Your rates are paying News Corp $400k a year – by law

The local government sector is pushing to change an “outdated” state law that sees Adelaide ratepayers pay Rupert Murdoch’s News Corporation millions of dollars in compulsory advertising, in a new blow to the media company’s ailing suburban newspaper stable.

Jun 07, 2019, updated Jul 11, 2019
News Corp is facing a new challenge to the viability of its suburban newspapers. Photo: Tony Lewis / InDaily

News Corp is facing a new challenge to the viability of its suburban newspapers. Photo: Tony Lewis / InDaily

News Corp this week axed at least 10 editorial jobs from its Adelaide newsroom and plans to scrap the print edition of its suburban weekly flagship The City and free delivery of its Messenger mastheads to the northern suburbs, as revealed by InDaily yesterday.

InDaily has also revealed a failed bid by the media giant to persuade several councils to hand over at least $1.6 million over two years to keep the print run of its soon-to-be-defunct North Eastern Messenger afloat.

But that’s despite News Corp in SA being guaranteed an estimated $400,000 each year in advertising, mandated under the state’s Local Government Act, which stipulates a range of council decisions must be detailed in a public notice – at ratepayers’ expense – “in a newspaper circulating in the area of the council”.

These include annual business plans and budgets, rates declarations and variations, new service charges, the sale of land after rate defaults, assigning or changing the name of a road or public place, new policies or by-laws and the convening of public meetings.

The Local Government Association estimates SA’s metropolitan councils “collectively spend around $400,000 per year on notifications they are legislatively required to put in the newspaper”, with the vast majority of these placed in the local Messenger mastheads.

This also includes development notifications, the cost of which councils can recover from developers. However, individual council sources have told InDaily they believe the cost estimate to be extremely conservative.

The LGA has detailed its concerns in a submission to the Marshall Government’s review of the Local Government Act, demanding the purview of the audit is “broadened to also consider requirements… to publish various notices in newspapers”.

“Not only is publication in newspapers very expensive for some councils, it doesn’t necessarily reflect a contemporary approach to community engagement that is seeing some communities increasingly rely on internet-based and/or social media communication,” the submission says.

“Each community is different, so it is a matter of providing councils with greater flexibility to determine the communication methods that suit their community, including variability in levels of digital literacy, and the context of the matter at hand.”

In response to inquiries from InDaily, LGA President Sam Telfer said in a statement that “the past two decades have seen a lot of changes in how we access information and communicate with each other”.

“We believe the Act should be modernised to provide councils with more contemporary and cost-effective options for public notifications,” he said.

“Councils are increasingly using online platforms and social media to engage with their communities, supporting the interactive exchange of ideas.

“Every community is different, and councils should be able to tailor their communications using channels that will support better reach and meaningful engagement in their local area.”

News Corp itself appears to be moving towards a largely-digital platform for its suburban coverage, however its latest moves to limit the distribution of its Messenger mastheads has raised questions about whether the papers are adequately meeting the legislative requirement of “circulating in the area of the council”.

Last month, Port Adelaide Enfield councillor Mark Basham successfully moved a motion calling on that council’s administration to provide details of its advertising budget, including “the amount spent specifically where required to under various pieces of legislation, and the current distribution of the Messenger Press papers in our council area”.

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“I was concerned council was spending money on advertising in the Messenger Press which was not reaching our ratepayers,” Basham wrote on his Facebook page today, noting home delivery in his Northfield ward had already long since ceased.

“Not only is this situation sad for local residents, missing out on local news, but for the future of young South Australian journalists,” his post said.

The LGA is also likely to raise the matter with an ongoing Productivity Commission inquiry into local government spending and transparency established by minister Stephan Knoll last month.

Knoll appears open to removing the advertising impost – to a point.

He told InDaily in a statement that the Government “is currently undertaking a comprehensive reform of the local government sector to improve transparency, accountability, slash red tape and help deliver lower cost for ratepayers”.

“We are working closely with the local government sector on these reforms and if this [mandatory advertising] requirement is placing an unfair regulatory or cost burden on councils then we will happily take their feedback on board,” he said.

“However, that will have to be weighted against the impact it could have on the community… many people, especially in regional South Australia, rely on these notices in their local papers to stay informed.”

The sector’s push to save ratepayers’ cash comes after a sustained News Corp campaign to make councils more accountable with public spending and transparency.

InDaily has sought comment from News Corp SA general manager Ish Davies as to whether the company would support amending or scrapping the mandated advertising requirement.

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