, Google last month struck a deal with French media in which the tech giant is expected to pay about €150 million (roughly A$245,003,250) over the next three years.
JAE C. HONG/AP

A related objective — to implement a process that sustains public interest journalism — remains equally tricky and may hinge on the revised code’s success.

But many will be pleased the public broadcasters ABC and SBS now fall within the code’s scope, too. Both will be financially compensated for news content along with their commercial rivals.

This may seem like a win, and it may be eventually, but for now it’s unclear how this will actually play out in terms of the government’s ongoing funding of these broadcasters.

Although conjecture at this stage, it may emerge in a forum such as Senate estimates that any compensation payments should be factored into overall funding calculations for the public broadcasters.

The arbitration model

One pivotal feature of the new legislation is it will address the entrenched power of the platforms by introducing a “final offer arbitration” model for price negotiations.

This process, overseen by the Australian Communications and Media Authority, will be mandatory when parties are unable to independently reach an agreement. It will likely be central to the new code’s success, or lack thereof.

Curiously, the revised code’s framework encourages deals to be struck outside of it. In these situations, key elements of commercial negotiations between the parties can be “turned off” with mutual agreement.

This appears to be a pragmatic recognition by the ACCC the code will never be able to control the realities of commercial media deal-making, which continue to be struck despite the code’s new bargaining marketplace.

However, where negotiations break down, news media businesses will be able to trigger the code’s provisions for meeting minimum standards.

This will cover advance notice of algorithmic changes and the requirement to engage in good faith bargaining for up to three months, before participating in the mandatory arbitration process.

Smaller news publishers will be able to bargain collectively, or accept “standard” offers from the platforms.

When one party fails to engage

The code has reasonably strong enforcement provisions in cases where there is a failure to negotiate in good faith, comply with an arbitration decision, avoid participation or engage in “retaliatory action against news media companies”.

The maximum penalty for a breach by Google or Facebook is the greater of either 10% of the platform’s annual Australian turnover, A$10 million, or three times the benefit obtained as a result of hosting the specific news business’s content.

Facebook and Google have put their previous threats to switch off local news content on hold until they see the final version of the code. For now, they appear to be engaging with the ACCC.




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We still need to tackle media concentration

As we await the final version of the code, the irony is not lost on those of us also waiting eagerly for events to unfold before another Senate committee on media pluralism.

The committee was set up in response to a petition started by former Prime Minister Kevin Rudd. Amassing more than 500,000 signatures, Rudd’s petition has called for a royal commission into the negative influence of News Corp’s power in Australia’s highly concentrated media landscape.

A rich history of Australia’s parliamentary inquiries into the media indicates we can expect delays, power plays and ongoing lobbying in both these committees. And clearly there will be winners and losers in both.The Conversation

Tim Dwyer, Associate Professor, Department of Media and Communications, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Courting the chameleon: how the US election reveals Rupert Murdoch’s political colours


Denis Muller, University of Melbourne

Joe Biden’s victory in the US presidential election raises a perennial question about what Rupert Murdoch does when the candidate he has opposed wins.

Answer: He adapts and he waits. Electoral cycles last three, four or five years. Murdoch has been wielding power for five decades.

Murdoch is a chameleon. It is true that when political and business conditions are favourable he glows brightly in blood-red conservatism. But when, as now, conditions are uncertain, the colour dims and takes on a more complex hue.

The voices and front pages of the empire become more diverse. It gets harder to exactly pin down where the emperor himself stands. He deflects awkward questions by saying he defers to his editors, or he claims to have retired and says he will speak to the heir, his son Lachlan.

These are the first steps in a shadowy repositioning, and we have seen it happen time without number.

Reactionary ideology is important to Murdoch, but not as important as making money.

Money not only keeps the shareholders happy, it provides the means by which he can subsidise his unprofitable or barely profitable newspapers because they are crucial to the way he wields power.




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So the priority when a disfavoured candidate or party wins is to do nothing to antagonise the new regime and instead proffer a small olive branch. Last Sunday’s New York Post banner headline – “It’s Joe Time” – was a classic of the genre.

Over on Fox News, he remained quiet when the Fox “decision desk” called the crucial state of Arizona for Biden, absorbing pressure and entreaties from Trump’s people to intervene.

All of a sudden, the chorus of pro-Trump voices on Fox became a discordant racket. Some, like Sean Hannity, amplified Trump’s claims of electoral fraud. Others, like Neil Cavuto, cut off Trump’s press secretary for making the same claims.

The New York Post, which ran a highly questionable story against Hunter Biden in the last week of the campaign, was suddenly dismissing Trump’s claims as baseless and urging him to accept the result.

Conflict, confusion and contradiction are part of the strategy. Murdoch allows it to unfold. It sends a signal to the Biden White House: we can live with you.

The strategy was helped along on November 13 when Trump sent out a tweet saying the daytime ratings on Fox News had collapsed because they had forgotten what made them successful – the “Golden Goose” – an immortal self-description if ever there was one.

There was a similar pattern to the Murdoch strategy in Australia in 2007 when it looked certain that Labor under Kevin Rudd would end the long reign of John Howard.

