House debates

Tuesday, 26 May 2015


Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015; Second Reading

6:15 pm

Photo of Jason ClareJason Clare (Blaxland, Australian Labor Party, Shadow Minister for Communications) Share this | | Hansard source

'No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS.' Those now infamous words were almost the last thing that Tony Abbott said to Australians before they headed to the polls to cast their vote in the 2013 election. He said it on SBS World News the night before the election. It was his last and final offer, a solemn promise—you make me Prime Minister and I promise you this: 'No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS.' That was the deal. The Prime Minister was asking the people of Australia to trust him, to take him at his word, and they did.

We now know what has happened since: more than $50 billion in cuts to health, $30 billion in cuts to education, cuts to the pension that have only been stopped because we stopped them in the Senate, changes to the GST in the last budget released a few weeks ago, and—surprise, surprise—cuts to the ABC and SBS—half billion dollars in cuts to the ABC and SBS. The people of Australia have learnt an important lesson—that is, you cannot trust what this Prime Minister says. He has now broken every single promise that he made in that interview on SBS World News the night before the election. This legislation is nothing more than an attempt to cover up one of those broken promises, the promise that there would be no cuts to the SBS.

Last year in the budget the Prime Minister cut the budget of SBS by $53.7 million. The purpose of the legislation we are now debating is to allow SBS to put more ads on TV when people are watching to try to make up for some of those cuts. It is legislation based on a lie. Its objective is to help make up and cover up a broken promise, plain and simple. There may be good reasons to support some of the measures that are in this bill, but, if parliament passes it, it will be complicit in this broken promise, and that is why the opposition will not support this bill.

The bill doubles the amount of advertising that SBS can broadcast between 6 pm and midnight every night. This will mean more ads during the shows that most people watch on SBS—more ads during SBS World News, more ads during Insight, more ads during Dateline, more ads during the football, more ads during the cycling and, in all likelihood, more programs designed to fit around ads rather than the other way around. Just like Channel 7, Channel 9 and Channel 10, between the hours of 6 pm and midnight SBS will be able to broadcast 10 minutes of ads and four minutes of promos per hour.

The opposition have consulted widely on this bill and we have paid close attention to the submissions and the evidence presented to the Senate Environment and Communications Legislation Committee, which is inquiring into this legislation. The committee has received 27 submissions. Two of those submissions are confidential. Two of those submissions support this bill; they are from SBS and FECCA. You can tell by reading them that they reluctantly support this bill. All of the other submissions—in the order of more than 90 per cent of the submissions to this inquiry—oppose this bill. This is what Free TV, who represent the commercial broadcasters, said in their submission:

… the proposal to increase prime time advertising on the SBS equates to the introduction of a fourth commercial television broadcasting network by stealth.

This is what Save Our SBS said during the public hearings:

Despite a promise made the night before the 2013 election by Mr Abbott on SBS television directly to SBS audiences that there would be no cuts to SBS, the government has cut five per cent from SBS's budget over five years.

Even SBS, in their submission, admit that this is a cut, stating:

As a result of the Lewis Efficiency Study, Minister Turnbull announced further cuts to SBS’s funding in November 2014. Of the cuts, $25.2 million was based on back office efficiencies that SBS was already working towards. A further $28.5 million was predicated on successful legislative amendment to the SBS Act, which would provide SBS with additional advertising and sponsorship flexibility and allow SBS to deliver this portion of the funding cut via a modest annual revenue increase. The total funding cut of $53.7 million over five years from 2014-15 has already been reflected in SBS’s forward estimates.

The most important evidence to the committee though was not from broadcasters or from peak groups but from the people who watch SBS, the people who love the shows and do not want their favourite shows interrupted by more ads. Here is one example from Kym Ambrose, who said:

It will change the way SBS conducts itself and turn it into a commercial venture.

We need to support this station not destroy it.

Here is another from Peter Maurice Wilkinson. He said:

I was pleased to hear the Prime Minister declare just before the federal election, that, under his government there would be "No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or the SBS."

I am writing to request that you hold the government accountable to their promises.

Here is another Bridget Ikin:

To see SBS eventually broadcasting 14 minutes per hour of disruptive commercial breaks (i.e. ads plus promos) is totally unacceptable. It’s starting to look a lot like any commercial channel!

They are just a couple of quotes from a couple of the submissions to the committee, but there are 61,874 people like them—people who have signed this submission arguing that the parliament should oppose this legislation.

The only people who really support this bill are the government themselves. The only reason they are doing this is that they lied to the Australian people and now they are trying to cover it up by getting somebody else to replace the money that they have ripped out of SBS. In November last year Bill Shorten asked the Prime Minister a question about this at this dispatch box. I remember it, as if it were yesterday. I remember what the Prime Minister said. He said: 'It was not a broken promise.' He said: 'It was not a cut.' He said it was an 'efficiency dividend'. I thought I was in the theatre of the absurd for a moment. Here is a Prime Minister who promised no cuts to SBS and then the budget cuts $53.7 million out of SBS. Then when asked whether he was prepared to admit that that was a cut, he refused to admit that it was a cut and calls it an efficiency dividend.

The next day the Prime Minister's old friend, the Minister for Communications, was asked the same question on Sky TV. He did not give the same answer as the Prime Minister; he threw the Prime Minister under the bus. This is what he said when asked whether this was an efficiency dividend:

It is not an efficiency dividend... This is not an efficiency dividend.... Certainly there are cuts. He said no cuts to the ABC or SBS. There are cuts to the ABC or SBS.

Malcolm Turnbull, the Minister for Communications, told the truth, and it was a very different answer to what the Prime Minister had said the day before. I remember saying at the time that, if there is one thing that the Australian people hate more than politicians allowing, then that is politicians lying about lying. That is what the Prime Minister had done that day.

The next day I asked the Prime Minister who was right: was it he who said it was an efficiency dividend or was it the Minister of Communications who said that it was not an efficiency dividend. The answer that the Prime Minister gave was: 'Well, it is effectively an efficiency dividend.' He was asked the question again in February this year, and finally he was prepared to answer the question truthfully. He admitted that it was cut and he admitted that it was a broken promise. He told us a little bit more—he told is what he really thinks of these cuts. This is what he said in answer to a question on 12 February this year:

We have broken and, frankly, it is just as well that we did …

That is what the Prime Minister really thinks of SBS—an organisation set up by a former Liberal Prime Minister and one of the key ingredients in what makes Australia the most successful multicultural country in the world. Not only has the Prime Minister broken his promise, but he is proud of it. 'Thank God we did!' That was his answer to a question in this House in February this year. Now he wants to put more ads on television to help pay for it.

So how much would SBS make if this legislation were passed? Well, according to the government it is $28.5 million over four years, but, according to Free TV, that number is very different. They say it would be more like $147 million over four years. Both the government and Free TV have an interest in minimising or maximising that number. I take more seriously the number that is proposed by JP Morgan. Independent analysts at JP Morgan have looked at this as well, and their assessment is that the figure is somewhere between $88 million and $132 million over the forward estimates Whatever way you cut it, it is designed to cover up a cut. What is the impact, then, of this on SBS? Well, SBS has recently been in the news for a controversial TV program, Struggle Street, and members will know it well. It is a controversial television program that a lot of people watched.

