The Promised Land That Wasn’t: After Getting Link Tax, News Corp Australia Slashes 1,250 Jobs

Bill C-18 supporters love to look to Australia to say what the benefits link taxes are. They probably don’t want to talk about the waves of layoffs that ensued.

One of the ways that proponents of Bill C-18 sell Bill C-18 is this idea that the money derived from link taxes would be used to create a huge number of jobs and revitalize the entire journalism sector. Obviously, the numbers to support those claims never added up as even the rosiest of estimates falls wildly short of what is promised (i.e. paying as much as 35% of all expenses by the news sector). All the evidence pointed to a conclusion that the money was little more than a fraud used to trick people into believing that link taxes are this magical solution that will cure all of the industries woes.

Still, that hasn’t stopped some people from making the claims of pixie dust and unicorns powering this new magical era of journalism. So often, these supporters point to Australia as a model to the world and the massive amounts of prosperity that ensued in that sector. In fact, the sell job was particularly prevalent during the September 23rd hearing where Liberals and NDP MP’s were doing their best to play up these fabrications of a new era of journalism – so much so that they orchestrated a little bit of foreign interference with a big Australian proponent of their link tax law.

Comments suggested that the change was night and day and that there was a whole bunch of hiring in the sector. For proponents of Bill C-18, things have never looked better in Australia and pushing Bill C-18 was little more than replicating the overwhelming success and delivering Canadian media outlets to the promised land.

Of course, there is just one problem: this promised land is anything but. As it turns out, the media sector in Australia has seen massive amounts of layoffs. A large source of these layoffs are coming from the biggest beneficiary of the Australian News Bargaining Code (link tax), News Corp. From The Guardian:

News Corp Australia will cut one in 20 staff at its local operations after Rupert Murdoch’s global company posted a 47% decline in earnings in its news media division and lower quarterly revenue overall.

Mastheads the Australian, the Daily Telegraph and the Herald Sun are among those facing cost-cutting and a 5% headcount reduction after a decline in earnings for Murdoch’s international newspaper stable of US$59m.

The chief executive of News Corp, Robert Thomson, broke the news of a 1,250 jobs reduction after presenting the company’s second-quarter results in New York on Friday morning, Australian time.

The Australian News Bargaining Code has long been criticized (NSFW language) for tilting the market in favour of big media corporate monopolies. A majority of that money went to the biggest players while the smaller outlets made do with less. Yet, despite all of these overwhelming advantages, News Corp is issuing these huge layoffs anyway.

One thing that is striking in all of this is that this potentially offers a glimpse into the future of the larger media players. If the News Bargaining Code failed this hard, what shot does Canada have at not repeating these same mistakes? With the Canadian government bent on repeating the same mistakes in Australia and making even more in the process, such an outcome seems all but a sure thing even if the large media companies in Canada somehow manages to get everything they wanted. At the moment, that is looking increasingly unlikely.

So, you have financial benefits that don’t add up, there is the possibility that platforms will just not link to news sites altogether, and massive layoffs in the news sector in Australia where the Canadian government got its inspiration from for this bill in the first place. What’s more, Bill C-18 doesn’t ensure that the money taken from platforms is going to get directed to actual journalism jobs in the first place. In fact, there would be nothing stopping these large publishing corporations taking that money and using it to enrich hedge funds, shareholders, or CEO’s afterwards while not seeing a nickel go towards creating or maintaining journalism positions. The credibility of Bill C-18 has really become non-existent.

Drew Wilson on Twitter: @icecube85 and Facebook.

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