Budget Review 2017–18 Index

Dr Rhonda Jolly

Broadcasting and Content Reform package: broadcasting licence fees

Reduction, or preferably the abolition, of the licence fees free-to-air broadcasters pay annually has for some time been the subject of intense lobbying by the industry. Since 2010 there have been a number of decreases in licence fees, with the last reduction of 25 per cent announced in last year’s Budget.[1] In this Budget, the Broadcasting Content and Reform package confirms the Government’s pre‑Budget announcement that broadcasting licence fees will be ‘abolished’.[2] The Budget has allowed for a loss of licensing fee revenue of $89.6 million over the next four years.[3]

Broadcasters will, however, still have to pay for the use of radio spectrum. The Government will set a price on the use of radiofrequency spectrum that it argues will more accurately reflect its use. Instead of paying approximately $130.0 million in licensing fees, it is expected that broadcasters will pay around $40.0 million for the amount of spectrum they use.[4] The Government believes the licence fees measure will give commercial broadcasters ‘flexibility to grow and adapt in the changing media landscape, invest in their businesses and in Australian content, and better compete with online providers’.[5] In addition, the Government argues that licence fee relief will make it possible for the Government to deliver ‘a community dividend’ in the form of gambling advertising restrictions.[6] It could be argued, however, as one commentator does, that ‘the budget loser in this instance is the taxpayer, who owns the spectrum the commercial free-to-air broadcasters use’.[7]

Commercial Radio Australia has commented that licence fee cuts will amount to a 94 per cent decrease in commercial radio fees, which will assist commercial radio to counter ‘increasing pressure from unregulated international and online competitors’.[8] Free TV Australia has labelled the reduction in fees ‘crucial’ for Australian jobs and for the industry’s ‘ability to continue creating great local programming that is watched by millions of Australians every day’.[9]

The Broadcasting and Content Reform package is part of an overall strategy for media change announced by the Government prior to the Budget.[10] The principal measures in the overall package would remove certain media ownership restrictions—the 75 per cent audience reach rule and the two out of three ownership rule.[11] The Broadcasting Legislation Amendment (Media Reform) Bill 2016, which contains changes to the current 75 per cent audience reach rule and the two out of three ownership measures, passed the House of Representatives in November 2016 and is currently before the Senate.

In addition, the Broadcasting and Content Reform package includes changes to anti-siphoning rules to allow pay television operators more opportunity to bid for major sporting events by removing several major events from the list and extending the automatic delisting period for events.[12] Current legislation allows the Minister to remove events from the anti-siphoning list and to override over-ride the automatic delisting period for a certain event if he or she is satisfied that a free-to-air broadcaster has not had a reasonable chance to buy the rights to that event.[13]  However, as section 115 of the Broadcasting Act 1992 specifies certain hours which constitute the automatic delisting period, this part of the measure will require legislation to amend the anti-siphoning scheme.[14]

A further measure, confirmed in the Budget’s Broadcasting and Content Reform package, provides funding of $30.0 million over four years to subscription television to enable it to increase coverage of sports that currently receive little, or no broadcast exposure.[15] This measure will not require legislation to implement.

It appears significant concessions have been made to reach agreement on the new package. Free‑to‑air broadcasters and subscription television operators, for example, have for many years taken uncompromising stances on the anti-siphoning list, with the former opposed to change. However, the representative bodies for both these media sectors have praised the proposed reforms.[16] According to the Australian Subscription Television and Radio Association (ASTRA), such support has resulted from the involvement of ‘the entire media industry in the development reforms that address the broad concerns of all participants’.[17]

Despite ASTRA’s declaration, not all participants are likely to be satisfied. While the licence fee relief will most likely compensate broadcasters for the loss of revenue from the gambling advertising restrictions, it does nothing to allay the concerns of sporting organisations. Malcolm Speed from the Coalition of Major Professional and Participation Sports argues these will have an impact on the outcome of media rights deals for sporting organisations and lower the value of media rights, which Speed claims is sport’s greatest asset.[18]

The Minister for Communications, Mitch Fifield, has noted that the Government’s intention in promoting media reform is to further the national interest by not allowing ‘the nation’s embattled mainstream media to flounder in the face of offshore tech giants like Facebook and Google’.[19] However, some are sceptical of the extent to which traditional media can be assisted in the new media environment. Glenn Dyer and Bernard Keane, writing for the online journal Crikey, for example, see the overall package as ‘aid’ for an industry ‘up against an unstoppable wave of change’. Dyer and Keane argue that licence fee cuts and/or any media mergers or takeovers that may result from removing legislative restrictions will not halt that change.[20] In Dyer and Keane’s opinion, Google and Facebook will continue to undermine other forms of media and ‘care packages’ will not be able to save ‘media dinosaurs’.[21]