The argument that many make in their submissions to the parliamentary inquiry is that legislation like this which increases the number of ads that can be broadcast in prime time on SBS will only encourage SBS to produce more content that pulls in ratings and pulls in advertising dollars—in other words to be more like a commercial television network. There is some evidence for that. The government's own efficiency review of the ABC and SBS admits that is a risk. At page 85 of that review it argues that:

… there will be greater pressure on SBS management to consider the trade-off of delivering on commercial expectations, against delivering those functions described in the SBS Charter.

Even the government's own efficiency review points to this as a concern. It is a real concern.

What about SBS viewers? The argument from the government and from the minister is that this will not mean more ads on SBS—SBS will still have a cap of 120 minutes a day for advertising. That may be right, but the fact is it will mean more ads when people are watching TV—more ads during prime time. Instead of ads being on in the middle of the night when most of us are asleep, those ads will be on when most of us are watching television between 6pm and midnight. The 61,000 people who signed this petition do not want more ads on TV when they are watching their favourite programs. I am pretty sure that most Australians do not want more ads on TV, either. And they also do not want their government to break their promises. The Prime Minister promised the night before the election 'no cuts to SBS. He should stick to that. It is as simple as that. The government should just do what they promised. They do not need to introduce and pass this legislation in order to fund SBS; all they need to do is keep their word. If the government seriously think that it is a good idea to cut the budget of SBS and to replace that funding by putting more ads on television during prime time, then they should take that to the next election, because the opposition will not help this Prime Minister to cover up another broken promise.

6:30 pm

Photo of Nola MarinoNola Marino (Forrest, Liberal Party) Share this | | Hansard source

I rise to speak on the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015. I was interested in one of the comments made by the previous speaker, and that was that SBS puts ads on television in the middle of the night when no-one is watching. I can imagine that sales pitch to a potential advertiser: 'Have we got a deal for you! We're going to put your ads on in the middle of the night when no-one is watching; you can pay for these ads, but actually no-one is ever going to be watching them!' What a comment to make; that is just astounding. The interesting thing from the previous speaker, too, was again he is living in a different world—totally ignoring the billions of dollars in debt and deficit left by the previous Labor government, which he was very much a part of. That is the one thing that has been missing in much of the debate.

SBS is the youngest of Australia's five free-to-air networks. It is a multicultural broadcaster specifically aimed at Australian citizens for whom English is not their native language. It was first announced in the late 1970s in Western Australia. Perth was added to the network in 1986; we had to wait awhile. Labor planned to merge SBS with ABC in 1987. That was one of the things that I noted as part of doing some work on this particular bill. Of course, SBS operates under a mixed funding model.

While the majority of SBS's operating budget is funded by the Australian government, the remainder is drawn from SBS's commercial activities. It certainly would not be drawn too much from ads put on the middle of the night deliberately so that no-one would see them. I think that you would be struggling to sell that concept. Commercial activities include advertising and sponsorship, but not those put on at time when no-one is watching or no-one is going to pay to advertise.

But, like all other areas of government, we have to deal with the facts. We have to deal with the financial situation left to us by Labor. We cannot pretend that the debt and deficit is not there. In 2014, the Department of Communications conducted an efficiency study to identify savings that could be made in the back-of-house operations of the ABC and SBS. Of course, in conducting the review, the government intended to dispel the myth from the other side of politics that savings can only be achieved by cutting programming or services. In spite of the comments from those opposite, the target was savings that could be made without reducing the resources available for programming.

In 1990, SBS was originally given government approval to seek sponsorship funds for the telecast of the FIFA World Cup. That was the predecessor of SBS in this place. The study that was done in looking at targeting savings made without reducing resources available for programming identified an opportunity for SBS to earn additional advertising revenue without increasing the maximum amount of advertising that it was permitted to show over a 24-hour period. SBS currently has a strict limit of five minutes of advertising per hour, which is a maximum of 120 minutes of advertising shown each day. However, like all the commercial stations operating in Australia, SBS earns the majority of its advertising revenue during peak viewing times, which is completely contrary to what the member for Blaxland had to say. This includes the daily peak hours of 6 pm to 10 o'clock at night and when it broadcasts special events such as the recent soccer grand final, the Tour de France or the soccer world cup.

We need to allow a more flexible approach, enabling greater advertising at times of better viewing numbers. This flexibility is essential. This bill will enable SBS to show up to 10 minutes of advertising per hour during higher rating programs to increase its overall advertising revenue, but allow it to stay within the daily overall limit of 120 minutes. The counterbalance will require SBS to schedule less advertising during other hours so that the 120-minute daily cap is not exceeded. Again, in spite of the comments we heard opposite, the 120-minute daily cap on advertising is still well below the 350 minutes per day that the commercial broadcasters can devote to advertising. Members should note that SBS has many programs, particularly sporting programs, which have natural breaks that are suitable for advertising well in excess of the five-minute limitation at present. We should also note, and it should not be forgotten, that it has been SBS's soccer coverage which brought the game to Australian prime time television for the first time. The FIFA World Cup telecasts have delivered the networks highest ever ratings.

We also should note that SBS does not currently fill 100 per cent of the time that it has available for advertising across all channels and markets, particularly in the case of regional markets, where SBS is regularly unable to fill five minutes of advertising per hour per channel, even during peak evening viewing times when its higher rating programs are generally shown. In markets with insufficient demand, the additional flexibility afforded by the proposed measures is unlikely to result in significant change to the amount of advertising that SBS attracts. So the benefit of this is most likely in the metropolitan markets.

The additional advertising revenue received by SBS is highly unlikely to have a material impact on the advertising revenue of the commercial broadcasting industry, totalling $3.8 billion in 2012-13 and $3.9 billion in 2013-14. In contrast, SBS revenue from advertising and sponsorship over the same period was just $58 million in 2012-13 and $73.4 million in 2013-14—a share of less than two per cent. The 2013-14 figure represents a peak due, as I said, to SBS's coverage of the 2014 FIFA World Cup. In a non-world cup year advertising revenue is less, at around $50 million to $60 million—around a 1.5 per cent share. It is anticipated that the SBS advertising measures will result in an increase in SBS's advertising revenue of around $28.5 million over four years from 2015-16.

The ABC and SBS efficiency studies also identified an opportunity for SBS to earn additional revenue through the use of product placement. Product placement is well known and recognised in commercial television, especially in cooking and food programs and sporting programs, where a branded good is promoted within the show itself. It is the fee a company pays to have their products either used or displayed, essentially to convince the viewer, the potential customer, that the product is the choice of the show or the star or a character. However, it goes much further than this in movies and the wider media all the time. Product placement is widely used to earn additional revenue and subsidise the cost of content production. SBS currently broadcasts programs purchased from all over the world which already contain product placement. However, SBS does not use product placement in its own commissioned programs due to a lack of clarity in the Special Broadcasting Service Act regarding its use. Not all programs are suitable for product placement, but some are.

