How very fortunate for Peter
Costello to have News Ltd’s lawyers around to explain what the
government’s foreign investment guidelines really mean. Otherwise the
Foreign Investment Review Board might make a mistake – and Rupert
wouldn’t be pleased.
Last night’s Media Watch
tackled the strange business of how the now 100% foreign owned and
controlled News Ltd can launch a new newspaper in Australia in clear
breach of the treasurer’s foreign investment policy.
control of most of the country’s newspapers was grandfathered when the
present mishmash of foreign and cross-media ownership rules were
introduced by the Keating Government in 1993. But the little oddity in
those rules is that a newspaper’s “foreignness” is only the
“non-portfolio” part of the shareholding, so in News Corp’s case, only
the Murdoch and Malone interests were counted as foreign when News Corp
was nominally an Australian company. Murdoch’s lawyers also managed to
convince FIRB to count both the voting and non-voting shares as
controlling capital, despite the non-voters obviously not having
control – which is why Murdoch issued them.
But what happened
when News Corporation became a totally foreign entity last year? After
all, News Limited is now owned by a 100% non-portfolio foreign investor
– News Corp.
Media Watch quoted the relevant bit of the treasury’s policy document that FIRB guidelines ( here) apply to:
“All proposals by foreign interests to acquire an interest of 5% or
more in an existing newspaper or to establish a new newspaper in
Why then is this foreigner allowed to launch a new newspapers when
another foreigner – Spaniard Javier Moll – is being prevented from
launching a daily newspaper in Adelaide in competition with America’s
Last year when I was grappling with the non-portfolio issue and the strange treatment of the Moll family for Sunday Sunrise,
FIRB wouldn’t talk and directed all questions to Costello’s office
where a flack who clearly didn’t know suggested I contact News Corp.
The flack was right – much wiser to ask the organ grinder than the
It looks like Media Watch had the same problem, turning to News Ltd’s lawyers for this quote:
“MX is not subject to consideration under
the government’s foreign investment policy. The relevant policy applies
to the establishment of a new business. It does not apply to the
expansion of an existing business. The reference to a new newspaper in
clause 34 of the policy summary is a reference to a new newspaper
What News really means is that the words “new newspaper” don’t mean
“new newspaper” – they mean “new competitor with Murdoch interests.”
And the federal government wouldn’t want that.
Meanwhile, back in Adelaide where Rupert’s empire started, Javier Moll was allowed to buy the monthly Adelaide Review, and even received FIRB permission to take it fortnightly last year as long as it doesn’t carry “news.” Murdoch’s Advertiser has thrown everything but the kitchen sink at the upstarts, launching its own review insert and slashing advertising rates.
is left to fight with both hands tied behind his backs. He wants to
start a daily in Adelaide first, then in that other Murdoch monopoly
newspaper town, Brisbane. Maybe he should try hiring Murdoch’s lawyers.