Tuesday 27 September 2016

Newspapers are the lifeblood of national discourse - Removing VAT would honour this

Published 08/03/2016 | 02:30

In the centenary of 1916, newspapers represent a special kind of Irish identity that is worth supporting. That is why the Irish Government should emulate the Norwegians and abolish the VAT rate on newspapers. Stock image
In the centenary of 1916, newspapers represent a special kind of Irish identity that is worth supporting. That is why the Irish Government should emulate the Norwegians and abolish the VAT rate on newspapers. Stock image

During the 1916 Rising, people relied on the newspapers of the day to give them detailed and vivid accounts of the Easter Rebellion. This is why most of the newspapers are now issuing souvenir 1916 supplements reproducing these exciting and memorable reports.

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The suddenness of the insurrection meant that the professionalism and experience of newspaper journalists was particularly called on.

In the hundred years since the Rising, newspapers have continued to play this role, despite the many challenges they face.

And right now these challenges are numerous and accelerating - with the growth of social media and TV, the huge amount of choice of other distractions such as Twitter or Facebook and the many other sources of news, which are usually available free.

Granted, the newspaper industry could have worked out a paywall principle from early on, but that was then.

Newspapers believed that readers would continue to buy their titles out of trust and loyalty, and would continue the relationship online, which they certainly do.

People want a credible and reliable source of news and comment, but they also want a service that is essentially home-grown and that has a cultural history and hinterland with which they are familiar.

In the centenary of 1916, newspapers represent a special kind of Irish identity that is worth supporting and celebrating.

And that is why the Irish Government should emulate the Norwegian government in abolishing the VAT rate on newspapers.

The Scandinavian country has just slashed tax on all news publications, so as to encourage a diverse and healthy media sector.

By cutting VAT in the hospitality sector, the Irish Government boosted our tourism - it should do the same with the media.

Another reason the Government should do this is that it already allows a serious distortion in the market by letting RTÉ, which has direct State support, offer a full news website, which is a direct rival to those of the newspapers.

The RTÉ website is a further distortion to the unfair advantage RTÉ already has in the television sphere. The broadcaster receives all of the TV licence fee, a tax we pay for a 'public service aspect' that many of us would have difficulties finding sometimes, considering the summer shutdown and the bought-in foreign TV shows.

In fact, many would feel that our newspapers offer a better 'public service'.

In the UK, the BBC has to rely on the licence fee alone. But RTÉ is having it both ways, and gets the licence fee and ad revenue. It thus drives down the price of advertising, thereby - once more - unfairly hitting competitors such as TV3 and UTV.

RTÉ can effectively cross-subsidise from the licence fee and continue to run large deficits, as it has done for many years.

The licence fee is a tax that goes towards just one TV station - in an era when people have a choice of dozens. We already pay Virgin or another provider for our TV, usually bundled with our broadband. So why should we have to pay again?

In tune with this change, the Government is planning to replace the licence fee with a wider broadcasting charge, but it is unclear how the proceeds would be distributed among other media suppliers, and the proposal has been long-fingered for fear of offending the public with another tax, even in revised form.

However, the newspapers would presumably not be the recipients of any of this broadcasting charge, despite punters going to newspaper websites as quickly as they go to RTÉ.

This is unfair, just as it is unfair that RTÉ can blur the lines between State service and the commercial realm. The RTÉ website, for example, is supposed to be the website of our public service broadcaster, focusing on this special remit. But the site is full of advertising: for cars, jobs, holidays, property and dating services.

The State broadcaster now has an unfair market advantage over both private TV and over national newspapers.

It is unlikely that any government will reverse this, or discontinue the State props for RTÉ.

However, in the meantime, to compensate for this distortion, the Government might at least consider lifting the punitive tax rates on other media.

Our newspapers are our national archive. They are the lifeblood of our national discourse and society. Removing the VAT rate - as the Norwegians have done - would be one way to support such a national asset and vital resource. It would also make amends for the unfair market disadvantage to which the RTÉ licence fee already subjects them. Now that would be a public service.

Irish Independent

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