This bill amends the SBS Act to specifically allow SBS to earn revenue through having product placement in its programming. It requires the SBS board to develop and publicise guidelines regarding the use of product placement, and to report on its use and earnings in the annual report. The same requirement exists in the SBS Act for the use of advertising and sponsorship announcements.

In the short term, additional advertising revenue will be directed towards meeting the government's efficiency savings from 2015-16, and making minor technical amendments to the Australian Broadcasting Corporation Act 1983 and the principal SBS Act to provide consistency with other broadcasting legislation and to remove redundant provisions. The amendments involve the insertion of some broadcasting definitions and terms in the SBS Act to make it consistent with the Broadcasting Services Act 1992 and the ABC Act, and to reflect the SBS activities that are provided in the current converging digital environment. It also removes redundant definitions in the ABC and SBS acts about election periods. In addition, the bill repeals a range of provisions from communications portfolio legislation which are spent or otherwise unnecessary. Repealing unnecessary legislation within the communications portfolio will ensure regulation only remains in force for as long as it is actually needed, and that remaining legislation is easily accessible.

This bill will give SBS an incentive to seek out new advertisers and advertising opportunities. It is important to note that SBS, being the multilingual and multicultural service in this space, is not just in entertainment. The information it broadcasts is critical. I can recall my own mother-in-law, who did not speak much English at all and certainly could not read English. For many years, until she was able to receive SBS programming, she often worried unnecessarily about, particularly, women's health issues. She would not necessarily believe the information that was given to her by her daughters or daughters-in-law, but when the information came by way of SBS and programs she could understand herself and hear for herself—when she received this information first hand—it was of immeasurable value to her, and to many other Italian women who lived in that community. It was information from an independent source, and it gave her information that she had not previously had access to.

SBS, as we know, is a vehicle for wonderful understanding—a connection—between the many different groups in Australia. It comments and connects on cultures and beliefs, on generations and intergenerational issues, for interest groups and various language communities. Having seen it first hand in a small community like Harvey, I know there are many others around Australia for whom this is such an important service. Look at the SBS charter—it must really meet the communication needs of Australia's multicultural society, including ethnic, Aboriginal and Torres Strait Islander communities, and it must increase awareness of the contribution of diversity of cultures in the continuing development of Australian society. These are very worthy parts of its charter, particularly in the current environment, that promote understanding and acceptance of the cultural, linguistic and ethnic diversity of the Australian people. In facing some of the national security challenges that we do, that understanding and that acceptance of cultural, linguistic and ethnic diversity are probably more important now than they have been—but for far different reasons. On that basis, I commend the bill to the House.

6:43 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | | Hansard source

I am opposed to the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015 because it is based on a lie. The last thing Australians want is more advertising on free-to-air TV. The last thing that Australians want when they sit down in the evening is more advertising whilst they are watching television. If this bill proceeds it will diminish the quality of viewing for Australians when they are watching the Special Broadcasting Service. This is yet another lie from the Abbott government. We all remember the now infamous interview that the Prime Minister gave on the eve of the last federal election when he gave an ironclad guarantee, a commitment: no cuts to the SBS or the ABC. The pre-election interview was astonishing for a number of reasons. Firstly, it was during that interview that the Prime Minister professed no intention to make significant or damaging cuts to the SBS. That is what he said, and here we are, still fighting to do the impossible: hold the Prime Minister to his word, hold the Prime Minister to the commitment he made to the Australian people on the eve of the last election.

What is even more shocking, even more striking and revealing, about the promise that was made was that he actually made it whilst appearing on the SBS. It was on an SBS program that the Prime Minister said there would be 'no cuts to the ABC or SBS'! You couldn't script this stuff—the irony. The irony of the bill that we are debating at the moment is that the commitment given by the Prime Minister prior to the last election that there would be no cuts to the SBS was given on an SBS news program. The deceptiveness of this Prime Minister is spellbinding, and it is contained in that commitment given on election eve.

Since then, we all know what has occurred. The government brought down its 2014-15 budget, featuring $53.7 million worth of cuts over five years to the SBS, $25.2 million of which was direct cuts. A further $28.5 million was cut on the basis of allowing SBS to alternatively raise revenue through legislative amendment to its advertising restrictions. That is the subject of the bill before the House this evening. The purpose of this bill is to amend the Special Broadcasting Service Act 1991 to allow the SBS to increase its revenue base through more flexibility in the scheduling of advertisements and to earn additional revenue through the use of product placement in its commissioned programming. The bill also makes minor technical amendments and changes to the SBS Act and the ABC Act to provide consistency with the Broadcasting Services Act and to repeal redundant provisions in both of these acts.

The SBS has restrictions on the amount of advertising that can be undertaken, in minutes per hour. Currently, there is a five-minute limit; five minutes per hour is the amount of time that ads can be shown during SBS programs. That equates to a maximum of 120 minutes of advertising being shown per day. This bill will amend the SBS Act to enable SBS to show up to 10 minutes of advertising per hour. In effect, it is doubling the amount of advertising per hour that the SBS can undertake during its programming, doubling the amount of advertising that Australians will see on one of our most popular free-to-air channels. This will allow SBS to schedule up to 10 minutes of ads during high-rating programs while scheduling less advertising during other hours so that the 120-minute daily cap is not exceeded. Translation: Tony Abbott's broken promise with regard to the SBS will result in more advertising during programs that more Australians like to watch on the SBS—programs such as Struggle Street, which has been very popular over recent weeks, and Eurovision, which was very popular. You are going to see more advertising whilst watching popular programs like that on the SBS.

I would argue that the last thing Australians want to see whilst watching the SBS is more advertising. More advertising is in no-one's interest. It is actually the antithesis of the objective for which SBS was established: to provide a multicultural broadcasting service that is easily accessible and in multilingual platforms for the Australian public. In that respect, the SBS has a vital role to play in the Australian media and social landscape.

The SBS was established in 1978. It has grown to feature five television channels—SBS ONE, SBS2, NITV, World Movies and Studio—and five radio networks—SBS Radio 1, Radio 2 and Radio 3, SBS Chill and SBS PopAsia. SBS online is also home to SBS On Demand video-streaming services. I am fortunate to represent a multicultural community, and I know how popular the SBS radio programs in particular are in the multicultural communities in my areas. NITV has an especially strong following in the electorate of Kingsford Smith, where I am honoured to have quite an active and participatory Aboriginal community that has produced some of our nation's best and most talented sportspeople and entertainers. NITV has some great sports programs and other artistic and cultural programs, and I acknowledge the importance of this channel and this service to the people of our electorate. And I pay tribute to everyone who works at NITV. I know that there are members of our community in Kingsford Smith who are employed by and who love working for NITV because of the importance of its service to the local community.

The stated purpose of SBS is:

… to provide multilingual and multicultural radio, television and digital media services that inform, educate and entertain all Australians and, in doing so, reflect Australia's multicultural society.

