Paul Goldsmith with his media plans at yesterday's media conference

In a move of breathtaking audacity, the Government agreed yesterday to have a Cabinet Minister preside over a media subsidy scheme.

The Minister will decide which media entities will be eligible to receive the proceeds of a levy the Government proposes to impose on Facebook and Google. (A spokesperson for the Minister has subsequently clarified that the Minister will not make the decision about which media entities receive funding but will direct digital platforms to begin negotiations with media companies.)

Communications Minister Paul Goldsmith said he expected the levy to raise between $30 and $50 million a year.

The decision to have the Cabinet Minister decide which media would get the money outraged ACT leader David Seymour, who invoked the coalition government’s “agree to disagree” procedures to vote against it.

The National Party’s own pollster, David Farrar, called the decision “unprincipled”.

 “I can handle principled stupid decisions and even unprincipled smart decisions, but this is neither,” he said.

“It is unprincipled because it is forcing successful companies in one industry (social networks and search engines) to fund failing companies in another industry (media).

“The only rationale for this is that Google and Meta have money, and Stuff doesn’t.

“Will we see Netflix levied money to fund home video rental stores?

“Will we see Foodstuffs levied money to fund Whitcoulls?”

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Other centre-right figures were equally condemnatory.

The New Zealand Initiative Chief Economist, Eric Crampton, tweeted on “X” in response to Farrar; “Sometimes, a mark of a good Minister is that he doesn’t progress something stupid, rather than pushing something stupid forward so that he can get the box-tick from the PM.”

The economist and commentator Michael Reddell tweeted: “They really are determined to provide another data point for Matthew Hooton’s observation that each successive MMP govt is worse than the one that went before it.”

However, the strongest opposition came from ACT, which, for the first time since joining the coalition, invoked the “agree to disagree” provision in the Cabinet Manual, which released it from the obligation to vote for the legislation to establish the levy.

“It is a sop; it’s the thing that you do when you don’t know what else to do,” ACT leader David Seymour said yesterday.

“I think the final straw for us was the proposal of greater ministerial involvement in deals between companies, the further politicisation or even the perception of it as with the Public Interest Journalism Fund, actually damages trust in media.

“We think it’s time actually for the government to go back to the drawing board rather than present the same solution that Melisaa Lee was presenting three months ago.”

In fact, Goldsmith’s proposal builds on a proposal that Willie Jackson presented to Parliament last year.

Because ACT will not support the legislation in the House, Goldsmith must now go to Jackson to get his support for it to be passed.

He said yesterday that he had already discussed it with the former Minister, but the Labour caucus would make the final decision on whether to support it.

But Jackson’s legislation established the independent Broadcasting Standards Authority as the body to administer the levy negotiations between media outlets and digital platforms.

Goldsmith proposes instead that power be with a minister, not an independent body, as in similar legislation in Australia.

“In Australia, it’s with a ministerial designation, and we think it’s appropriate to have a similar approach,” he said yesterday.

But even though he is proposing that the Minister have the power to decide who gets funding, he rejected the proposition yesterday that this amounted to ministerial control over who would get funding or not.

“It’s nothing to do with Government deciding who’s going to be funded. No, it’s not,” he said.

“The Minister is deciding whether or not a particular company will be designated under this regime.

“And, of course, the Minister’s not just going to make it up on the spot.

“It will be following a process and advice that the Minister receives.

“But ultimately, what we’re doing, what we’re trying to achieve here, is encouraging conversations to happen.

“And there’s a backstop, and it’s based on the Australian approach, which I think, as a general rule, we should try and be consistent across the Tasman if we possibly can.”

This whole announcement is riddled with ironies.

National refused to support Jackson’s Bill when it was introduced into Parliament last year.

Melissa Lee, National’s Communications spokesperson, asked why the Minister was bringing the bill in the First Reading debate last August.

“I guess it is an ideological thing,” she said.

“He wants to support his mates in the media.”

She described Labour’s Bill as a “shakedown”.

So what has changed?

“Well, we’ve been talking to the sector,” Goldsmith said yesterday.

“Generally, we’ve looked around the world.

“Various countries have attempted various regimes to deal with the whole issue of how to encourage conversations between very large multinational streaming companies and local media producers.

“And so, you know, we think on balance. This is a good way to go.”

In his cabinet paper introducing the legislation, Willie Jackson said he expected the existence of legislation to incentivise companies to reach arrangements outside the formal bargaining process it prescribes. 

“If private arrangements were not agreed within a certain timeframe after the legislation was passed (for example, six months), news media organisations could trigger a formal bargaining process (with the digital platforms),” the paper said.

“Unsuccessful bargaining within that process (for example, over a period of three months, or longer if agreed between parties) would lead to mediation to support parties to reach agreement.”

The paper said the legislation would apply to Google, Facebook, Twitter, Yahoo News, Reddit, TikTok, Snapchat, and any social media platform or internet browser that carried news.

An important omission is Artificial Intelligence (AI)- generated sites like Microsoft Start, which last night ran stories scraped from Newshub, RNZ, Metro, and the NZ Herald on its home page.

(Because POLITIK is behind a paywall, the digital platforms cannot access its stories)

In Opposition, National was a frequent critic of the NZ on Air-administrated Public Interest Journalism Fund, and even after the Government was formed, its coalition partner, NZ First, kept up that opposition.

NZ First leader Winston Peters claimed the media could not defend “$55 million of bribery”.

He demanded the press gallery “tell the public what you signed up to, to get the money”. He also questioned the independence of publicly owned media operators TVNZ and RNZ.

Despite that, the New Zealand First 2023 Manifesto said that the party would, in Government, require major global tech platforms like Google and Meta to support NZ journalism by paying a fair price for NZ-published content.

This did not make it into the coalition agreement, but even so, NZ First is the only coalition party which went into the election campaign supporting Labour’s proposed legislation.

National are late adopters.

But in picking up Labour’s proposal, they have done what they did with their adoption of Labour’s fast-track planning process: They have transferred the power from an independent panel or body to Ministers.

They have thus politicised what Labour had intended would be a non-political process.

Whatever would National in Opposition have said if Labour had done that?