In his book Rupert Murdoch: A Reassessment, Rodney Tiffen recounted that, while Murdoch did not want to be backing the losing side, it was difficult for his editors to persuade him to back Rudd.




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In the end, some of Murdoch’s papers, including The Australian, backed Rudd, while others, including Melbourne’s Herald Sun, were allowed to back the Coalition.

The endorsements were pallid, nothing like the full-throated propaganda characteristic of the Murdoch papers when they are unified behind a conservative cause. The chameleon had turned into a blur of pale reds and blues.

Then in 2018, when it looked as if Labor might beat Malcolm Turnbull’s Coalition in 2019, Murdoch once again showed how the business pragmatist triumphs over the ideologue.

According to Turnbull in his autobiography, A Bigger Picture, Murdoch told the West Australian media mogul Kerry Stokes: “Three years of Labor wouldn’t be too bad.”

He prefers it when the Labor side is led by moderates who are amenable to business: Bob Hawke, Paul Keating, Britain’s Tony Blair. But, even then, his endorsements tend to be muted, nothing like “Kick this mob out” on the front page of Sydney’s Daily Telegraph when he opposed Labor in 2013.

In Britain, Murdoch has employed the same tactics. Although his mass-circulation Sun supported Labour in 1997, 2001 and 2005, he allowed the prestigious Sunday Times to support the Conservatives.

But when it comes to endorsing the conservative side of politics, there is no pussyfooting around.

When he turned on Labour after Gordon Brown had succeeded Blair as prime minister, he unleashed the full Murdoch treatment.

Just as Brown was about to deliver his speech to Labour’s annual conference in September 2009, The Sun declared Murdoch’s abandonment of Labour with the banner headline “Labour’s lost it”.

From then until the 2010 election, Murdoch’s ruthless campaign in support of David Cameron’s Conservative Party was carried by all his papers, The Sun in the vanguard with headlines such as “Brown toast”.

At elections, Murdoch has two priorities.

One is always to try to ensure the new regime, whatever its political colour, does not implement regulatory change that will disadvantage the business.

The second is to be on the winning side. This is important to the maintenance of the belief – at least in the minds of politicians – that he is a kingmaker.

When it is clear the progressive side of politics is in the ascendant, the chameleon can start changing colours early and might even complete a transformation before election day.

When it is not a sure thing, however, the skin-deep transformation has to begin when the results come in.

That is what is on display in the US now.The Conversation

Denis Muller, Senior Research Fellow, Centre for Advancing Journalism, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

When too much news is bad news: is the way we consume news detrimental to our health?



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Evita March, Federation University Australia

Humans are curious and social creatures by nature. The news helps us make sense of the world around us and connects us with our local, national and international community. So it’s no wonder we’re drawn to it.

Objective, legitimate news also keeps us informed, empowering us with knowledge to make balanced decisions.

But the way we consume news has been profoundly altered by media developments. As news outlets have adapted to media trends, the way people watch, read and listen to news has changed. And these changes aren’t without consequences.

The way we consume news matters

The increase of online news, particularly when presented via social media platforms such as Facebook and Twitter, has affected how we access and consume our news.

When news was delivered via traditional one-way outlets such as television and radio, we were passive receivers. But on social media platforms, we’re active consumers. We sculpt and cultivate our news through immediate feedback, such as reacts or shares.

There’s evidence this might not be especially good for us.




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Amid an unfolding crisis such as a pandemic, news presented via one-way outlets might be less damaging than news consumed online. In early months of COVID-19, researchers found news consumed online and via social media was associated with increased depression, anxiety and stress. The effects weren’t as bad when news was consumed via traditional media such as television and newspapers.

This isn’t limited to the pandemic. After the September 11 attacks, young people who consumed news via online sources experienced more PTSD symptoms than those using traditional media. This effect was attributed to more graphic images online, and the possibility for extra exposure as people could watch the footage repeatedly.

Where do we source news?

In an average week, more Australian news consumers source their news online (53%) than via print (25%). But perhaps surprisingly, television is still the most popular mode of news consumption. This year, 63% of Australians said they watched television news in an average week. Nevertheless, we’re far more actively engaged with our news than we once were.

Person viewing news on phone and laptop
Information is more accessible to news consumers than ever before — and graphic and repeated exposure could be bad for our mental health.
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Access to news is also radically different. The ability to consume news 24/7, via an almost endless variety of sources, has prompted experts to encourage us to moderate our news consumption.

Our bad news bias — not good news for our well-being

During times of crisis, we’re more drawn to news. In fact, Australians’ consumption of news significantly increased in 2020. During the 2019–20 bushfires, the percentage of heavy news consumers (people who consume news more than once a day) increased from 52% to 56%, and increased to 70% during the COVID-19 pandemic peak.




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Unfortunately, the impact of news on our well-being is also particularly salient during a time of crisis. Multiple studies have found the more we consume news during or after a tragedy, crisis or natural disaster, the more likely we are to develop symptoms of post-traumatic stress disorder (PTSD).

Why are we so interested in bad news, anyway? University of Queensland psychologist Roy F. Baumeister and his colleagues have noted bad is stronger than good. Humans have a “negativity bias”, whereby we pay more attention to negative information than positive.