Of course, one of Australia's great strengths and proudest features is our multicultural makeup. That being the case, SBS, like the ABC, is part of Australia's identity. Indeed, for decades, it has shaped the way we see ourselves as Australians. Sadly, this government's funding cuts have affected the operations of SBS; and, in planning for its future, earlier this month SBS pulled out of digital television service Freeview. Addressing the move, the SBS spokesperson who made the statement said:

Last year, SBS's funding was cut by the federal government by $53.7 million over the next five years. As an organisation which is already lean and efficient, SBS has sought to find further efficiencies to absorb this cut, focusing on back-office measures in order to protect SBS's unique content offering for Australian audiences …

That is the view of SBS management, pointing to the fact that, because of budget cuts, the team that manage the SBS have had to find savings through some of their content. As a result, sources told The Australian newspaper, SBS was likely to lose its place in Freeview's high-profile marketing campaigns. This is a direct result of the Abbott government's budget cuts affecting the Special Broadcasting Service, which is near and dear to the hearts of many, particularly in multicultural communities throughout Australia. It will affect programming and it will affect the viewing quality for those people who use this important service. Again, these are cuts that the Prime Minister promised would never happen. He gave that commitment to the Australian public on SBS TV on the eve of the election.

It is a great shame that, this week of all weeks, Labor is fighting to defend the SBS from the Abbott government's axe, particularly after the broadcaster's highly successful weekend. I refer of course to the wonderful Eurovision broadcast on the weekend. I went out for a jog early on Sunday morning and I came home to see my wife and two daughters glued to the television screen. I asked what was going on and I was quickly told to shush up because the voting on Eurovision was taking place. Not only in my household but in many other Australian households, people were glued to SBS seeing what was going on in the Eurovision Song Contest. For over 25 years, SBS has been delivering this wonderfully wacky and popular song contest. Its popularity, I think, can be attributed to the fact that Australians are a proud multicultural community and many of our migrants come from many of the nations that are strong participants in the Eurovision Song Contest—populations such as the Greeks, Turkish, Italians, Irish, Serbians, Maltese, British and the like. SBS has made sure that these communities can still enjoy having the cultural juggernaut that is the Eurovision Song Contest delivering a wonderful sense of nostalgia and entertainment. This year the strength of that connection with the Australian people paid off big time, with Australia's participation in the Eurovision Song Contest for the first time ever. I must say that it was good to see a Maroubra boy, Guy Sebastian, representing Australia in the Eurovision Song Contest. He did us very proud, placing fifth in the voting despite his rookie status.

Over 4.2 million Australians tuned in to watch for at least five minutes the Eurovision semi-finals and the grand final on the weekend. Eurovision provides a shining example of what SBS is capable of, particularly when it is supporting and celebrating Australia's multiculturalism and international interests. SBS provides wonderful content for the Australian community. It's multicultural affairs programming and also its news and entertainment broadcasts are very popular. It provides good quality documentary content that analyses and probes particular issues that are important to Australian society. All of that is being undermined by this government's shameful attack on the Special Broadcasting Service, by this government's misrepresentation of the facts, by this government's breach of its commitment to the Australian public which was delivered by none other than the Prime Minister on none other than SBS on the eve of the last election. It is shameful that this bill is before the parliament. It is a reform that is based on a lie. It will diminish the quality of viewing. As I said at the outset, the last thing Australians want is more ads on free-to-air television in this country, but that is exactly what they are going to get if this bill passes the parliament.

6:56 pm

Photo of Melissa PriceMelissa Price (Durack, Liberal Party) Share this | | Hansard source

I rise today to speak on the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015, an important subject in my electorate of Durack with its diverse population of 90,000-odd spread across 1.6 million square kilometres, the biggest and most remote electorate in Australia and the second biggest electorate in the world. SBS, with its multicultural television program offering, provides a very valuable service to the people of Durack and, indeed, the people of Australia.

The bill proposes changes to SBS in terms of advertising, product placement and revenue opportunities for SBS. It includes measures that provide SBS with increased flexibility on the scheduling of advertising and clarifies SBS's ability to earn revenue through product placement during programming. It does not change the current restrictions on the overall amount of advertising—120 minutes per 24 hours. Importantly, this does not represent the commercialisation of SBS. SBS currently has a limit of five minutes of advertising per hour, adding up to 120 minutes a day. Like other broadcasters, SBS earns the majority of its advertising revenue during peak viewing times between 6 pm and midnight or when broadcasting special quality events such as Eurovision, about which we have just heard in great detail. This bill would enable SBS to schedule up to 10 minutes of advertising at higher rating times and less at slower times during lower rating programs. The 120 minute daily cap remains unchanged, as opposed to the 350 minutes per day that commercial broadcasters can allocate to advertising and revenue generation.

Like advertising, product placement—such as perhaps wearing a West wetsuit or showing someone drinking a glass of exquisite Leeuwin Chardonnay—earns revenue and subsidises the cost of actually making television programs. With more flexibility of product placement, SBS could increase its earnings—in particular, during the broadcasting of popular cooking programs. Currently SBS acquires programs for broadcast which contain product placement. However, this placement has been made by and for third parties well before SBS has considered acquiring and broadcasting the program.

Due to the ambiguity currently in the SBS Act, SBS does not currently use product placement in its own commissioned programs. Obviously, this needs to be changed, and we need to create a level playing field. Accordingly, the bill amends the SBS Act to specifically allow SBS to earn revenue through having product placement in its own programming. I welcome this. The new measures will inevitably lead to an increase of approximately $28.5 million in SBS's advertising revenue over four years from 2015-16. This, of course, is against the backdrop of a reduction of funding to SBS of some $50 million.

Opposition to the amendments that I have been speaking about are of course to be expected. It is the way of the commercial world and the way of those opposite as well, but I make this next point very strongly. Let's consider 2013-14, which was the World Cup year with higher-than-normal ratings. SBS earned some $73 million in revenue from advertising and sponsorship while the commercial networks earned $3.9 billion. This represents a share of less than two per cent. This means that, when the proposed amendments become law, even if SBS's revenue growth were at the expense of commercial broadcasters, it would constitute a minimal impact on their overall revenue.

I refer to the submission to the Senate Environment and Communications Legislation Committee regarding the amendments we are discussing here today. This submission was made by the Federation of Ethnic Community Councils of Australia, also known as FECCA. Not surprisingly, FECCA has expressed its disappointment over the funding reduction; but, notwithstanding the budget cuts, FECCA still supports this bill—specifically schedule 1, which provides SBS with its advertising flexibility. In supporting the bill FECCA notes that the change will not increase the daily advertising limit of 120 minutes currently permitted but will potentially lead to that $28 million that I referred to earlier in net incremental revenue opportunities up to 2018-19. FECCA believes that the additional advertising revenue is necessary to ensure the role of SBS in supporting multicultural communities is not diminished.

