David Coleman (Banks, Liberal Party) Share this | Hansard source

It is good to talk on this bill, the Broadcasting Legislation Amendment (Media Reform) Bill 2016. I have to say that the position of the opposition on this bill is absolutely absurd. It is just lacking in any logic and any sensible rationale and it would simply seek to crystallise the Australian media industry and freeze it as if it were 1987. It is not 1987 and it is an absurd position that the opposition are taking, and they should be ashamed of it.

Let us get to the crux of this issue in relation to the so-called two-out-of-three rule. At the moment, due to rules that have existed for decades and are now massively outdated, a media proprietor in a particular market can own two out of three of the platforms of newspaper, radio and television but is not able to own all three. So what part of this package would seek to do is change that rule to create the capacity for further mergers in this sector. It is really important to understand that the fact that the two-out-of-three rule is removed does not automatically mean that mergers can occur, because we still of course have a thing called the ACCC.

Mr Deputy Speaker, as you well know, the ACCC will run the ruler over any proposed transaction, certainly including the media sector. If the two-out-of-three rule is no longer there, the ACCC will still look at each and every transaction and ask, 'Is this appropriate? Does this lead to an inappropriate concentration of market power?' If the answer is yes, they will say that the merger cannot proceed. We also have a diversity rule in media which basically requires that there are numerous voices in different markets, particularly in the radio sector. So the diversity rule absolutely remains and the ACCC remains.

The opposition is basically saying that no company should be allowed to even put a proposition forward to merge those entities—so no newspaper should be allowed to put forward a proposition to merge with radio and TV. The newspaper industry is not what it used to be. So, on the one hand, we have this quite remarkable situation where the opposition is saying that the newspaper industry is so powerful that it must not be allowed to merge with other media platforms and, on the other hand, newspaper companies all around the world, and certainly in Australia, are on the verge of shutting down their newspapers, because the newspaper business has chronic and likely terminal problems. Those opposite say, 'So powerful; can't be allowed to merge with other entities,' whilst the reality is that these companies are in dire straits and are anything but the powerful entities that they once were. But that does not matter to those opposite, because there is clearly some sort of political agenda here. Whether it is some sort of a grudge that those opposite or predecessors of theirs in the communications portfolio hold, I do not know, but it is a ridiculous proposition.

It is worth noting that, under the current rules, one company could own Facebook, Google and every other website in Australia—thereby having immense power and reach—but not have any problem under the two-out-of-three rule. That would actually be okay under the two-out-of-three rule. But if a newspaper company that is perhaps in the process of shutting down its newspapers because they are not doing so well wished to partner with a radio station and a TV station in a particular market, those opposite say, 'No, we can't allow that to happen.' They cannot allow that to happen, but they have no objection to one entity basically owning everything online. It was also interesting that the previous speaker, the shadow minister, talked about how seven out of the top 10 digital sites are owned by traditional media companies, but she neglected to mention that No. 1 and No. 2, who are dramatically bigger than everyone else, are of course Google and Facebook, which have a far greater reach than any other companies online.

So you do have to wonder why, in 2016, a party which purports to hold itself out as an alternative government, says, 'We cannot allow companies in this industry to put forward proposals to merge.' Proposals will still have to go to the ACCC and will still be subject to the diversity rules that apply in this sector. They say, 'Don't even let them put forward a proposal to the ACCC. Watch them wither on the vine, with the attendant job losses that will occur'—and they will occur, and I do not think anybody who follows this sector would disagree with that. Let them wither on the vine; let them wither away; do not let them put forward constructive proposals to make their businesses more viable, even though those proposals would still be subject to ACCC approval. That is just an absurd proposition. It is a completely ridiculous proposition and it is not befitting a fringe group, let alone a group who purport to be an alternative government.

We should also address the 75 per cent rule, which is contained by this bill. It is good that the opposition do support the abolition of the 75 per cent rule—though it is bad and ridiculous that they do not support the abolition of the two-out-of-three rule. To explain the 75 per cent rule, this is a strange rule indeed. Basically, at the moment no one entity can own free-to-air television stations that reach more than 75 per cent of the Australian population. That is why, in the Australian television industry, we have, basically, two types of companies. We have the metropolitan broadcasters, Seven, Nine and Ten, and then in regional markets we have Prime, Southern Cross and WIN. The reason it is structured that way is that it is not possible for either the regional broadcasters or the metropolitan broadcasters to reach more than 75 per cent of the population, so there are basically two entities doing broadly the same thing. Presumably, when the 75 per cent rule was established, the rationale was to limit the reach, so to speak, of any one entity into the television market. Presumably, the idea was that they did not want a particular company being able to reach 100 per cent of the community through TV.

