The Gillard Government has given its strongest signal yet it could demand media barons pass a public interest test amid fears iron ore billionaire Gina Rinehart could use her stake in the ailing Fairfax newspaper company to campaign for her own political ends.
The warning came as Rupert Murdoch's News Ltd confirmed big job cuts in the face of plummeting newspaper circulation and the rise of the internet.
Communications Minister Stephen Conroy said the Government was still considering the recommendations of former Federal Court judge Ray Finkelstein on media regulation reform, but hinted he viewed favourably the report's call for more scrutiny of the motives of media barons.
Senator Conroy said he believed relations between the Government and News Ltd had improved "substantially" over the past 12 months - reckoning the change was thanks to a recent change in management at the media company.
Many senior Labor figures have accused News Ltd newspapers of waging war on the Government and last year Senator Conroy claimed News Ltd was pursuing a campaign of "regime change".
In a video address to staff in Sydney yesterday, News Ltd chief executive Kim Williams said the company would be rationalising its editorial and sales operations, admitting there would be job losses.
Mr Williams declined to say how many jobs could go, saying only the cuts would not be as severe as those announced by Fairfax this week.
A spokesman for News Ltd in Sydney said no decisions had been made about the company's operations in WA, the current focus being on operations on the east coast.
In WA, News Ltd publishes the Sunday Times and the Australian.
Senior Government figures are viewing with increasing angst Mrs Rinehart's growing stake in Fairfax and her demand for three seats on the company board.
One frontbencher said privately yesterday they believed Ms Rinehart was not interested in robust, independent journalism.
'The West Australian' is a trademark of West Australian Newspapers Limited 2013.
All rights reserved.
Select your state to see news for your area.