Ellis deserves credit for mapping an urgent problem. His 48-page analysis reveals how newspaper closures correlate with reduced civic engagement, higher corruption rates, and weakened democratic participation. The data is extensive, the international scope impressive.
Where the report falters is not in diagnosing the disease but in prescribing the cure. Ellis puts forward a long menu of options for government intervention – funding schemes, tax credits, infrastructure platforms, and obligations for state advertising in local outlets. His analysis faces several challenges: dismissive treatment of legitimate concerns raised by New Zealand’s experience with the $55 million Public Interest Journalism Fund, questionable assumptions about market failure, and weak international evidence for subsidy effectiveness.
The PIJF’s real lessons
Ellis describes criticism of the PIJF as a “disinformation campaign.” This mischaracterises legitimate concerns about the fund’s design and consequences. The problem wasn’t imaginary bribery but the structural risk created when government funding comes with political conditions.
The fund required recipients to commit to specific political interpretations and policy positions as eligibility criteria. Whatever the merit of those positions, requiring journalists to affirm particular viewpoints to access taxpayer money creates obvious independence concerns. The problem isn’t the content of the conditions but the principle of conditioning media funding on political alignment.
This created a form of state capture – where government effectively controls an industry through funding conditions. Even outlets that didn’t receive funding understood they needed to maintain positions acceptable to funders to remain eligible. As I wrote in the Herald earlier this year, the result was predictable: trust in media fell from 53% to 45% during the fund’s operation.
Market evolution, not failure
Ellis frames journalism’s decline as market failure requiring correction. But markets adapt to consumer preferences. If people increasingly choose different information sources, this may reflect changing needs rather than collective delusion.
The report notes New Zealanders show high interest in local news but low willingness to pay for it. This “paradox” might simply mean people value local information but not the particular bundle traditional outlets offer. Facebook groups, community blogs, and WhatsApp networks may serve neighbourhood connection better than we realise.
Modern audiences increasingly bypass traditional media for social networks, podcasts, and direct sources. This shift may reflect rational preferences rather than market failure requiring correction.
The correlation problem
Ellis’s report suffers from another weakness common to policy advocacy: confusing correlation with causation. Yes, areas without newspapers show higher corruption and lower civic engagement. But this doesn’t prove that creating subsidised outlets will restore civic health.
Perhaps both newspaper closures and civic dysfunction reflect deeper changes in how communities function and citizens engage with public life. The report acknowledges that “institutional trust is in short supply, affecting both media and governments.” But it doesn’t seriously consider whether declining trust drives both media failure and democratic problems. If citizens don’t trust institutions, subsidising one institution to monitor others may not restore civic engagement.
International evidence
Ellis catalogues government media interventions worldwide but provides little evidence they’ve solved democratic problems. Canada spends millions on journalism tax credits. Ireland has launched democracy reporting schemes. Sweden heavily subsidises newspapers. Yet none show measurably improved civic participation.
Nordic countries supposedly exemplify successful media support. But these societies achieved high civic engagement and low corruption long before current subsidy schemes. Their success likely reflects deep cultural factors that can’t be replicated through journalism funding.
Moreover, even subsidised European newspapers struggle with the same technological forces disrupting New Zealand media. Government money may delay closures but hasn’t solved the fundamental challenge of connecting with modern audiences.
A different path
Ellis's menu does include some healthy choices that avoid the pitfalls of state funding. Relaxing charitable status rules for community journalism would remove barriers without creating dependence. Philanthropic funding could support outlets without political interference.
These targeted approaches work through civil society rather than state bureaucracy. They diversify funding sources instead of concentrating risk in political decisions about eligibility and conditions.
The distinction matters because any government funding scheme faces an impossible choice. Either it’s so broad that profitable companies receive windfalls, or so targeted that conditions inevitably creep in. The PIJF chose targeting and got political conditions. Future schemes would face identical pressures.
Professional journalism serves vital democratic functions, and local democracy deserves better than news deserts. But it also deserves better than subsidised journalism whose independence becomes negotiable. The cure must not prove worse than the disease.
Roger Partridge is chairman and a co-founder of The New Zealand Initiative and is a senior member of its research team. He led law firm Bell Gully as executive chairman from 2007 to 2014. This article was first published HERE
The PIJF’s real lessons
Ellis describes criticism of the PIJF as a “disinformation campaign.” This mischaracterises legitimate concerns about the fund’s design and consequences. The problem wasn’t imaginary bribery but the structural risk created when government funding comes with political conditions.
The fund required recipients to commit to specific political interpretations and policy positions as eligibility criteria. Whatever the merit of those positions, requiring journalists to affirm particular viewpoints to access taxpayer money creates obvious independence concerns. The problem isn’t the content of the conditions but the principle of conditioning media funding on political alignment.
This created a form of state capture – where government effectively controls an industry through funding conditions. Even outlets that didn’t receive funding understood they needed to maintain positions acceptable to funders to remain eligible. As I wrote in the Herald earlier this year, the result was predictable: trust in media fell from 53% to 45% during the fund’s operation.