The proposed amendments must be debated in the context of their value to society as a whole. Australia, as we know, is a multicultural society, and SBS was created to service our population by providing appropriate cultural and linguistic broadcasting services. Nothing has changed. Australia remains proudly and fiercely multicultural. Remember: with the exception of Australian Aboriginals, we are all migrants in this country. Australian people have been drawn predominantly from the people of other nations and have built a great nation. As a nation of migrants, we celebrate our origins in numerous ways, from festivals to Australia Day and Harmony day, and, of course, in food, entertainment, history and also heritage. We collectively rejoice in our uniqueness and the hard work of our migrants, who have created this nation and our have-a-go approach to life.

Last year, new Australian citizens were drawn from more than 150 countries, and we proudly claim to the world and to our own to be one of the most culturally diverse countries in the world with our rich mix of colour, flavour and movement. As a community, as the parliament, as a nation and as the member for Durack, we are all very proud of the bipartisan support for multiculturalism in Australia. In my remote and rural electorate of Durack we have at least 160 different countries represented. Seventy-two per cent were born in Australia, with the balance born in places as diverse as Vietnam, Yemen, South Sudan, Monaco, Greenland, Mexico and Botswana. More commonly, though, you will not be surprised that they were born predominantly in England, New Zealand, the Philippines, South Africa, India, Germany and Ireland.

We all know of the high value of SBS to our constituents. Indeed, I am also a fan of SBS and its diverse program offerings that reflect the culture of my friends, neighbours and constituents in Durack. As we continue to debate the amendments to this bill let us give heed to the fact that SBS provides us a much-needed quality service, from education in news to education in current affairs to the Australian population, not only for our ethnic brothers and sisters. Yes, it is a service, and, like all services, it is one that my government is proud to support.

The Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015 includes measures that provide SBS with increased flexibility in the scheduling of advertising and clarifies SBS's ability to earn revenue through product placement during programming. In the interest of long-term sustainability SBS must be allowed to move with the times, change, find ways to generate more income and provide a service for our Australian multicultural groups. It is all about balance—balancing the imperatives of commercial TV with the requirements of a special broadcasting service.

Now more than ever SBS has an important role to encourage and promote tolerance, understanding and acceptance of multicultural Australia. It must be sustainable and is important to be here for the long haul. On that basis, I recommend this bill to the House.

7:06 pm

Photo of Justine ElliotJustine Elliot (Richmond, Australian Labor Party) Share this | | Hansard source

I also rise tonight to speak on the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015. On this side, as previously indicated, we do have many concerns and oppose this bill. We have concerns about SBS being essentially forced to have to increase their advertising due to the fact that there are so many severe budgetary cuts brought in by the Abbott government. This bill will essentially change the fundamental purpose of SBS.

Let's have a look at the bill itself. The government is amending the SBS Act in two key ways—firstly by increasing its potential revenue base by creating a so-called 'more flexible' scheduling of advertisements. This would mean allowing for an increase in the amount of advertising that can be shown on SBS in prime time, which is, of course, between 6 pm and midnight. That is an increase from five minutes per hour to 10 minutes per hour. This would be within the existing limit of no more than 120 minutes of advertising in any 24-hour period.

Secondly, this bill amends the SBS Act to specifically authorise SBS to earn revenue through product placement in its commissioned programs, including food or sports programs. This would then allow for additional earnings through the use of product placement endorsements in its commissioned programming. Also, the SBS Act's definition of 'advertisements' has been changed to allow the use of product placement. Whilst schedule 1 does not define 'product placement', item 3 specifically authorises SBS to broadcast product placements and to include product placement in its digital services. SBS will also be required to develop publicly available guidelines on the kinds of advertisements and sponsorship announcements it is prepared to broadcast. It will also need to address the kind of product placement it is prepared to include in the programs that it broadcasts.

The act which established SBS programs and corporation had already allowed for the introduction of advertisements. Up until 2006, advertisements were noninvasive or were allowed before and after programs or during what were labelled 'natural program breaks'. The advertisement times were strictly limited to five minutes per hour and did not include station promotional material. Since 2006, the SBS management has interpreted 'natural program breaks' to encompass breaks which are designed to occur within scheduled programming.

As I stated before, SBS is currently permitted to broadcast only 120 minutes of advertising and sponsorship announcements within a 24-hour period. The government would have us believe that all these new changes they have brought in are necessary to ensure SBS becomes more self-sufficient and less dependent upon Commonwealth funding in order to maintain current service levels. But, indeed, like all things this government do, this action is in fact quite misleading. It is meant to disguise their ideologically driven attack against public broadcasters. The fact is that these changes are occurring due to the cuts to SBS. The deep cuts imposed on this organisation are cruel and unjust. Many concerns have been raised in relation to these cuts. Commercial broadcasters have made claims—and rightly so—that by allowing and, indeed, compelling SBS to engage in the pursuit of advertising dollars it will effectively transform SBS into a fourth commercial broadcaster. This means it would cease to be a public broadcaster, of course, free from the associated constraints and commercial realities.

Others further argue that by compelling SBS—a public broadcaster—to compete in a finite revenue pool it effectively would result in a subsidy from them to administer what is essentially supposed to be a public asset. Those who maintain that the SBS and ABC as public broadcasters should be free from the reality of advertisements also argue that the proposed changes would limit their ability to operate within their charters. That is what they need to be doing—operating within their charters. SBS's charter clearly directs SBS to promote and contribute to the diversity that is multicultural Australia. We do not need to have SBS in the position where they are essentially forced to be second-guessing what their commercial partners may prefer. Rather, they should be focused on programming that specifically delivers upon their obligation.

Moreover, as a result of the proposed changes, the broadcaster could possibly be forced to be in the position to be more inclined to place the needs of advertisers before the needs of viewers. Thus, programming could potentially be assessed on its ability to raise revenue, not on its potential to deliver on charter obligations, which should be the primary objective of SBS.

All these changes are occurring due to the Abbott government's breaking of its election commitment. We all remember the night before the election when the Prime Minister, who was actually looking straight down the lens of the SBS camera, said the words that there would be no cuts to the ABC and no cuts to the SBS. Clearly this was untrue. That is exactly what happened; there were cuts to both, as well as cuts to many other areas that we have spoken about in this place many times.

On budget night last year the government cut more than half a billion dollars out of the ABC and SBS. They were very harsh cuts. This year's budget papers have revealed the extent of those cuts and how wide-ranging they are. There it was in black and white in those papers—some 215 ABC and SBS employees have lost their jobs because of the government's cruel and unjust cuts.

Despite those previous false claims from the Prime Minister of no cuts to SBS, the Abbott government in their 2014-15 budget also included a funding cut of $53.7 million over five years for SBS. That is a huge cut, indeed. $25.2 million of these cuts were direct to the organisation. SBS have, of course, been forced to comply with these cruel cuts. They had to streamline many of their back office functions, which we all know means redundancies. That was the reality. A further $28.5million was cut on the basis of allowing SBS to alternatively raise the revenue. In other words, they were told, 'Forget about your core business. You will now have to compete against commercial providers and raise income to cover what this cruel government has taken away from you.'