Community broadcasting and additional funding for the Special Broadcasting Service

This Budget will provide additional funding of $6.1 million over two years for the community radio sector.[22] According to a pre-Budget announcement, the funding will assist the sector with the costs of digital radio broadcasting, including the extension of permanent services to Hobart, Canberra, Darwin and the Gold Coast. The funding will also assist community radio broadcasters to meet transition costs resulting from the Australian Communication and Media Authority’s reorganisation of the 803-960 MHz radio frequency band.[23]

Community Broadcasting Association of Australia CEO, Jon Bisset, welcomed the Government’s commitment to the sector, but added that the increased level of funding will be needed on an ongoing basis, especially to support regional expansion of community digital radio services.[24]

This measure will not require legislation as the community broadcasting sector receives funding from the Department of Communications and the Arts annually. The sector’s funding is then distributed through the Community Broadcasting Foundation.

As a second iteration of legislation introduced in 2015 to provide the Special Broadcasting Service (SBS) with flexibility to raise funding from advertising and product placement has yet to pass the Parliament, the Government has provided compensatory funding to the broadcaster.[25] In the 2015 Mid‑Year Economic and Fiscal Outlook (MYEFO) this amounted to an extra $4.1 million, with a further $6.9 million delivered in the 2016–17 Budget.[26] This Budget continues the additional funding measure in anticipation of the passage of the advertising flexibility changes by providing a further $8.8 million to SBS.[27]

SBS has not commented on the additional funding. One journalist has observed the failure of the SBS legislation is becoming expensive for the Government and it may be unwilling to continue to compensate the broadcaster if the SBS advertising flexibility legislation is defeated for a second time in the Parliament.[28]

[1].          Australian Government, Budget measures: budget paper no. 2: 2016–17, p. 8.

[2].          M Fifield (Minister for Communications and the Arts), Major reforms to support Australian broadcasters, media release, 6 May 2017.

[3].          Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 1.

[4].          M Fifield, Major reforms, op. cit.

[5].          Ibid.

[6].          Ibid.

[7].          A Carson, ‘Australian media at a crossroads amid threats to diversity and survival’, The Conversation, 10 May 2017.

[8].          Commercial Radio Australia, Commercial radio welcomes removal of licence fees, media release, 6 May 2017.

[9].          Free TV Australia, Broadcasting reforms positive for Aussie content and local jobs, media release, 6 May 2017.

[10].       Fifield, Major reforms, op. cit.

[11].       Broadcasting Legislation Amendment (Media Reform) Bill 2016  

[12].       Fifield, Major reforms, op. cit. For an explanation of anti-siphoning rules see R Jolly, Sport on television: to siphon or not to siphon? Parliament of Research Paper series, No 14 2010, Parliamentary Library, Canberra 2010

[13].       The Department of Communications fact sheet, Amending the anti-siphoning scheme, May 2017, shows the event s the government intends to remove form the lost. 

[14].       The latest Ministerial determination for events on the anti-siphoning list — Broadcasting Services (Events) Notice (No. 1) 2010

[15].       Fifield, Major reforms, op. cit.

[16].       Free TV, Broadcasting reforms, op. cit. and Australian Subscription Television and Radio Association (ASTRA), Media changes a welcome first step, media release, 6 May 2017.

[17].       ASTRA, Media changes, op. cit.

[18].       N Tabakoff and J Kelly, ‘Sport betting ads to be banned “siren to siren”’, The Australian, 20 April 2017, p. 5.

[19].       ‘TV licence fees set for the scrap heap’, Adelaide Advertiser, 10 May 2017, p. 55.

[20].       G Dyer and B Keane, ‘Winners from the media package will need a lot more than handouts’, Crikey, 8 May 2017.

[21].       Ibid.

[22].       Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 74.

[23].       M Fifield (Minister for Communications and the Arts), New funding for community radio broadcasters, media release, 4 May 2017.

[24].       Community Broadcasting Association of Australia, Government keeps the community in your radio, media release, 4 May 2017. Note the community broadcasting sector receives funding from the Department of Communications and the Arts annually. This is distributed through the Community Broadcasting Foundation.

[25].       Communications Legislation Amendment (SBS Advertising Flexibility) Bill 2017

[26].       Australian Government, Mid-year economic and fiscal outlook 2015–16, Appendix A: policy decisions taken since the 2015–16 Budget: expense measures, p. 128; Australian Government, Portfolio budget statements 2016–17: budget related paper no. 1.3: Communications and Arts Portfolio, p. 323.

[27].       Australian Government, Portfolio budget statements 2017–18: Communications and Arts Portfolio, op. cit., p. 286.

[28].       C Knowlton, ‘SBS gets another $9m as ad averaging failure continues to bite’, Crikey, 9 May 2017.

All online articles accessed May 2017. 

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