“If it bleeds, it leads”

Journalists are said to capitalise on our negative bias to capture our attention. Some news sources have learned this lesson the hard way. When a city reporter from an online Russian news website decided only to report good news for a day, they lost two-thirds of their readers.

The problem is, this negativity bias in the news can make the world appear worse than it truly is.

If the news distresses you, try to remember sometimes publications manipulate our powerful cognitive biases to capture our attention.
Shutterstock

The repeated presentation of information can create cognitive distortions, meaning we’re likely to interpret newsworthy problems, like violent crime, as more prevalent than they really are.

This negativity bias might also explain the tendency to focus on ‘doom and gloom’ stories on social media, referred to as doomscrolling.

Research published this year showed when we perceive the daily news as negative, we can feel less positive overall. So it’s no wonder increased news consumption can impact our well-being.




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Those who use social media largely for news, instead of social networking, show increased anxiety and depression. These results highlight the importance of being strategic about how you use social media, particularly during times of crisis.

How can we take control of our news consumption?

First, it’s important to be aware your news consumption via different sources can look very different. Traditional media tends to focus on the facts, whereas stories, rumours, and human interest pieces are prioritised on social media.

Empower yourself with the knowledge that, as humans, we are subject to bias. The media and those producing the news know this. These biases, which make us wonderfully human, also make us wonderfully biased to the information we receive.

Our biases mean we’re more likely to be impacted by negative news and more likely to believe what we see is more prevalent than it truly is.




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That’s certainly not to say no news is good news. News is powerful, and helps us stay connected and informed. But in a world where we’re surrounded by news 24/7, it is important we are aware of our cognitive biases and the distortions they create. Let’s take control of our news consumption rather than allowing it to control us.The Conversation

Evita March, Senior Lecturer in Psychology, Federation University Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Vital Signs. Google shouldn’t subsidise journalism, but the government could



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Richard Holden, UNSW

You might have missed it – what with the biggest recession since the 1930s and a pandemic going on – but there may be big, and bad, changes happening to a media landscape near you.

Right now the Australian government is considering amending the Competition and Consumer Act 2010 to force Google and Facebook to pay local commercial media organisations for the sharing of their content on the digital platforms.

The News Media and Digital Platforms Bargaining Code proposed by the Australian Competition and Consumer Commission will require the tech and media companies to make terms through “mandatory binding arbitration”. It will also oblige them to divulge parts of their core intellectual property (such Google’s search algorithm).

It has been lauded as a world-first in addressing the power imbalance between the platforms and traditional news organisations.

Champions such as commission chief Rod Sims argue it’s a simple matter of forcing Google and Facebook to pay a fair price for extracting value from journalism for which they pay nothing. As Sims put it:

What this was all about was the imbalance in bargaining power, the market failure that comes from that, and underpayment for news having a detrimental effect on Australian society.

Who could argue with that? Even federal treasurer Josh Frydenberg has described it as “a question of fairness”.

But from an economic standpoint the whole bargaining code is hopelessly confused. It fails to properly understand the source of competitive pressure for media companies, and why they have lost revenues over the last 15 years.

Mandatory binding arbitration between tech and media companies is also a completely inappropriate policy tool to achieve the public policy goal of fostering high-quality journalism.

As I have written about in detail for the Stigler Center at the University of Chicago Booth School of Business, making the code law risks doing serious harm to Australian consumers while shovelling money to large media companies like Nine Entertainment and News Corp Australia.

Faced with the prospect of having to divulge key intellectual property, it would not be surprising if Google and Facebook simply prefer not to be in the Australian market. Millions of Australians using Google, YouTube and Facebook will lose out.

Media revenue sinking

Between 2002 and 2018, consulting firm AlphaBeta estimates total annual revenue for Australian newspapers fell from A$4.4 billion to A$3.0 billion. Almost all of this was due to lost classified advertising revenue, worth A$1.5 billion in 2002 but just A$200 million in 2018.

“That’s Google’s fault,” you might cry.

Actually no. The vast bulk of lost classified advertising revenue was due to online “pure-plays” such as Seek, Domain and Carsales. Google and Facebook took basically none of this revenue.




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The media companies were sitting on a gold mine of classified advertising. Then there was massive technological disruption due to the internet and smart phones.

That, as they say in the classics, is show business.

It doesn’t justify making companies who happened to succeed in an adjacent space at the same time fork over a chunk of their revenues.

But aren’t tech companies ‘stealing’ content?

If big tech companies were somehow allowing you and me free access to content we would otherwise have to pay for, there might be a case to answer.

That would be like Google Maps not only giving you directions to a restaurant but the means to also avoid paying for your meal.

But using a search engine does not allow you to get free meals, nor to get around a news organisation’s pay wall.




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In fact, having their content pop up in search results, or shared on social media, helps Australian media companies to attract readers and sell subscriptions – something that now accounts for roughly half the revenues of some leading players such as The Australian.

All you get for “free” is a snippet of a line or two from the search.

For instance, when I searched for news about recently deceased US Supreme Court Justice Ruth Bader Ginsburg, I got this:

If you can figure out the full content of the article from that snippet, you should be using your superpowers for other, more lucrative purposes.

