SYDNEY (AP) -- An inquiry into Australian media prompted by last year's News Corp. scandal recommended on Friday better oversight of the industry and called for the establishment of a government-funded council to set and enforce journalistic standards.
The investigation was launched after Rupert Murdoch's News Corp. closed its top-selling British tabloid, News of the World, last year over illegal phone hacking allegations. News Corp. owns 70 percent of Australia's newspapers through its subsidiary, News Ltd.
There have been no allegations made in Australia of the type of phone hacking that led to the News of the World scandal in Britain. But many government lawmakers argue that News Ltd.'s newspaper holdings are too large and are biased against the ruling center-left Labor Party.
The inquiry, headed by a retired judge assisted by a journalism professor, examined the independence and effectiveness of the print media's self-regulatory watchdog, the Australian Press Council. In its report released Friday, the inquiry found the current regulatory model inadequate, and recommended a "News Media Council" be established to set journalistic standards and handle complaints when those standards are breached.
The inquiry's main criticism of the Press Council is that it does not have the necessary funding or power to carry out its functions.
"The News Media Council should have secure funding from government and its decisions made binding, but beyond that government should have no role," the inquiry recommended. "The establishment of a council is not about increasing the power of government or about imposing some form of censorship. It is about making the news media more accountable to those covered in the news, and to the public generally."
The inquiry also recommended that the new body be given the authority to force a media outlet to publish an apology, correction or retraction. It didn't specify how the new body would be empowered.
Communications Minister Stephen Conroy said in a statement that the government would consider the recommendations as part of a wider review of regulation issues involving the convergence of broadcast and online media.
Press Council chair Julian Disney said he agreed with the inquiry's findings that media standards needed to be strengthened. But he said better funding of the Press Council could achieve that without the formation of the new regulatory body. The Press Council is funded by Australian media companies, along with the Media Entertainment and Arts Alliance, which represents journalists and other media workers.
"The report has laid down a clear challenge for the publishers," Disney said in a statement. "If they wish to avoid regulation by the new body (the inquiry) proposes, which would be created by government and fully funded by it, they would need to guarantee substantially improved financial support for the Press Council."