All of these changes are subject to the legislative amendment to SBS's advertising restrictions being passed. The Minister for Communications has made it clear that if the bill does not pass then SBS are on their own and will not receiving any additional funding. SBS have confirmed the position they will be put in by this bill. They will be forced to make up for this funding cut through further slashing of jobs and services from within the organisation. The SBS submission to a Senate inquiry on this bill states that SBS would be left with very few options to achieve further savings outside of SBS programming. At the inquiry, many senators and members raised concerns which focused on their fears that this bill will increase the amount of time allocated to advertising on SBS. Fortunately, at least at this stage, that is not the case. The number of minutes SBS are allowed to allocate to advertising and sponsorship announcements will not change under the proposals in this bill. There will, however, be more advertising shown in peak viewing periods. Many people have concerns about that.

As we know, SBS play such an important role in Australian life today. They stand at the forefront of so many great initiatives. Much of the programming they provide is thought-provoking and sometimes very edging sometimes viewing, which creates such a great difference. SBS also create such an important format for ethnic communities, both providing a valuable way to communicate with specific groups and providing a way to greatly expose and enlighten the general community within Australia to many different aspects of our wonderful multicultural society. It is these great aspects of SBS that we should continue to celebrate and nurture, not cut further. We have such great provision of informative multicultural programming, very in-depth news stories and great content that really does showcase the great diversity of our modern Australian community.

Labor is very mindful of the industry feedback which points out the need for caution so as to not turn SBS into just another commercial broadcaster. Labor believes that, as a public broadcaster, SBS needs to be driven by a purpose more important than profit. We believe they need to have the capacity to fulfil their charter, and that should be their primary obligation. We are concerned that, if this bill were to pass, the scales would be tipped too far in favour of profit over the public benefit—the massive public benefit—that can be maintained by ensuring that SBS is kept essentially as a public broadcaster and is kept in the position of adhering to their charter and their responsibilities and the obligations that come with that.

This bill, as it currently stands, is really a recipe for more ads during the most popular shows on SBS. That is the commercial reality of what will happen in those prime time periods and very popular shows that will be on. The reality is that there will be a whole lot more advertising during that time on SBS. That is, in fact, what will happen. Indeed, there has been a large outcry right across the community in relation to this bill and some of the impacts upon SBS. Some consumer groups, particularly Save Our SBS and GetUp, are very strongly opposed to this bill, and they have made those concerns very well known. It is evident by the collection of more than 61,000 signatures on a petition calling on the parliament to oppose the bill, and I know that concern is spread right throughout the community. Indeed, in my area too I receive a lot of feedback and concern about cuts to SBS and about cuts to ABC as well.

The main tenet of the argument put forward by groups such as the ones I mentioned—Save Our SBS and GetUp—is that further commercialisation of the SBS would undermine the ability of SBS to adhere to its charter responsibility, which is to:

… educate and entertain all Australians …

Effectively, what will happen is that we will see the creation of a fourth commercial network by stealth, if you like. That, as I say, is a concern expressed not just by those groups but, indeed, by thousands and thousands of people who have signed those petitions. In fact, Save Our SBS argues that the bill's intent is to increase dependence on advertising and may lead to SBS being forced to adopt a more populist approach to their broadcasting. Save Our SBS also cites some internal studies that were undertaken both in 2008 and 2013 in support of its claim that they would adopt a more populist stance.

They would indeed be forced to adopt a more populist stance because the increase in prime time ads could lead to deficiencies in the delivery of their charter, according to all the studies that I cited before. The studies further state what many already believe to be the obvious consequence. The reality is advertisers will want and, in fact, demand access to what is one of SBS's most valuable commodities, the very loyal audiences. They will have very high viewing audiences, and it is those that advertisers want to be able to access in prime time in those very important shows due to the very widespread respect that people have for SBS and their programming.

In Save Our SBS's view, when advertising was between programs only, they viewed that the viewer was more important. Their concern is that now, with these proposed changes, the scales will tip in favour of the advertising client and they will become the priority. It will not necessarily be the viewer, who should be at the heart of all the decision making. It should not be driven necessarily by what the advertisers may be wanting or may require. As I have said, studies into in-program advertising agree with the assessment that it has made it increasingly difficult for SBS to meet its charter obligations as a result of an increase of this advertising just by the natural conflict that it does create.

The proposed changes in this bill could, therefore, have a detrimental impact on the very integrity of the SBS, placing the needs of advertisers before the needs of viewers, as programming could be assessed potentially on its ability to raise revenue and not so much on its ability to meet the charter or upon its ability to reflect the needs or wishes of the communities that they endeavour to represent. It may mean you will not have the great diversity of programming or the thoughtful, provoking programs that we see on SBS that I think all of us would know can challenge us and entertain us, and we would not want to see that in any way sacrificed for other agendas. In a sense, seeing SBS just becoming another commercial provider would indeed be quite detrimental.

It is a concern to see these cuts. This year's budget really is a statement of, if you like, a recommitment of last year's budget, in terms of its cuts and the impact of those cuts. We have seen them across so many areas. As I have said before, we saw the now Prime Minister saying before the last election there would be no cuts to the ABC or SBS, and that is precisely what we have seen. So it is a broken promise, and it is one that many people are very concerned about in regional areas as well. They see that reflected as the responsibility of the National Party. I know ABC and SBS are important everywhere, but they are very important in regional and rural areas, and people are very, very concerned about any cuts—potential and real cuts like we are seeing.

As I am concluding, we should never forget the Prime Minister's statement before the last election when he said:

No cuts to education, no cuts to health, no change to pensions, no change to the GST, and no cuts to the ABC or SBS.

Yet that is exactly what we have seen. It is the Abbott government's dishonesty and incompetence that continues to hurt Australian families. Many families that did rely, firstly, on jobs generated by our great public broadcasters have been impacted. But our broader community has been impacted by the very unfair and unjust cuts to ABC and to SBS, two great institutions that this government promised not to cut. Yet, in government, that is precisely what they did, and I know that many people in regional areas certainly condemn the Abbott government for those cuts. It has been very harsh and it has meant their access to services has decreased. I certainly call on the government to reverse these very harsh cuts.

7:21 pm

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

It is good to have the opportunity to speak on the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015. The changes proposed in this bill take place not in a bubble but the broader context of the economic situation that the government faces, particularly the budgetary situation that the government faces. The reality is that all aspects of government have been affected by the appalling legacy of debt that was left behind by the previous, incompetent Labor administration. Left untouched, the trajectory of government debt under the previous regime was heading towards $667 billion. The numbers get so big that they become difficult to conceptualise, but that is two-thirds of a trillion dollars—that is, 'trillion' with a 't'. That is where things were headed under the previous government. We do need to reflect on that because this, like all legislation, occurs within a context of the absolute need for budget repair.

One of the reasons things got so bad under the previous government was that, even when they projected they would spend more in a particular year, they spent even more again. The projection would have said: 'Well, actually, spending is going to go up quite a lot next year'; but then, not only did they spend the extra money they said they were going to spend, they spent more on top of that.

