Australia is facing a critical shortage of local government news coverage as a result of the rise of tech titans like Facebook and Google, a report by the consumer watchdog warns.

The assessment by the Australian Competition and Consumer Commission (ACCC) comes after a report commissioned by the peak local government body in June found the availability of of local news in Australia had undergone a “sharp and worrying decline”.

The final report of the ACCC’s Digital Platforms Inquiry  released late last month says a loss of advertising revenue resulting from the rise of tech giants is hitting local and regional news hard.

The report found that local news outlets are struggling to keep their heads above water – at the expense of local reporting.

The report found that in the ten years to 2018, 106 local and regional newspapers closed across Australia, leaving 21 local government areas without coverage from a single local newspaper.

“The ACCC’s research has highlighted concerns with the reduced production of particular types of news and journalism, including local government and local court reporting, which are important for the healthy functioning of the democratic process,” the report says.

There has also been a substantial fall in the number of articles about councils, local courts, health and science issues over the past 15 years.

The rapid decline of local news is problematic as it compromises democratic processes, the paper warns.

“While there may not be a large audience for such reporting, local court, local government and regional reporting perform an important role in exposing corruption, holding governments, corporations and individuals to account, as well as in the production and dissemination of knowledge.”

The decline in this type of coverage coincides with a reduction in media revenue as a result of the unbundling of advertising from print to digital, the paper found.

Revival of local news “unlikely”

While other specialist areas such as health have transitioned across to online publications, it is “unlikely” emerging news outlets will compensate for the reduced coverage of local court and council issues, the ACCC says.

Despite this, there is not yet any indication of a business model which could replace the advertiser model which has typically funded local journalism, according to the ACCC.

Public broadcasters are also not resourced sufficiently to compensate for the decline in local reporting.

A targeted funding scheme should replace the $60.4 million Regional and Small Publishers Jobs and Innovation Package when it expires in 2021, the paper argues.

The ACCC recommends a new program of direct funding to replace the regional and small publishers package, which allowed print and online news publishers based outside major cities to apply for grants of up to $400,000.

“This program should provide total funding in the order of $50 million per annum to support the production of local reporting, to be defined as original journalistic coverage of matters relevant to local and regional communities – such as local courts, local issues and local government,” the report recommends.

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