Australians are accustomed to a much deeper and more diverse media landscape than New Zealanders. Across the ditch, the media ecosystem can be startlingly shallow. The challenges facing Kiwi journalism have been mounting for years, but recent events have brought them into sharp focus.

This autumn, Newshub, a major news provider for the country’s third-largest broadcaster, announced its closure. This followed cuts at TVNZ, the public broadcaster, which axed several current affairs programmes and laid off dozens of journalists.

These developments have sparked an intense debate about the future of journalism in New Zealand. This discussion should interest Australian observers given that media organisations worldwide face similar pressures.

The roots of the crisis run deep. New Zealand’s media sector has long been more fragile than Australia’s, with fewer major players and a smaller market. The digital revolution, which upended traditional business models, has hit Kiwi media particularly hard. As advertising revenues shifted elsewhere, many local outlets have struggled to stay afloat.

Covid exacerbated these structural weaknesses. In response, Jacinda Ardern’s Labour government established the Public Interest Journalism Fund in 2020. While well-intentioned, this initiative became controversial due to conditions that some saw as compromising journalistic independence.

As I have noted (Blurring boundaries: how Jacinda Ardern challenges journalism’s ethics, The Australian, 21 September 2022), the fund required recipients to actively promote the government’s interpretation of the Treaty of Waitangi. That raised serious concerns about media independence and public trust.

Recognising these issues, the Labour government, in its final days in office, proposed a new approach: the Fair Digital News Bargaining Bill. This legislation aimed to compel large digital platforms such as Google and Meta to pay for news content, similar to Australia’s News Media Bargaining Code. The Bill was presented as a way to support journalism without the political baggage of direct government funding.

The National Party, then in opposition, strongly criticised the proposal. Melissa Lee, then National’s broadcasting spokesperson, referred to it as a “shakedown.” National argued that the Bill would be ineffective and potentially harmful to New Zealand’s digital economy.

The October 2023 election brought a dramatic shift in New Zealand’s political landscape. But the new National-led coalition government, upon taking office, found itself facing the same media crisis it had criticised Labour for mishandling.

In a surprising turn of events, the new government, under Broadcasting Minister Paul Goldsmith, decided to proceed with a modified version of the Labour Bill it had previously opposed.

The U-turn was accompanied by significant changes to the Bill. Most notably, the new version gives the Minister of Broadcasting the power to designate which platforms fall under the legislation. This modification, far from improving the Bill, introduces new risks of political interference in media funding.

The irony of this situation is hard to miss. A Bill introduced by Labour and initially rejected by National is now being championed by a National-led government, in a form that potentially makes it more problematic. One can only imagine the outcry from National had Labour proposed such ministerial powers while in government.

This approach ignores the cautionary tale of Canada’s experience with similar legislation. When Canada implemented its Online News Act, Meta responded by blocking news content on its platforms entirely, a move that disproportionately affected smaller, independent publishers.

Moreover, the Bill misunderstands the value exchange between digital platforms and news organisations. Links and snippets, far from being theft, drive traffic and potential subscribers to news sites.

The potential consequences of New Zealand’s legislation are concerning. It creates a mechanism that resembles indirect government funding. As such, it risks undermining public trust in journalism and deterring digital innovation and investment in New Zealand’s tech sector. Arguably these risks are even greater than those posed by Jacinda Ardern’s Public Interest Journalism Fund.

The Bill’s flaws are likely to manifest in several damaging ways. First, major platforms may opt to block news content rather than comply. That would harm smaller outlets that rely on social media for distribution, thereby reducing media plurality.

Second, ministerial designation of platforms opens the door to political interference. Media organisations might feel pressured to provide favourable coverage of the government of the day to maintain access to this funding stream.

Third, the legislation could deter tech investment in New Zealand. Companies may view the country as risky if successful platforms can be compelled to subsidise other industries.

Finally, rather than solving the media crisis, the Bill may simply defer it. It does not address fundamental shifts in advertising, changing consumer behaviours, or emerging technologies like AI in content creation. If platform payments prove insufficient, the government may face pressure to intervene further, potentially creating a cycle of increasing state involvement in the media sector.

Minister Goldsmith appears to have fallen into the classic political trap of feeling compelled to “do something” in a crisis. The Fair Digital News Bargaining Bill is that “something” – a misguided attempt to fix New Zealand’s media woes that is unlikely to work.

The Bill risks damaging media independence, deterring tech investment, reducing plurality, and failing to address the root causes of the crisis. And it exemplifies how the impulse to intervene can lead to policies that exacerbate the very problems they aim to solve.

When in opposition, the National Party scolded the Labour Government for a plan that was less political than the current Bill.

Usually, there would be a media outcry over such political flip-flopping. That there is not tells us something about the state of the New Zealand media.

To read the full article on The Australian website, click here.