Bills Digest No. 95, 2012–13

20 March 2013

Television Licence Fees Amendment Bill 2013

Anne Holmes
Economics Section 

Date introduced: 14 March 2013

House: House of Representatives

Portfolio: Broadband, Communications and the Digital Economy

Commencement: Sections 1 to 3 commence the day the Act receives Royal Assent. Schedules 1 and 2 commence the day after the Act receives Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose of the Bill

The purpose of the Television Licence Fees Amendment Bill 2013 (the Bill) is to amend the Television Licence Fees Act 1964 (the Act) to establish a new annual licence fee scale for commercial television broadcasting licences.[1]

Background

Television broadcasters pay licence fees on the basis that they are using a public asset, namely spectrum. Free to air broadcasters do not pay directly for the spectrum, as, for example, telephone companies do. Fees for the use of spectrum are imposed under the Act.

Television licence fees are calculated as a proportion of gross earnings. The formula is included in the Act. However, it can be varied by regulation. It is a progressive formula, with the rate increasing with the level of gross earnings, to a maximum of nine per cent of gross earnings.

In early 2010 the Minister for Broadband, Communications and the Digital Economy announced that licence fees would be rebated by 33 per cent in 2010 and 50 per cent in 2011. The move was presented as protecting local content, because the profitability of the free to air television stations was falling.[2] Licence fees payable would have fallen anyway as earnings fell, but this was a change in the formula so that there was a proportional reduction of the already reduced fees. The Act does not refer to local content, as levels of local content are separately required as conditions of the licences. At the time of the original cut there was questioning as to whether the rebate was ‘a subsidy, a tax break, a grant for local content, financial assistance for digital conversion, a bribe or a bailout for an industry supposedly in decline.’[3]

The 50 per cent reduction has been continued by regulation to the end of 2013.[4] Extension of the rebate and the decision to make it permanent have been justified by the need to keep the commercial stations viable so that they will continue to produce local content.[5]

This Bill would put the reduced fee scale in the Act.

Committee consideration

Senate Environment and Communications Legislation Committee

The Bill has been referred to the Senate Environment and Communications Legislation Committee for inquiry and report by 17 June 2013. Details of the inquiry are at the Committee’s webpage.

The Bill was also referred to the House Standing Committee on Infrastructure and Communications, but a statement has been made discharging the Committee's requirement to provide a report.[6]

Senate Standing Committee for the Scrutiny of Bills

The Standing Committee for the Scrutiny of Bills has not yet reported on the Bill.

Policy position of non-government parties/independents

This Bill was introduced as a part of the Government’s package of measures in response to the Convergence Review and the Independent Inquiry into the Media and Media Regulation.[7] The positions of the non-government parties and independents on this Bill have been obscured by their reactions to the package as a whole. At time of writing the situation was fluid. There appears, however, to be general support for the policy intention of this measure.

The Screen Producers Association of Australia and the actors union, Equity, were reported to be critical of the rebate, but their criticism centred on the failure to strengthen the local content requirements.[8]

It has been reported that Mr Kerry Stokes, Chairman of Seven West Media, is prepared to forgo the rebate of licence fees in order to have the rest of the current media package shelved.[9] A report in the Australian Financial Review says that television licensees are divided about the package but support the rebate.[10]

Financial implications

The cost of extension of the rebate for the six months to June 2012 was $80 million.[11] The Explanatory Memorandum for the Bill states that the reduction in Commonwealth revenue due to the measures in the Bill has been included in the Mid-Year Economic and Fiscal Outlook 2012–13.[12] It is presumably included in the total for ‘Decisions taken but not yet announced’ as it is not separately identified.[13]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[14]

The Parliamentary Joint Committee on Human Rights considers that the Bill does not raise any human rights issues.[15]

Key issues and provisions

The main part of the Bill consists of two provisions which in effect replace the existing arithmetical formulas in the Bill with new formulas which result in a halving of the assessed fees.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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ISSN 1328-8091

[1].              The Television Licence Fees Act 1964 is available at: http://www.comlaw.gov.au/Details/C2007C00013

[2].              S Conroy (Minister for Broadband, Communications and the Digital Economy), Government to protect Australian content on commercial television, media release, 7 February 2010, viewed 18 March 2013, http://www.minister.dbcde.gov.au/media/media_releases/2010/007

[3].              C Ricci, ‘A licence fee cut for TV networks’, The Age, 1 March 2010, viewed 19 March 2013, http://education.theage.com.au/cmspage.php?intid=135&intversion=301

[4].              The rebate is available until the end of the licensee’s accounting period that ends in 2013. Regulation 21 of the Television Licence Fees Regulations 1990, viewed 18 March 2013, http://www.comlaw.gov.au/Details/F2012C00880

[5].               S Conroy, Government moves to ensure quality Australian content stays on Australian television, media release, 30 November 2012, viewed 19 March 2013, http://www.minister.dbcde.gov.au/media/media_releases/2012/193

[6].              N Champion, ‘Report from Committee’, House of Representatives, Debates, 18 March 2013, viewed 20 March 2013, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F9ab2c98f-3835-4f5f-a7b5-d382a0f0d4fc%2F0066%22

[7].               Explanatory Memorandum, Television Licence Fees Amendment Bill 2013, p. 1.

[8].               K Quinn, ‘TV producers, actors slam licence fee cuts for commercial free-to-air networks’, The Sydney Morning Herald, 3 December 2012, viewed 19 March 2013, http://www.smh.com.au/entertainment/tv-and-radio/tv-producers-actors-slam-licence-fee-cuts-for-commercial-freetoair-networks-20121202-2ap2o.html

[9].               N Butterly, ‘Stokes attacks media reforms’, The West Australian, 14 March 2013, p. 1, viewed 19 March 2013, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F2296665%22

[10].               G Daley and B Holgate, ‘TV networks' all-out war threatens media reforms’, The Australian Financial Review, 12 March 2013, p. 3, viewed 19 March 2013, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F2290782%22

[11].               Australian Government, Budget measures: budget paper no. 2: 2012–13, Commonwealth of Australia, Canberra, 2012, viewed 19 March 2013, http://www.budget.gov.au/2012-13/content/bp2/html/index.htm

[12].              Explanatory Memorandum, p. 2

[13].               Australian Government, Mid-Year Economic and Fiscal Outlook: 2012-13, Commonwealth of Australia, Canberra, 2012, viewed 19 March 2013, http://www.budget.gov.au/2012-13/content/myefo/html/08_appendix_a_revenue.htm

[14].              The Statement of Compatibility with Human Rights can be found at page 3 of the Explanatory Memorandum to the Bill.

[15].              Parliamentary Joint Committee on Human Rights, Examination of legislation in accordance with the

              Human Rights (Parliamentary Scrutiny) Act 2011, Media Reform Package, 19 March 2013, p. 24, viewed 20 March 2013, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=humanrights_ctte/reports/index.htm