Beware the politics

There is a very real risk this misguided code will end up becoming law.

An overzealous regulator has proposed something that stands to benefit the big media companies, who are – not surprisingly – strongly for it.

Those same media companies have huge influence over public perceptions and the fate of politicians. It will be a brave elected representative who pushes back on the proposed code and draft legislation.

But if politicians were serious about resolving the real issue at stake in all of this, they would act more directly.

Like newspapers all around the world, Australian media and journalists are under pressure – and one thing most people agree on is that high-quality news and journalism is critical to a well-functioning democracy.




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Whatever the market forces that have slashed the funding of such journalism, there is a strong case for government intervention. But if the Australian government wants to subsidise high-quality journalism, it should do it itself.

With the 10-year bond rate less than 1%, it would cost the government just A$18 million a year to fund the interest bill on A$2 billion of media subsidies a year. That’s 72 cents per Australian a year.

And all without driving away the hugely valuable services of companies like Google and Facebook that Australian consumers love.The Conversation

Richard Holden, Professor of Economics, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Is fast-tracking funds to Foxtel the best way to support the media during COVID?



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Johan Lidberg, Monash University

According to an ABC report, government funds were fast-tracked to Foxtel during the coronavirus pandemic.

This news will raise eyebrows, as the media — like so many industries — tries to survive the pain and disruption brought by COVID-19.

Why are some outlets missing out when others have their requests prioritised?

The Foxtel fast-track

The background to these latest Foxtel funds is a $30 million grant, controversially awarded to the subscription broadcaster in 2017.

This was to

support the broadcast of underrepresented sports on subscription television, including women’s sports, niche sports and sports with a high level of community involvement and participation.

At the time, media reports noted the government did not adequately explain why it had given the funds to Foxtel.

Fast-forward to April 2020 and COVID-19 was wreaking havoc in the media sector. The federal government announced a support package for the media, but Foxtel missed out.




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However, as the ABC reported, after a letter from Foxtel chief executive Patrick Delany, the TV service quickly received $17.5 million.

This included bringing forward $7.5 million of taxpayer money already granted to Foxtel. In July 2020, a further $10 million was awarded to Foxtel, with the same opaque justification as the 2017 grant.

The ABC was able to report the process behind these developments following a Freedom of Information (FOI) request.

Foxtel supported as national broadcaster struggles

The Foxtel funds came amid yet another round of cost-cutting and job losses at the ABC. In June, the ABC announced 250 job losses to deal with an $84 million budget shortfall.

ABC logo against colourful light backdrop
The ABC recently announced 250 job losses.
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As of this week, the iconic 7:45am radio bulletin no longer features in Australians’ morning routines as a result of the cuts.

Meanwhile, regional media outlets have been particularly hard hit during COVID. We have also seen recent job losses at News Corp (who is a part owner of Foxtel) and Channel 10.

What support have media companies had during COVID?

The government announced a COVID-support package for the media in April.

This included $41 million in rebates for use of the broadcasting spectrum, targeted at commercial television and radio broadcasters.




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A $50 million Public Interest News Gathering program was also announced to support public interest journalism delivered by commercial television, newspaper and radio businesses in regional Australia.

Is this the best use of taxpayer funds?

The reports of the fast-tracked funds to Foxtel beg the question, where is public money best spent? On the public broadcaster so it can maintain its crucial services (with another bushfire season around the corner) — or on a subscription-based commercial broadcaster?

When you consider the different support packages the Morrison government has launched as part of its pandemic response, there is one glaring omission — support for the national broadcaster.

The ABC is the most trusted media brand in the country. But instead of supporting it, to help us get through the pandemic, the Coalition continues to bleed it. This is the polar opposite to its support of News Corp-owned Foxtel, a relationship the government seems much more comfortable with and clearly prioritises.

Not enough information

When considering whether Foxtel deserves its funding, it would be useful to see a government-issued summary of how it used the first $30 million.

We have seen some reporting (again via FOI requests) of how the initial $7 million was used to boost sports coverage. But given this is taxpayers’ money, best practice would be open and transparent government reporting on how the funding is utilised.

It would also be useful to have an explanation of why the extra funds were provided now.

Unfortunately, information access and openness has not been the Morrison government’s forte.

We have seen a number of cases where the FOI process has been contrary to the spirit of the Freedom of Information Act, which holds that as much information as possible should be made available to the public.

Open filing cabinet, with paper files
The Australian government has been criticised for the high rate of FOI refusals.
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The blocking of FOI requests over Energy Minister Angus Taylor’s attack on Sydney Lord Mayor Clover Moore is one recent example.

The recent requests to the Morrison government about Foxtel is another. According to the ABC, more than half of the hundreds of pages released were blacked out and 80% of the rest had substantial redactions. Communications Minister Paul Fletcher’s chief of staff, Ryan Bloxsom, was one of the FOI decision makers and justified the extensive redactions in this way:

I do not consider it would inform debate on a matter of public importance or promote effective oversight of public expenditure.

This is not just out of line with the aims of the FOI Act, it means Australians remain ill-informed about how and why tax payer money is being spent. Our public discourse is worse of for it.