It happened basically every year under the previous Labor government. In 2009-10 they spent $1 billion more than they said they would in their budget. In 2012-13 they spent $6.3 billion more—the actuals versus the budget. If you are a business and you say, 'Our costs this year are going to be $1 million', and it turns out they are maybe $1.2 million or $1.3 million, that is a big problem—as it has been for Australia. In 2011-12 they spent $11.9 billion more than the large amount that they projected to spend. In 2008-09 they spent $32.1 billion more than they themselves projected in their budget. This is the type of administration that the Australian people rightly rejected. The Australian people reflected on a whole range of things that went wrong from a financial perspective during the last term of government.

Speaking, as we are today, broadly about the communications area, one of the things on which the Australian people reflected was the absolute monstrosity that was the management of the NBN under the previous Labor government. You would recall the stories—the breathless, short conversations taking place in various plane trips around the country as the former minister for communications sought an audience with the then Prime Minister. He was very difficult to find. The conversations were very short, but they had lasting and dramatic negative consequences. What happened under the previous government in regard to the administration and planning of the NBN will be remembered in Australian history as one of the worst examples of rank economic mismanagement that our nation has ever seen. To purport to commit tens of billions of dollars of spending literally on the back of a couple of coasters is something that should never be forgotten. I am sure when historians reflect on the Rudd-Gillard-Rudd years no area will be more symptomatic of the failure and incompetence than that one.

You would remember that the NBN was going to cost a total of $10 billion, but only $4.7 billion of that would be borne by taxpayers because private investors were going to come in and buy or invest in the rest of it. That did not happen. It was then going to cost $43 billion, and again private investors were going to come in and buy 49 per cent of it. That did not happen either. Private investors sort of said: 'Okay, well, you have some projections. How's this thing going to make money?' When they examined the reality, they found that there was really nothing under the bonnet in terms of the substantive work that needs to be done when you are contemplating even a small investment let alone tens of billions of dollars.

The review that was commissioned late in 2013 found that the NBN was going to cost $73 billion, 100 per cent of which would have been borne by the taxpayer. Just extraordinary. This was something that was committed to, without detailed work being done, on the basis of a couple of verbal conversations while flying around the country, at the level of the highest office in the land. We should always remember that, because it really does reflect very accurately and indeed very poorly on the previous government. We do have a difficult budget context, because so many bad decisions were made.

It is interesting to look at the proposals of the current opposition. You would have thought that, having gone through that very difficult six-year period—we will learn more about that period in an upcoming ABC documentary—some sort of internal analysis, a bit of reflection, might have been called for and that might have resulted in a more prudent and modest approach to planning in the future—certainly, to at least do your numbers.

We had a very curious situation recently, just in the last two weeks, when the Leader of the Opposition in his budget reply speech made the commitment that $100,000 degrees in what is known as STEM—science, technology, engineering and mathematics—would be HECS-free. That was all part of the opposition leader's plan to position himself as something of a champion of the modern economy, which is absurd based on the previous government's record. The calculation is pretty simple. You have $100,000 degrees. How much is the average HECS debt for a STEM student? You multiply $100,000 times the debt, and you get the amount. That is it. It is not that complex. You would think that it would have been quite easy to come into this chamber with a very clear understanding.

But what in fact happened, curiously, was that on budget night the cost was estimated by the opposition to be about $300 million. At some point, somehow, and do not ask me for the detailed backstory on this, it became $45 million. It was only going to cost $45 million. Then the next day it was over $1 billion. We obviously had to cost this policy, and it turns out that it is $2.25 billion. The average cost of a STEM degree is about $22½ thousand in HECS. If you multiply that by $100,000, it is $2.25 billion. It is really quite a simple calculation. This is really quite extraordinary and demonstrates that no lessons have been learnt by the other side.

The opposition leader wants to be perceived as a forward-thinking investor in technology with the start-up investment fund he bravely announced. As the Minister for Communications said earlier, the notion that an opposition with no business experience and no personal understanding of the technology sector could lead a technology boom in this country is really quite absurd. You will recall Kevin Rudd with a laptop in 2007—this time it is the opposition leader clutching some convertible notes. In both cases, it is a very unimpressive spectacle.

We do have problems with the budgetary situation. One of Labor's proposals is to tax the hardworking people who have saved diligently for their retirement through the superannuation system. That is a bad plan. It will affect more than 100,000 people and do very little for the budget. It will punish people who have done the hard yards and saved for retirement—in many cases, over 40 or 50 years.

Under Labor, costs were running at about 3.6 per cent a year above inflation. That is an unsustainably high level. What we have done is bring that down to about 1.5 per cent per year above inflation. So obviously, in order to effectively stand still, government spending would have to keep pace with inflation. Our budget proposes about 1.5 per cent above inflation. Government spending under our budget does increase but it increases at a markedly more modest rate than we saw under the previous government. That is entirely appropriate, because we are not here to spend people's money on a whim. We are not here to throw it around like it is ours—it is not. We must always remember that taxation is paid not voluntarily but through the force of law, and there are significant penalties for people who do not pay their taxes. We are saying, in taking that tax revenue, we have a very solemn obligation to spend it as sensibly as possible and as modestly as possible. This government is very committed to that.

Part of this broader picture is the area of communications. There are many public broadcasters around the world that have some form of advertising on their schedules. Channel 4 in the UK is a well-known public broadcaster. About 84 per cent of its revenue came from advertising, in 2011. CBC, the Canadian Broadcasting Corporation, has had no restraints on advertising since 2009. So the government believes it is sensible, in an environment of difficult economic circumstances, to enable SBS to have a further limited capacity to take on advertising. The increase in the capacity of SBS to take advertising, particularly around prime time, will enable it to generate some modest additional revenue. We believe this is sensible in the context of a very difficult budget position—which has been created entirely by those opposite.

As we reflect on SBS and the change in its rules related to advertising it is appropriate to think about the broader context in which this is occurring, which is the significant change in the television industry itself. I used to work in TV for quite a few years and have some understanding of the industry. It is an industry that is undergoing immense change. We had a situation, until very recently, where the only way you could get a moving picture into a home was through broadcast spectrum. Broadcast spectrum is parts of the air that are conducive to sending out a broadcast signal. That was an incredibly compelling business opportunity, because people wanted to watch moving pictures in the home and no-one could do it other than through free-to-air broadcasters.

The compact reached between the broadcasters and government of the day was that they would pay for that special privilege through licence fees. Licence fees are levied as a proportion of revenue. Historically, in Australia, the rate was very high—around nine per cent of total revenue was paid in licence fees. In recent years those numbers have reduced. It varies from broadcaster to broadcaster but is around 4½ per cent; it has approximately halved. That was done by the previous government to reflect the changing circumstances, the fact that the free-to-air television industry had given up a large amount of broadcast spectrum—to be used for other purposes—which could then be sold. Indeed, they have been subsequently.

As we look at the changing media industry—we see the launch of subscription video-on-demand services; we see the proliferation of literally hundreds of thousands of sources of online video—it is an argument to look at the regime that governs the free-to-air industry, just as we have looked earnestly at SBS and the package of measures before the House today. It is appropriate to look more broadly, to consider whether or not the regulatory regime that we have in place in free-to-air television is entirely appropriate or could be updated. And it is appropriate to consider arguments related to license fees and other issues, in that context. This legislation is important. It helps to repair the budget and I commend it to the House.

