Administrator Harpf would give out media support and reduce the value-added tax for the press

Ministry of Transport and Communications
Publication date 5.3.2014 10.36
Press release

In his report, administrator, Licentiate of Laws Tuomas Harpf suggests that Finland adopt a similar model to the media support system that is in use in Denmark in order to support production and innovation. However, this support should be granted on a fixed-term basis and it should be as neutral as possible in terms of competition. The total amount of support given would be 30 million euros.

The report was conducted because Minister of Housing and Communications Pia Viitanen wanted to find out how the press could be supported during this turning point in media and how said support would affect the media market.

Harpf's report is based on the 18 measure proposals compiled by the press committee set by the Ministry of Transport and Communications, which are used to ensure high-quality domestic media content production also in the future. The committee proposed a fixed-term support for the press.

Harpf was to evaluate the effects of press support on the wider competitive situation of the media market as well as compile a proposal for the implementation and funding of the State's fixed-term press support. He also had the possibility to make other proposals he saw fit in order to protect pluralist communication.

According to Harpf, a similar model to Denmark's media support system could be introduced in Finland, or more specifically its production and innovation support.

Production support (25 million euros) could be granted for example to cover up to 30 per cent of the production costs of journalistic content. Support could be given to both printed and online publications but also to the journalistic content production for TV and radio. This would make the support completely neutral in terms of competition within the field.

- The support system should work on a fixed-term basis, for example three years, after which its effects would be evaluated. Support could be granted to generally available publications aimed at a wide audience and with at least four years of operation behind them, says Harpf.

On the other hand, innovation support (5 million euros) could be granted to development projects in the media field, such as the production development of new products and solutions. For the efficient utilisation of this support it is very important that product development is carried out as joint projects.

In addition, Harpf would reduce the value-added tax of the press to five per cent, which is the lowest possible VAT rate in the EU. This reduction should be fixed-term and be reflected in consumer prices.

- The value-added tax for magazine subscriptions, which was introduced in the beginning of 2012, came at the worst possible time during a turning point in the field. The ratio of the collected taxes is not reasonable against the negative effects caused by it to the press as well as employment in the field, Harpf points out.

Difficulties in distribution can only be solved through cooperation between Itella, its magazine customers and the labour organisations in the field. Before the basic situation has been cleared up, Harpf does not believe it possible to give recommendations on how the special issue of sparsely populated areas should be dealt with.

- However, a part of the solution could be a fixed-term distribution support for sparsely populated areas which would guarantee the distribution of magazines and newspapers to remote districts for a reasonable price. This support would be allocated to those actors in the field whose distribution costs per unit significantly exceed the average costs of the field. The prerequisite for receiving support would be following an equal pricing system in the whole country.

In his proposals, Harpf also takes a stand on the new digitalisation of television and the regulation of advertising.

A wide range of print and electronic media representatives, distributors as well as members of the press committee set by the Ministry of Transport and Communications were heard during the compilation of the report.

Further information

Mr Tuomas Harpf, Administrator, tel. +358 400 555 506, [email protected]