This makes funding public interest journalism even more important — especially in the regions where coverage of courts and local councils is the engine room of our democracy.




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The Conversation


Johan Lidberg, Associate Professor, School of Media, Film and Journalism, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

It’s not ‘fair’ and it won’t work: an argument against the ACCC’s news media bargaining code



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Damien Spry, University of South Australia

Google and Facebook have threatened to limit or remove news services for Australian users, in response to the Australian Competition and Consumer Commission’s draft news media bargaining code.

This week, Facebook announced should the code become law, the company would stop letting publishers and users share local and international news on its Australian Facebook and Instagram sites.

Google has also made implicit threats to limit its Australian news services – potentially by removing Google News in Australia, as it did in Spain in 2014.

Arguments in favour of the code centre on two points. First, that Australian media outlets are in critical danger of going bust because of Google and Facebook’s dominance of the digital advertising market.

Second, that Google and Facebook are Godzilla-like entities dominating the market and resisting any regulation attempt – especially one that could set an international precedent.

It’s true regulation has a role in addressing the anti-competitive aspects of the digital advertising industry, but I have doubts about the ACCC’s code. It would allow commercial news businesses to bargain with Google and Facebook, in order to be paid for Australian news content included on their platforms.

But I don’t think it will work (which I say reluctantly as both Google and Facebook have much to answer for). I also don’t think the code is fair – and there’s a better way to solve the problem.




Read more:
In a world first, Australia plans to force Facebook and Google to pay for news (but ABC and SBS miss out)


Misunderstanding how news works on social media

For years, Facebook has tinkered with its algorithm to prioritise posts from users’ personal connections, in what chief Mark Zuckerberg characterised as a preference for the digital lounge over the digital town square.

Basically, your Facebook News Feed (the main feed in which you discover new content) isn’t really a “news” feed. Rather, it features personalised content from those you most often, or have most recently, connected with.

If a news story appears on your feed, it has likely been shared by one of your connections. Or, you may be following that company’s Facebook page, or the company may have paid to advertise (boost) the content.

Which news stories you come across on Facebook depends on a variety of factors and algorithmic decisions. This process is complicated and vastly different to how news is presented on a publication’s website, or in a newspaper.

The ACCC’s attempt to have media businesses “fairly” paid for the value of Australian news on social media is problematic because accurately attributing value to this content is anything but straightforward.

It’s worth noting a major point of resistance against the ACCC code is the requirement for Google and Facebook to give 28 days’ notice of algorithmic changes that will affect either referral traffic to news, or the ranking of news behind paywalls.

A person engages with content on facebook via their mobile.
Social media algorithms dictate you’re more likely to be exposed to content that reflects your past online activity, as well as the activity of your online friends.
Shutterstock

The opaque business of digital advertising

Commercial news today is funded largely through advertising based on audience numbers and demographics, rather than content alone (excluding subscription models).

Traditionally, however, audiences have been targeted based on news content. For example, ads for wedding dresses would be placed in bridal magazines. In such scenarios, the content itself is valuable to advertisers because it attracts their specific audience.

In digital advertising, however, the news content is often secondary or even inconsequential for generating ad revenue. The ads target their audience directly based on a user profile of recorded behaviours, characteristics and preferences. The page the ad appears on may be a factor, but one of many.

This is called programmatic advertising. When you visit a site, an automated “bidding war” is instantly conducted where your user profile is matched against potential advertisers. The winner takes the ad spot – and this is decided by several factors including offer price, as well as the likelihood of the ad being clicked.

All of this happens in the time it takes for a website to load (about 200 milliseconds).

The ACCCC code proposes remuneration for publishers based on a negotiated value of news content, but the value of news for online advertisers isn’t derived from the content as much as the targeted audience.

Hence, the tussle between the ACCC, Google and Facebook is both confusing and confused.

Assessing the value of news

The ACCC code also conflates the ways digital news content and social media users are socially and commercially valued. In explaining the need for the code, the ACCC states:

While bargaining power imbalances exist in other areas, the bargaining power imbalance between news media businesses and major digital platforms is being addressed as a strong and independent media landscape is essential to a well-functioning democracy.

This “public sphere” ideal is the premise for treating news content as being important enough to force digital giants to subsidise it. Fair enough, but the ACCC’s “professional standards test” which news businesses must pass to qualify for remuneration sets a low bar.

It doesn’t consider important aspects of public interest journalism, such as concentration of ownership, or newsroom diversity – a vexed issue in Australia’s news landscape.

Also, the code states the ABC and SBS are not able to claim remuneration (but can still benefit from information about algorithms and data). This is based on the idea that commercial news media are more vulnerable than public broadcasters, due to advertising revenue lost to Google and Facebook.

With this, the argument has changed: the value of news is not only democratic, it’s also commercial.

There is another way

It seems Google and Facebook would rather take extreme measures than be forced to pay for news, or provide news businesses information about algorithm changes and user data. Both companies have claimed they provide greater value to Australian news businesses than they receive.

Perhaps the way forward is to regulate programmatic advertising. Specifically, we should scrutinise the complex network of companies that discretely trade data profiles and advertising space. And this industry is dominated by, guess who, Google and Facebook.