Market evolution, not failure
Ellis frames journalism’s decline as market failure requiring correction. But markets adapt to consumer preferences. If people increasingly choose different information sources, this may reflect changing needs rather than collective delusion.
The report notes New Zealanders show high interest in local news but low willingness to pay for it. This “paradox” might simply mean people value local information but not the particular bundle traditional outlets offer. Facebook groups, community blogs, and WhatsApp networks may serve neighbourhood connection better than we realise.
Modern audiences increasingly bypass traditional media for social networks, podcasts, and direct sources. This shift may reflect rational preferences rather than market failure requiring correction.
The correlation problem
Ellis’s report suffers from another weakness common to policy advocacy: confusing correlation with causation. Yes, areas without newspapers show higher corruption and lower civic engagement. But this doesn’t prove that creating subsidised outlets will restore civic health.
Perhaps both newspaper closures and civic dysfunction reflect deeper changes in how communities function and citizens engage with public life. The report acknowledges that “institutional trust is in short supply, affecting both media and governments.” But it doesn’t seriously consider whether declining trust drives both media failure and democratic problems. If citizens don’t trust institutions, subsidising one institution to monitor others may not restore civic engagement.
International evidence
Ellis catalogues government media interventions worldwide but provides little evidence they’ve solved democratic problems. Canada spends millions on journalism tax credits. Ireland has launched democracy reporting schemes. Sweden heavily subsidises newspapers. Yet none show measurably improved civic participation.
Nordic countries supposedly exemplify successful media support. But these societies achieved high civic engagement and low corruption long before current subsidy schemes. Their success likely reflects deep cultural factors that can’t be replicated through journalism funding.
Moreover, even subsidised European newspapers struggle with the same technological forces disrupting New Zealand media. Government money may delay closures but hasn’t solved the fundamental challenge of connecting with modern audiences.
A different path
Ellis's menu does include some healthy choices that avoid the pitfalls of state funding. Relaxing charitable status rules for community journalism would remove barriers without creating dependence. Philanthropic funding could support outlets without political interference.
These targeted approaches work through civil society rather than state bureaucracy. They diversify funding sources instead of concentrating risk in political decisions about eligibility and conditions.
The distinction matters because any government funding scheme faces an impossible choice. Either it’s so broad that profitable companies receive windfalls, or so targeted that conditions inevitably creep in. The PIJF chose targeting and got political conditions. Future schemes would face identical pressures.
Professional journalism serves vital democratic functions, and local democracy deserves better than news deserts. But it also deserves better than subsidised journalism whose independence becomes negotiable. The cure must not prove worse than the disease.
Roger Partridge is chairman and a co-founder of The New Zealand Initiative and is a senior member of its research team. He led law firm Bell Gully as executive chairman from 2007 to 2014. This article was first published HERE
6 comments:
What exactly were the terms that most of the media signed up for in their secret PIJF contracts with Ardern ?
Don't tell us that it was a commercial confidential deal.
It was outright bribery to media that were under stress during Covid, and willing editors happy to indulge their leftist dreams.
It was an outright lie to tell the nation and the world that the Treaty was a partnership agreement.
As a consequence, many unthinking NZers have been indoctrinated into believing that was true.
Eternal shame on the media, Goebbels would be proud of you.
The terms were public but the recipients were very coy about publicising so few learned of them. Not hammered on RNZ as should have been. Continued running recently and maybe still.
As I recall Robert, at the time, it was suggested that PIJF applicants include in their submissions that they agree that the Treaty was a Partnership, that their were Treaty Principles, and that they would promote everything Maori.
What was written into the secret contracts ?- never made public - a commercial deal, they said to hide it.
It was also implied that the funds would be given as a form of loan that could be rescinded, and repaid if the media did not comply with the above 3x Ps.
From memory there was another $50 Million paid to the media purely for Covid support. On top of this large amounts of cash for advertising which seemed to have caveats around not accepting advertising on matters the previous Government didn't agree with.
Despite an interest especially in housing matters, I have only the vaguest grasp of the antics of the local Council. In Auckland. I know almost nothing about candidates. The Herald barely covers. Ditto the free papers, now discontinued. The situation is certainly grim. Information is simply not readily available. The regular Council publication is now merely a programme of frivolous entertainment events. If I was a maori I could attend some insurgency coordination centre (marae) and get the inside story from the Maori Statutory Body 5th columnists.The PIJF was a gallant step but the prescribed conditions were unbelievably political. Incredibly most of the recipients had the gall to deny them so very few of the public became aware of the situation. From radio interviews some recipients seemed not to have troubled to read the conditons.
Also corrupting our media, was the $330M given to the media during Covid, for all the covid messages broadcast and published in te reo Maori, on top of the hundreds of millions to sell Ardern's message about being kind, the sole source of truth, and the mandatory tracking scanning scam.
Sickening to hear her voice on the promotions for her book and the Jon Stewart Show recently.
Post a Comment