Within two weeks of the closure of Gordon Barton’s Sunday Observer newspaper in March 1971, publisher Maxwell Newton hit the streets with his Melbourne Observer newspaper.

Newton was editorially equipped for the task: he had been Editor of The Australian Financial Review (Fairfax) when it went daily; he had been foundation Editor of The Australian national broadsheet for Rupert Murdoch seven years earlier (1964); and he had been foundation Editor of the Sunday Independent in Perth for mining giants Lang Hancock and E.A. ‘Peter’ Wright. That pair had also tried a short lived daily, the Independent Sun, Western Australia. An April 1969 press report said: “About 80,000 copies were printed and sold. It is planned that the Independent will become a daily later this year or next year. Today it had 24 pages of news, mainly feature-type
and interpretative articles, no hard news; a comment section covering political, business, national and inter national trends’; an eight page lift-out advertising and real estate section; an eight-page colour and black and white comics lift-out and a 12-page sporting section lift-out.” In an ABC-TV interview, Newton said the Independent’s political views would be more to the right than The West Australian. It was to be a serious coimpetitor to Rupert Murdoch’s Sunday Times. Newton already had the template for his Melbourne Observer, two years later.

Newton employed his second-in-charge, Peter Ferris, to helm the Melbourne weekend paper. First issues, each 32 pages, came off the presses of Regal Press at Claremont St, South Yarra. Much of the standing artwork had been punched from the paste-up benches of Gordon Barton’s Sunday Observer at 822 Lorimer St, Fisherman’s Bend. Football identity Harry Beitzel was contracted to provide the sports content; later in the year there was a bust5-up in this partnership, and Beitzel went on to launch Sunday Sport as a successor to Footy Week, and then just 26 issues of Sunday News. Beitzel lost more than $200,000 in 26 weeks.

From the start, the Newton Observer had more than its fair share of legal and commercial challenges. Just several weeks into the life of the Melbourne Observer, Ipec Australia Ltd lost its attempt for the new newspaper to use word ‘Observer’. Mr Justice Adam of the Victorian Supreme Court also refused a request that the Newton companies be prevented them from saying they had taken over the Sunday Observer. IPEC sought the restraints against Newton, publisher Optimus Holdings Pty Ltd, and printer Regal Press Pty Ltd. The Melbourne Observer interests deceived the public into believing it was an IPEC publication. Mr Justice Adam said wide and TV publicity had been given to the closure of the Sunday Observer.

By early 1972, things weren’t going perfectly for Maxwell Newtoneither. In February, Newton discontinued printing in Canberra. His editorial controller Cyril Wyndham said all publications except the Canberra Sunday Post would be shifted to Brisbane. Wyndham attributed the ACT closure on poor transport from the national capital to major cities. All production employees were given one week’s notice. Mr I. Jordan, secretary of the Canberra branch of the Printing and Kindfred Industries Union, said there were about nine members of his union and several casual and female staff who were not union members. Newton was said to be out of the country.

Several months earlier, Maxwell Newton Country Newspapers Pty Ltd sold the Bega News, the Eden Voice and the Moruya Examiner businesses to a syndicate including publishers Jack Bradley and Arthur Bradley  of Temora, and J. Woods of Queanbeyan.

Maxwell Newton’s proprietorship of the Observer stretched from 1971 to 1977. It was a heady period in Australia’s history that saw the election, and the subsequent dismissal of the Whitlam government. It was an era that included the introduction of the metric system, colour television and a wide change of social values.

Newton was a central character in Australian political history. As an employee of Fairfax in the 1950s, he had been the speechwriter for Labor leader Herbert ‘Doc’ Evatt. As the Editor of The Australian for Rupert Murdoch, he received government leaks from leadership aspirant Billy McMahon. Newton was an enemy of short-time Prime Minister, John ‘Black Jack’ McEwen. Former Government Minister Peter Howson (The Life of Politics) wrote: “At dinner Bill asked me why I thought he was not trusted. I told him about the views of the party on his relationships with [the publisher Max Newton which had caused so much comment during his trips around the world for the IMF conferences, and also the relations with the Basic Industries Group. He asked me again all the same sort of questions we’d had earlier and said whom should he turn to to get confirmation, and again I said to the same people who helped him get the deputy leadership some two years ago, but that at present it was necessary for him to build up a new image if he wanted to have any chance in the ballot. I felt that blunt speaking
was necessary at this time, and while I don’t think he is grateful to me at least I showed him what I believe to be the true situation, which was confirmed in later talks during the week.”

With his proprietorship of a popular red-top Sunday newspaper, and seeing what sales his editorial team under John Sorell could achieve, Newton went on television in 1973, saying that ratings and
circulations are built on entertainment, sex, violence and sport; politics is notoriously low on the scale of most people’s interests. Newton included some political coverage in his papers, but the emphasis was quickly changing to his formula of “tits, trots and TV”.

Red-top newspapers could be a litiguous business. Michelle Downes, 21, Miss Austrlaia, took out a Supreme Court writ in October 1973 claiming unspecified damages from Newton’s additional Midweek Observer newspaper. Photographs published by the newspaper showed per posing nude with an Afghan hound. Miss Downes sued Newton, editor John Sorell, and Optimus Holdings Pty Ltd. The Writ said that the photographer Rinaldi agreed that the photos would never be published by any third party.

