NEWS MEDIA ACT Petition For Partial Repeal

Press, Volume CVI, Issue 31129, 4 August 1966, Page 3

NEWS MEDIA ACT Petition For Partial Repeal

(Parliamentary Reporter) WELLINGTON, August 3. A petition asking for the repeal of subsections 1 and 2 of section 3 of the News Media Ownership Act was presented in Parliament today by Mr W. A. Fox (Opp., Miramar).

The petitioner, Duncan Campbell, a journalist, of Wellington, prays for the repeal of the sub-sections because they prevent private New Zealand citizens and overseas persons or corporations from establishing or operating a private broadcasting station and from publishing a newspaper. The petitioner also prays “that these provisions are unduly oppressive in that

they interfere with the right of private New Zealand citizens to begin business enterprises in the same manner as newspaper companies such as Wilson and Horton, publishers of the “New Zealand Herald,” Auckland, and Blundell Brothers, publishers of the “Evening Post,” Wellington, were established.

“By preventing overseas persons or bodies corporate from establishing newspapers, the News Media Ownership Act, 1965, displays a fear of the competition which spokesmen for the Government have indicated that they wish to encourage because, they say, competition is in the public interest “If existing New Zealand newspapers are of the quality frequently attributed to them by overseas visitors, they have nothing to fear from competition from new newspapers established with overseas capital and by overseas interests.

“Expert witnesses who gave evidence on the News Media Ownership Bill to Parliament’s Statutes Revision Committee were agreed that it

would cost about £5 million to establish a newspaper in one of the main centres of population and that it was likely to be in operation for approximately five years before returning a profit. “The £5 million it would

cost to establish a newspaper would of itself discourage overseas interests from establishing a newspaper in New Zealand because of the inadequacy of the return it would yield. “A newspaper established at a cost of £6 million which made the same tax-paid profit as the “Otago Daily Times” in the year to January 31, 1966, as the Wellington Publishing Company in the year to September 30, 1965, or as Wilson and Horton in the year to March 31, 1966, would give its owners the following tax-paid yields on the investment: 17s lid per cent, £1 10s 9d per cent, and £5 7s 9d per cent. “The tax-paid profit of New Zealand Newspapers in the year to March 31, 1966, would represent a return of £8 9s 8d per cent on an investment of £5 million. This figure has been excluded from the examples listed because, besides operating two major daily newspapers, New Zealand Newspapers has extensive interests in other daily, weekly and monthly publications. For the same reason

Wilson and Horton's profit—made on a number of publications is considerably greater than that which could be expected from one newspaper. “Net tax-paid yields of 17s Ud per cent, £1 10s 9d per cent, or even of £5 7s 9d per cent on an investment of £5 million in a new newspaper would be reduced still further in its shareholders’ hands after adequate provision had been made for reserves and thus would be unlikely to be attractive to overseas investors. “Sub-section 1 of section 3 of the News Media Ownership Act is in any case unnecessary because no overseas company may establish in New Zealand an industry involving large capital expenditure without the consent of the Minister of Finance, who could reject its application to do so or who could impose such conditions on its establishment as he might consider to be appropriate, including a condition that New Zealand capital be taken into the enterprise at a specified stage of development.