Reform in this space may help address the advertising revenue and market power problems the code seeks to resolve.

The ACCC’s next cab off the rank is a review and report on the ad tech industry that considers these issues.

Hopefully it will suggest approaches to regulating the digital advertising market. This seems a better option than the compensation currently being sought.




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How the shady world of the data industry strips away our freedoms


The Conversation


Damien Spry, Lecturer, University of South Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

If Facebook really pulls news from its Australian sites, we’ll have a much less compelling product



Shutterstock

Rob Nicholls, UNSW

Facebook has announced it will ban publishers and people in Australia from sharing local and international news on Facebook and Instagram if a proposal to force tech giants to pay for news becomes law.

The announcement follows the release of the Australian Competition and Consumer Commission’s draft news media bargaining code, under which Google and Facebook would be forced to pay for news on their sites to help fund public interest journalism. Treasurer Josh Frydenberg announced in April the code would be mandatory.

On its website, Facebook Australia’s Will Easton said:

Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram. This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.

Google is campaigning against the same draft code, telling users of Google Search and YouTube the services would be under threat unless the government dumped its proposed revenue-sharing laws.




Read more:
‘Suck it and see’ or face a digital tax, former ACCC boss Allan Fels warns Google and Facebook


Facebook risks making its products less compelling

If Facebook follows through with this threat, it will potentially lead to very uncompelling content on both Facebook and Instagram. Can you imagine Instagram or Facebook without the ABC or Australian news sources?

How are you going to share interesting information with family and friends without being able to put links into posts?

Facebook claims the ACCC code “misunderstands the dynamics of the internet”. But it seems Facebook misunderstands how mandatory industry codes work. If you want to be a platform business in Australia, you have to follow the relevant code. If not, you can exit.

The ACCC code is similar to the franchising code of conduct. For instance, if I want to set up a pizza franchise in Australia, as a franchisee I have to abide by the franchising code of conduct.

Those are the rules of the game in Australia because there’s a recognised power imbalance between franchisors and franchisees. The same goes for news media businesses and social media platforms.

Facebook’s public response focuses largely on the exchange of money for news content but the ACCC code is much broader than that; it’s not just a way for news media businesses to be paid. It recognises Australian news content on social media platforms provides value to both sides and any resulting payment is simply a net of that value.

On the other hand, Facebook has suggested it will have to pay for every bit of news that appears on its platforms. In fact, the code allows for the private values of each news media business to be revealed during negotiations, which may end up in a price that is actually very low for Facebook, or even free.

The ACCC allows for both the news media businesses and platform businesses to negotiate, but Facebook’s threat today suggests they are in no mood for negotiation.

A blanket ban

If Facebook sticks to its claims, it would need to implement a blanket ban on all Australian news media businesses.

This proposition isn’t compelling because it means no news at all. And then there’s the issue of fringe news and information sources.

You could argue citizen journalists and amateur news content creators aren’t media businesses, so you’ll still have them – but they won’t have the checks and balances in place required by the media industry.

Sources such as QAnon actively and deliberately spread misinformation and will also remain. These sources could cause irreparable damage if they go unchecked or without any reliable rebuttal.

A calculated, commercial response

Facebook’s position is a commercial one and presumably has been carefully thought through.

To the extent Facebook fails to go ahead with the threat of removing all news for Australian users, the platform will inevitably be captured by the ACCC code.

If they were to post news without paying, the ACCC would likely come down on Facebook. The penalties could be as high as 10% of Facebook’s annual revenue in Australia.

What about Facebook News?

Facebook News offers news content from approved publishers (who are paid), collated for users to consume within the Facebook platform. The service launched last year in the US and could have been a viable option for Australia’s news media businesses.

But this service wasn’t offered early enough to Australia. The current debacle is a result of both Facebook and Google holding back in negotiations when there could have been a voluntary code of conduct much earlier.

Voluntary codes are non-mandatory sets of standards that aim to help organisations such as industry associations deal with their members and customers. They only apply to those who sign up to them.

Initially, the ACCC was directed to try to negotiate a voluntary code and the change to a mandatory one was driven by the failure of these negotiations.

It’s Facebook’s failure to make a sensible offer early enough that has landed it in this position.

At the end of the day, if Facebook follows through on its threat, we’ll end up with a platform that is much less appealing. More than anything else, that’s likely to drive the decline of Facebook.




Read more:
In a world first, Australia plans to force Facebook and Google to pay for news (but ABC and SBS miss out)


The Conversation


Rob Nicholls, Associate professor in Business Law. Director of the UNSW Business School Cybersecurity and Data Governance Research Network, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Facebook and Google used to be the future of news. But now media companies need more strings to their bow



Kedar Dhond/Unsplash, CC BY

James Meese, RMIT University and Edward Hurcombe, Queensland University of Technology

Given the recent commentary about the reforms proposed for the news media sector, you would be forgiven for thinking Google and Facebook are the only game in town.

The planned reforms arose from last year’s Digital Platforms Inquiry by the Australian Competition and Consumer Commission (ACCC), which focused squarely on the corporate behaviour of these two tech behemoths.