The problem, though, is that it has actually never worked like that. Let me explain why. The free-to-air metropolitan networks all have deals with the regional broadcast networks—Seven and Prime, and now Nine and Southern Cross, and now Ten and WIN. They have deals where they, basically, redistribute their programming. If you have watched regional TV while in Canberra, Mr Deputy Speaker, which I am sure you have on occasion, you will have noticed that the broadcast bears a striking similarity to what you will see on Seven, Nine or Ten. Critically, the national news of Seven, Nine and Ten is broadcast unfiltered and unchanged into those regional markets. So, if the concern of the legislation was to limit the reach of those news stories into regional markets, it has not been very effective. The national story of the day on Nine will be seen in regional markets, and the same applies to Seven and Ten—so they have been reaching 100 per cent of markets the whole time. Of course, regional networks do have some individual regional stories, which is a good thing. Some of them do that simply to comply with the content rules and some of them actually do a great deal more than is required under the content rules. Some of them provide far more local content than they need to under the rules. They do so for commercial reasons. The regionals provide some local news content, but they also redistribute 100 per cent of the content of the main networks, particularly in news, and they might have one or two other shows—maybe a regional fishing show or a couple of other shows—but overwhelmingly it is the same schedule as in the metropolitan market. That has always been the case and it was the case before the internet, so this rule has kind of never made sense, to be honest.

It makes even less sense now because what you can do now—and this is actually happening—is reach 100 per cent of the population with a TV product via the internet. Channel 7, I think, was the first to start doing that, with the broadcast of, effectively, the Seven metropolitan content into regional markets. So 100 per cent of the community can access Channel 7, even in regional markets, and that is okay under the law. Point 1, it is okay to reach 100 per cent through digital distribution. Point 2, even through the distribution on free-to-air spectrum, it is actually okay for programming to reach 100 per cent of the community, because it does and has been doing so for decades. The only thing that is not okay is for 100 per cent of people to be reached via spectrum via the same ownership structure, which again makes no sense because it is already happening through other means.

So it is good that the opposition agrees that this rule should be changed—frankly, this rule should have been changed many years ago—but this is a package because the 75 per cent rule is quite linked to the broader reform of the two-out-of-three rule. The opposition say that a modern media industry in Australia should be stuck in rules that were created under the Keating government. The shadow minister talked in very glowing terms of Mr Keating and even used the term 'prophetic' to describe his pronouncements on this industry, but I am not sure that I would agree that his influence has been quite so other-worldly. This is creating a constrained situation in the Australian media industry and it will lead, and is leading, to reduced activity in the sector and reduced employment. The newspaper sector, for example, is, I think it is fair to say, the most challenged of the three traditional sectors. Barely a day goes by when you do not hear about a newspaper company in the world scaling back operations, laying off staff or shutting down particular versions of their newspaper. The reason they are doing that is, basically, that the economics of the newspaper business do not work very well anymore. They used to work well. They used to be very powerful economics, but what has happened is that the classifieds industry, which for so long was really the linchpin of the revenue streams of newspapers, has gone away pretty much completely. You would be familiar with Seek and Carsales and realestate.com and all those websites, Mr Deputy Speaker. The vast majority of what used to be the foundation of the newspaper industry—those job ads, car ads and housing ads—is gone now and is online. As a consequence—there are other reasons too—the newspaper industry is in immense financial difficulty.

Those opposite say, 'No, let's not let newspaper companies or other media sectors come forward with constructive proposals to build companies that will survive in the current era, companies that will be able to take on those international competitors, companies that will be able to fight against the googles and the facebooks who are making so much headway and taking so much of that market which has traditionally been captured by Australian companies.' Those opposite say; 'No, don't let them react to that. Make them sit there. Make them sit there and, basically, watch as their industry is fundamentally changed by these massive foreign companies who do employ people in Australia but only a small fraction of the number of people who are employed by traditional media companies.' Whatever their political motivation is—I do not fully understand what their motivation is; it is difficult to decipher—they say, 'Don't let Australian companies come up with proposals to take on Google. Don't let Australian companies come up with proposals to create structures that will enable them to compete in the future with these very aggressive and very successful search and social media platforms.' That is, as I said, a ridiculous proposition.

The 75 per cent rule and the associated changes in this legislation will include even further improvements to regional content rules in the television industry. They are already very strong, but they will be even stronger under this package of reforms. This is a reform that means regional Australia will get quality media services into the future because they will be allowed to have structures that work in a business sense. Those opposite say, 'Don't let them. Let them wither on the vine. Let the foreign websites come in and take over without allowing a fair fight from the domestic media companies.' It is absolutely wrong, and the opposition should support this legislation.

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