So what’s the latest on the story that won’t go away — the News International phone-hacking scandal, and resulting fallout.

Local news first.

Australian Press Council chair Julian Disney has announced that two retired Supreme Court judges, the formidable Bernie Teague and Frank Vincent, will oversee News Limited’s internal audit of its editorial expenses.

Negotiating the appointment of these two is a significant feather in the cap of Disney and his Press Council reform efforts. Agreeing to it is also to the credit of News Limited’s CEO John Hartigan and executive Campbell Reid.

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It demonstrates determination to detect trouble if there is any, and to be seen to do so. Hartigan has learnt from the Melbourne Storm scandal, but is also clearly confident that there is no illegality to be detected.

Teague and Vincent are now consulting with News Limited on the methodology and process of the review, and because they are there we can have some confidence that it will be a genuine, rigorous and somewhat transparent process. There will also be a public report at the end.

The terms of the inquiry were previously published on my blog here.

Meanwhile, Hartigan and Prime Minister Julia Gillard have had a spat over her statement that the local arm of the empire will have hard questions to answer. She did not specify what those questions might be. You can read the full transcript of her remarks is on my blog. What she meant is far from clear.

Obviously it suits the government, which is under full on assault from New Limited titles, to cast generalised slurs on their credibility. In the absence of specifics, that is what this seems to be.

Hartigan responded with this statement, which adopts what is becoming a shop-worn tactic — suggesting that anyone who says that the Australian newspapers might have some problems too is unfairly trying to tarnish journalists with the News of the World brush.

In fact every serious commentator has been at pains to say that there is no culture of illegality in the Australian media, such as is found on Fleet Street.

But that doesn’t mean that all issues are answered. There is the continuing debate about invasion of privacy, which precedes this affair but is unresolved. There are the allegations of bias and playing political favourites. There are the allegations, which I raised yesterday, of inappropriate intervention in police politics.

There are the allegations (made by me) that journalists are not sufficiently aware of their ethical codes and obligations, and that media organisation managements, including but not only News Limited, have not done enough to tackle this.

And there are broader issues of corporate culture. In the past week I have been approached by News Limited employees making allegations on issues as broad as allegedly lax attitudes to workplace health and safety, restraint of trade and unfair dismissal. Whatever the truth of these allegations, it is undoubtedly the case that the focus on News Corporation’s culture internationally means that all aspects of its local operations are up for increased scrutiny. Whether Hartigan likes it or not.

It is unfair that the same focus is not also being trained on other media organisations, because they too have questions to answer. And eventually there will doubtless be flow-on effects. But of course the focus is presently on News International, and that is inescapable.

Underlying all these issues there is the stark reality that whether Murdoch and his underlings are saints or sinners is not really the issue. The problem is in the Australian contest that they hold too much power. In the UK, Murdoch only controls a minority of newspaper circulation. Here, it is about 70%, and a monopoly in several capital cities.

That is far too much power, and the blame can be sheeted home to governments over the past 30 years.

The knowledge of this means that the political class and those who care about such issues will naturally seize on any opportunity to question and peg back that power. The present circumstances offer a pretty big window of opportunity and it is unrealistic to expect people not to rush for it.

To overseas news. Last night a fair proportion of Australia’s politicians and journalists would have been watching British Parliament on ABCNews24. It was an educative experience in many ways. As the Twitter stream commented, the special session on News of the World was much healthier and more effective than anything you are likely to see in our parliament. There were real questions, and real and brief answers from Prime Minister David Cameron.

My goodness, their parliament actually works. It will be interesting to see if there is any impact on local practice.

(But of course we should not forget past UK scandals over expenses and payment for votes).

ABC managing director Mark Scott even tweeted that we should get the speaker to Australia on exchange, only to be mockingly slapped down — “I think not — ORDER” — by a “fake” Speaker.

And because the UK parliament works, we were easily able to see that Cameron would not frankly answer questions about discussions he had with News International executives about the BSkyB bid. So more boots to fall in that direction, I suspect.

Most significant of all, News International has announced that it will stop the truly shocking business of paying private eye and convicted criminal Glenn Mulcaire’s legal expenses. He is the man at the centre of the scandal, the one who knows most, the one who hacked the murdered girl’s phone. The fact that his legal expenses were being paid was the most shocking revelation to come out of Tuesday’s appearance by the Murdochs before the  British parliamentary committee.

It looked like hush money, to keep Mulcaire, who has already served time in jail, silent. Now we will find out if that perception is correct.

As well, News International has released its lawyers from their obligations of client confidentiality. These are the lawyers who for years sat on the apparently damning file of emails, now found by another parliamentary committee to have contained very clear evidence of illegality.

Fair to expect that with their own reputations to protect, they will be prepared to tell their own side of the story, including why they wrote a letter apparently saying that there was no evidence of wider problems.

Other developments: US media analyst Porter Bibb last night told ABC Lateline that the reason the News Corporation share price rose on Tuesday was nothing to do with the Murdochs’ performance before the parliamentary committee, but was merely in line with a general rise on Wall Street.

Investor reservations about Rupert, and the Murdochs more generally, remain, according to him.

In short, it is clear that the parliamentary appearance was not the end of matters, but merely the trumpet blast at the beginning.

The main outcomes? The revelation that Rupert Murdoch has lost his touch. The pulling back of the curtain that concealed the Wizard of Oz.

The main fallout? It is clear, I think, that one way or another the era of Rupert Murdoch is over. We have yet to see what role his family will play in News Corporation in the future.

Be clear about this: if Rupert goes, then the future of the newspapers that form part of his empire is far from certain. Sell-offs and closures, including in the Australian arm, are certainly possible.

And that would trigger an urgent focus on the bigger crisis facing the sustainability of journalism, because we all know that Fairfax is in dire straits.

The media world is shifting on its axis, not least in Australia.

I subscribe to Crikey because I believe in a free, open and independent media where news and opinions can be published that I can both agree with and be challenged by.

As a Crikey subscriber I always feel more informed and able to think more critically about issues and current affairs – even when they don’t always reflect my own political viewpoint or lived experience.

Jess
Singapore

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