It is clear Google and Facebook will be the first platforms regulated under the draft mandatory code that will potentially force them to pay for content produced by Australian news media companies. The move is a response to what the ACCC describes as “a significant bargaining power imbalance […] between Australian news media businesses and Google and Facebook”.

This idea that news companies are essentially stuck with Google and Facebook, for better or worse, is a common view. Yet while that might have been true a few years ago, media companies are realising there are other ways to cultivate readers, and there’s no need to be beholden to tech platforms that generate clicks but don’t want to pay for the privilege.

In the mid-2010s, many news companies seemed to follow Facebook’s every move. When Facebook promoted video, the media invested in video. When it down-ranked clickbait headlines, content writers frantically altered their style to maintain their presence in the news feed. Newsrooms have had a similarly dependent (albeit less direct) relationship with Google.

The focus on adapting to Google and Facebooks’s algorithms completely changed newsroom practices over the past decade, as journalists have weighed editorial considerations against audience metrics.

Is this still the case?

This dependency developed at a time when major platforms, particularly Facebook, were engaging substantially with the distribution of news. But in recent years this trend has declined, as governments have begun to regulate platforms in response to concerns over “fake news”.

Facebook performed perhaps the most public pivot, changing its algorithm in January 2018 to promote content from users’ friends and family. As a result, traffic to news sites fell, leaving profit-starved media companies to pursue alternative strategies or simply lay off staff.




Read more:
‘Suck it and see’ or face a digital tax, former ACCC boss Allan Fels warns Google and Facebook


In our research, published earlier this year, we spoke to 15 Australian journalists and editors who had collectively worked across 11 media companies after the dust had settled from the 2019 crisis.

We asked them whether their companies still depend on Facebook for traffic, or whether they have moved to other platforms, or are now doing something else entirely to cultivate their readership.

Breaking up with Facebook

Many respondents, particularly those who had worked at newer companies focused on social media, revealed they had followed the demands of the Facebook algorithm at times. They had pivoted to video and had focused on share counts. However, respondents working at older media companies also noted that lots of readers still visited their publication’s home page, which challenges the idea that companies depend totally on Facebook.

Companies were also exploring different ways of generating revenue. These included placing ads inside content (known as native advertising) and holding events.

The standout trend, however, was a renewed focus on subscriptions, ensuring that a certain percentage of readers actually paid money for the news product at some point.

The Conversation (which does not charge for access to its content) was one of the newsrooms that saw a steep drop in traffic as a result of the January 2018 algorithm change. As such, it has pivoted its digital strategy to prioritise the channels over which it has the most control, particularly its daily newsletter.

That’s not to say companies have stopped trying to engage with big platforms. Many are consciously trying to make their news easy to find via Google search (a process called search engine optimisation. Some companies (including The Conversation) have also begun distributing news through Instagram (which is owned by Facebook).

Yet although the big platforms are doubtless here to stay, our research reveals a distinctly changed relationship between news and social media, compared with the past decade. Many companies, particularly newer ones like Buzzfeed and Vice, previously built huge audiences off the back of social media, and grew at a dizzying rate as a result. Now, companies are more interested in securing a stable revenue stream than in harvesting clicks.

The pandemic effect

This has become even more important amid the economic chaos caused by COVID-19. Advertising spending has dried up, leading to another round of media industry layoffs.

This suggests news media are still struggling to secure an alternative income stream to plug the hole in advertising revenue. The big question is whether big tech platforms will step in and help fill the gap by making financial contributions to news providers. Google’s current campaign against the draft mandatory code suggests they are deeply unwilling to do this.




Read more:
Google’s ‘open letter’ is trying to scare Australians. The company simply doesn’t want to pay for news


Our research shows the relationship between news media and big tech platforms is far from straightforward. This is supported by a recent survey, which found that while many young people access news through social media, older people still prefer television or news websites. Not every Australian gets their news via social media.

There may come a time when platforms become the central access point for news, but it hasn’t happened yet. This doesn’t mean the ACCC should abandon platform regulation, but it does mean news companies are probably wise to find other ways of reaching their readers while they still can.The Conversation

James Meese, Research fellow, RMIT University and Edward Hurcombe, Research associate, Queensland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

ABC has for too long been unwilling to push back against interference – at its journalists’ expense



Wes Mountain/The Conversation, CC BY-ND

Denis Muller, University of Melbourne

For those who watch the affairs of the ABC through the eyes of a critical friend, the removal of Emma Alberici, made public on August 21, is deeply disturbing.

It is the climax to a destructive series of events that began more than two years ago and once again draws attention to two serious weaknesses in the ABC’s management arrangements.

One is structural: the editor-in-chief is fatally compromised in that role by also being managing director. The managing director has corporate responsibilities that conflict with his or her editorial responsibilities every time the government tightens the financial screws.

That is not a reflection on David Anderson’s character or probity; it is the inevitable consequence of having the one person in both roles.

It also happens that Anderson – like his ill-fated predecessor Michelle Guthrie – is not a journalist. This makes it hard for him to give the kind of editorial leadership the ABC requires.




Read more:
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The second weakness is cultural. This long pre-dates Anderson’s term and is the product of sustained hostility from successive Coalition governments going back to the start of the Howard prime ministership in 1996.