Prime Minister Gough Whitlam sued the Melbourne Observer newspaper in April 1974, over reports over land investment. Defendants were the proprietors, Optimus Holdings Pty Ltd; publisher John Sorell; and printer Donald McAlpine. The Canberra Times noted that the newspaper gave undertakings to Mr Justice Kaye – without any admissions of liability – not to repeat allegations made against the PM, who claimed he had been defamed in the April 21, 1974 issue. Daryl Dawson QC represented Mr Whitlam.

In November 1975, Newton’s Observer campaigned hard against the Whitlam government, including the front-page headline: ‘For God’s Sake, Go!’. When the Malcolm Fraser-led Liberal Goverment won the December 1975 Federal election, Newton’s newspaper led with the headline: ‘Thank Bloody Christ!’. Newton had supported the November 11 actions of Governor-General, Sir John Kerr, in dismissing the Whitlam Government. (Interestingly, it was Kerr – as a Federal Court judge – who had come to Newton’s rescue in the previous decade. Newton had faced Police raids at his Canberra home when the Liberal Government decided he was receiving too many leaks of information.)

Newton joined forces with adman John Singleton to promote the Workers Party as part of the pre-1975 Federal Election campaign. Newton made headlines when he referred to Jim Spigelman, permanent Department of Media, as a “jewboy”. Workers Party director Bob Howard said Newton’s remark was not meant to racist or ant-semetic but “just to describe a type of personality”. Mr Howard continued: “I and the Workers Party definitely do not agree with what Mr Newton said but he should not be kicked out of the party for it. We rapped him on the knuckles, but everyone is capable of making a mistake. He is definiteky of great value to the Workers Party and we allowed him to continue with us. There is no chance of the Workers Party being even remotely fascist, nazi or anti-semetiv.” Newton refused to apologise for his remark on a Melbourne television show.

Melbourne Observer publisher Maxwell Newton was fined $200 at Richmond Magistrates’ Court on June 28, 1976 for publishing indecent material. The fine was the least of Newton’s worries. On June 22, 1976, Mr Justice Menhennit approved a scheme of arrangement for five companies associated with the pyblication of the Sunday Observer. “Under the scheme creditors agree not to proceed with suits against the companies. In return they will be paid dividends decalred from time to time by the administrators of the scheme, Mr J. Romanis, accountant of B.O. Smith and Co.”

Liquidators were appointed on May 31, 1976. Sacked by his company, part of Newton’s publishing business was sold by liquidators in 1977. The Sunday Observer business was sold for $500,000 to Peter Isaacson, who later successfully sought to adjust the price to $425,000. By June 1978, Maxwell Newton, now bankrupt, came under questioning by the Registrar in Bankruptycy in Victoria, Mr M.J.D. Zacharin. Newton said his companies had under-captilised and too dependent on loan money. There had been a deficiency of more than $2 million contracted mainly by Mr Newton’s gauarntees of loans to his companies. Under a scheme of arrangement, the group of companies was headed by Regal Publications. An initial five-year debt moratorium had been sought.

Maxwell Newton’s companies decided to add mail order business revenue, from product advertisements printed at no cost in the firm’s newspapers. Newton would grab the cash that would arrive daily in envelopes posted by the Observer’s faithful readers. There were many products including T-shirts, special publications and merchandise. Often, there were problems with people receiving the goods they had purchased including Scream magazine, Sherbet Fan Club and other pop group items. The Victorian Director of Consumer Affairs reported that 18 people said they had sent money to Optimus Holdings Pty Ltd and had not received the goods they had ordered. A further dozen complaints followed. Writing in The Canbeera Times, Voter’s Voice columnist Graham Downie noted further complaints investigated by the Canberra Consumer Affairs Bureau:  “Consumers were advised to seek other sources for their purchases, as it was believed that orders might not be filled.”

A June 1978 newspaper report said: “Mr Newton said that after he had been “sacked” by the manager of the scheme last year, he had worked for companies which were enagged largely in the prtoduction and distribution of pornographic  literature. His wife’s company – Dinasel Pty Ltd, for which he new worked for $100-a-week – ran a postal order business in “poronographic books, sex aids and that sort of thing,” he said. Giving reasons for his bankruptcy, he said the income from the Sunday Observer group rose from $12,000 a week to $70,000 or $80,000. The circulation had continued to rise despite a substantial price increase and competition from the sunday Press. In this “period of euphoria” he became concerned about circulation problems and his ability to produce more newspapers. he was responsible for the overspending on plant. The error wa due to “a lack of balance in my thinking which I would in turn attribute to a degree of emotional immaturity on my part”.

“The Registrar asked why Mr Newton had gone into the pornographic literature business. Mr Newton said: “The basic problem we had was to keep our presses going all through the week. These publications were produced were produced virtually for the cost of the newsprint. You can crunch out comics at very low cost using your presses through the week.”

Maxwell Newton’s spectacular commercial fall in Australia was well illustrated in his letter to The Canberra Times (November 20, 1979): “Sir – It has been reported that the Commissioner for Taxation has stated I understated [my] income by some $198,000 for 1969-70 1975-76, and that I was charged some $93,000 in additional tax. While it is open to the Commissioner for Taxation to issue these fanciful assessments and to deploy the enormous resources available to him (in my case, two senior officers trailed me for two years), it is another thing to be paid  the money deemed owing. In my case, the commissioner has not been paid one red cent of the fairy-tale sums he has invented. Nor is there any likelihood he will be paid a farthing. – MAXWELL NEWTON, Toorak, Victoria.”