The preceding 12 years of the Hawke-Keating governments had hardly been a golden age for the ABC, but it generally got year-on-year funding increases.

And in the tough-minded minister for communications, Michael Duffy, it had a defender in cabinet who was prepared to confront Hawke and other ministers infuriated by some of the ABC’s reporting.

As for the three years of the Rudd-Gillard-Rudd interlude, Labor was too busy tearing itself to pieces to bother with the ABC.

Former Prime Minister John Howard
Concerted government attacks on the ABC began under John Howard.
Mark Graham/AAP

Now, according to Anderson, after six years of cumulative budget cuts by the Abbott-Turnbull-Morrison administrations, the total effective reduction in ABC funding will amount to A$105.9 million per year by 2022.

And as for defenders in cabinet, the present communications minister, Paul Fletcher, is as mute as a swan.

Clearly all this has sapped morale.

In September 2018, a dossier compiled by Michelle Guthrie was leaked, revealing an email in which Justin Milne, as chair of the ABC, told her to get rid of Alberici, declaring the government “hate her”.

Over the preceding months, the government had repeatedly criticised stories Alberici had done in her role as chief economics correspondent.

Guthrie’s dossier came to light in The Age and Sydney Morning Herald at a time when the ABC had decided to sack her. In the ensuing “firestorm” – Milne’s word – he was consumed as well.




Read more:
ABC inquiry finds board knew of trouble between Milne and Guthrie, but did nothing


Milne had been concerned also with the work of political editor Andrew Probyn. He wanted Guthrie to “shoot” Probyn because the government hated him too and his continued presence was putting at risk half-a-billion dollars in funding for the ABC.

Assuming Milne and Guthrie were telling the truth, there could not be a clearer instance of how the government was using funding to undermine the ABC’s editorial independence.

The effects of this sustained intimidation are felt a long way down the ABC’s editorial food chain.

In May 2018, Barnaby Joyce accepted a reported $150,000 fee to appear with his lover on Channel Seven and talk about the affair that ended Joyce’s marriage and was a breach of the ministerial code of conduct. The ABC asked me to write a commentary on it.

I filed an article saying Joyce’s decision to take money for telling a story that concerned his public duties called into question his fitness for public office.

There was an awkward response from within the ABC indicating some disquiet further up the line. Would I mind not saying that about Joyce?

The rest of that exchange was off the record, but suffice to say I minded very much and withdrew the article. It later appeared unchanged in The Conversation and The Age.

That incident – small in itself but large in principle – revealed a malaise in editorial leadership at several levels.

Four months later came the revelations in Guthrie’s dossier about Milne’s attempts to have Probyn and Alberici sacked. It seems reasonable to infer word was filtering down from the top that if the ABC wanted to avoid yet more trouble from the government, it had better mind its manners.

Former ABC chair Justin Milne and former managing director Michelle Guthrie
Justin Milne told Michelle Guthrie to sack Emma Alberici and Andrew Probyn because the government hated them.
Joel Carrett/AAP

Alberici is now gone anyway, part of a wave of 200 redundancies announced by Anderson in June in response to the latest round of budget cuts.

It is clear from a leak of correspondence between her lawyer and the ABC the parting was anything but amicable, having finished up in the Fair Work Commission.

Her position as chief economics correspondent had been abolished and she was offered positions as a presenter. Alberici tweeted she wanted a reporting job.

So the ghosts of Justin Milne, Malcolm Turnbull and Michelle Guthrie continue to haunt the ABC.

The board that presided over the Milne-Guthrie implosion is still largely intact, despite having come out badly from a Senate inquiry into that debacle.

The committee of inquiry said:

This catalogue of events may give rise to the perception that the ABC Board had not been sufficiently active in protecting either the ABC’s independence from political interference or its own integrity.

And the structural and cultural weaknesses laid bare by the saga remain.

The strategy the Howard government developed for dealing with the ABC – funding cuts, pointless inquiries and cultural warfare – is being followed to the letter by the present government.

2017 was a vintage year, and sums up the problems:

  • Abbott’s cuts from three years earlier were working their way through the system

  • Pauline Hanson, smarting from a Four Corners investigation, secured a promise from the government to hold an inquiry into whether the ABC and SBS operated on a “level playing field” (Answer: yes they did)

One of history’s many lessons is that appeasement does not work. Editorial executives have one over-riding responsibility: to provide a safe environment in which their staff can do independent journalism, regardless of corporate, political or economic interests.




Read more:
Why the ABC, and the public that trusts it, must stand firm against threats to its editorial independence


Part of that is having the professional experience to understand what is involved, which includes absorbing the bullying that comes from powerful people and, where necessary, hitting back.

There has been no sign the ABC’s journalists have been getting that kind of protection, least of all from the board.

Instead, they are at the mercy of a vindictive government, urged on by its mates in News Corporation, which has a vested interest in weakening the ABC and shamelessly campaigns for exactly that.

The original version of this article contained a reference to an email concerning the coverage of marriage equality on the ABC. The author has subsequently learnt more about the origins and context of that email and acknowledges that the context as presented in the original article was wrong. That passage has been removed.The Conversation

Denis Muller, Senior Research Fellow, Centre for Advancing Journalism, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.