7:36 pm

Photo of Ed HusicEd Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | | Hansard source

There is only one reason why we are considering the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015 tonight, and that is that, on election eve, in a range of commitments that were given by the then Leader of the Opposition, now Prime Minister, Tony Abbott, with hand on heart about what would happen, designed to influence the way the people voted at the election, a commitment was made that there would be no cuts to the SBS. Knowing that there was a strong level of support within the community for public broadcasting, the Prime Minister went out of his way, repeatedly, to indicate that there would be no cuts to funding. Subsequent to that, he got into office and, as we have seen since the 2013 election, all the commitments that were made—and support was secured off the back of those commitments—were trashed. We had a situation where the public broadcasters were to lose funding. This is an attempt to try and make up for that. While the coalition dresses this up as an efficiency dividend, it is clear that it is a cut, and the public broadcasters have no choice but to attempt to do these types of things to secure more advertising in an attempt to make up for funds lost. Financial pressure is exerted on them by the coalition, which many people know in their heart of hearts does not support public broadcasters, because, for quite some time, it has maintained a position—that is unsubstantiated—that the public broadcasters are completely anti-coalition. As a result, the public broadcasters face this type of punishment, through lower funding, greater pressure on their operations and therefore less capacity for them to undertake the type of broadcasting that the coalition believes is against its political interests—which is complete and utter rubbish.

So we have this bill. Labor has already indicated that it is against the proposed amendments to the SBS Act because these changes are a covert attempt by the Prime Minister to force SBS to run more advertising to earn money, at the same time as he is cutting its budget, in clear breach of an election promise. These amendments are a blatant attempt by the government to turn SBS into another commercial broadcaster, bearing in mind that commercial broadcasters are already under financial pressure of their own. But the coalition intends to turn SBS into a commercial broadcaster instead of letting it focus on its main objectives, one of which is to effectively be the country's main multicultural broadcaster.

People in my area have developed a particular view about SBS, and rightly so. SBS has not endeared itself to Western Sydney, and in particular the areas of Western Sydney that I represent in this place. In fact, its actions over the last few weeks, with specific reference to a particular program, Struggle Street, have done nothing to engender support for SBS. If anything, they have turned the views of the people that I represent in this place quite against SBS, and rightly so. In its own charter, SBS's key objectives are to promote diversity in Australia and contribute to the understanding and acceptance of cultural, ethnic and socioeconomic diversity within the broader community. Like many others who valued SBS growing up, I certainly operated on the belief that this public broadcaster would offer a chance to broaden public perspective, that it would generate better appreciation of the challenges and demands of others in the community but not do so in a way that demeans or denigrates.

Recently, SBS did just that. It engaged in questionable methods in its filming and production procedures when producing the show that I have referenced, Struggle Street. It targeted a number of families within the electorate of Chifley. Many constituents have contacted me say—and they are right to say this—that the show reinforces improper, unfair stereotypes of the people living in this part of Western Sydney. But the biggest problem with the show is the ethical missteps that occurred by SBS and the production company, KEO Films. I want to focus in particular on one of the biggest ethical issues that stood out to me, which is the issue of consent. It became apparent that the people featured in this program by SBS did not give informed consent to be featured in this television program. It raises serious questions about how SBS and KEO Films went through the process of obtaining consent. These were experienced filmmakers and TV broadcasters dealing with inexperienced and vulnerable participants—participants who were not provided with copies of the release forms once they were signed, participants who were not offered independent legal advice before consenting to be filmed.

These issues are most serious, especially in the context of filming underage children and people with diminished capacity or disability. Out of the 11 people that the first episode focused on, one person is said to be suffering from cognitive impairment that causes periods of confusion and anxiety. Another was depicted to be frequently under the influence of the drug ice and had several scenes related to their drug use. One person suffered permanent brain damage from a motorcycle accident. Many more participants were depicted to be habitual drug users and frequently under the influence. Serious questions could legitimately be raised about the capacity of these people to give simple consent, much less informed consent. Brain damage and mental illness do not preclude a person from being informed about their rights or being able to advocate for their own needs. But their inclusion in a television show, particularly one of this nature, calls for a much more rigorous approach to consent than simply getting these people's signatures on forms.

Consent is the cornerstone of journalistic professional ethics, and it was simply breached here. Since SBS and KEO Films seemingly skirt serious ethical issues, I fail to see how this program is in line with the SBS charter or its principal functions and duties. In light of these serious breaches of conduct, I would certainly be calling on SBS and KEO Films to drop the legal action with which they have threatened the Mayor of Blacktown, Councillor Stephen Bali. Councillor Bali was right in his position to voice the deep objection of our area to the way in which people from our area were portrayed by this program, particularly in the promotions around this program. They were treated as simple comedic fodder by SBS, there to be denigrated and demeaned, and all for one purpose and one purpose only: to boost ratings. SBS management and KEO Films did not care one bit about the lasting impact on the people that I mentioned, and they certainly did not care about people in our area who have always had to struggle against stereotypes about their capability, their capacity and their right to participate in the broader society.

SBS believed that it could turn these people into a joke, and when we objected, through our own mayor, what did it try to do? It tried to threaten legal action against him for raising those concerns, simply in an attempt to shut his voice out of this debate and stop him from raising what many of us felt was unfair treatment by a public broadcaster that should have known better.

Councillor Bali and Blacktown council were simply standing up for our community and were wanting to make sure people were portrayed in a better, fairer light. There are many people across neighbourhoods in the electorate I represent who not only work hard to change their own lives but also open up opportunities for others. They do it with few resources, they have to fight to hold onto these resources and protect them wherever they can. The even bigger challenge is to help those who feel the weight of stigma and low esteem generated by it. For example, young people in the Chifley electorate regularly approach me, saying they will not list their residential address on resumes for fear of being turned down or denied job opportunities because employers view them in a less favourable light. This is what people in my area have fought for some time. I know their capability; I know their ability to participate. I know what they can bring in an employment or a community context because I see it every single day. Yet SBS thinks that by putting out, particularly promotions, that turn people in our area into a joke or a laughing-stock believe it is fair game and if you dare object to this, if you dare say that it is doing the wrong thing, it then tries to slap legal orders on you to threaten you from objecting to that. It is a disgrace that a public broadcaster can do this, particularly to people in my area.

I want to be able to say to the people in my area that I am enormously proud of them—people such as the students from Loyola Senior High who were on ABC's Q&A program recently, speaking out against Struggle Street, highlighting the fact that they do great things. Student Johanna Larkin highlighted the stigmatisation of Mount Druitt on a national level and delivered her question with such conviction that Struggle Street was debated between the audience and panellists for most of that episode of Q&A.

We have many other community groups in this area that are doing great things to change the fortunes of people who may otherwise not have the ability or the chance to fully participate in society. I think, for example, of Mount Druitt's Learning Ground, at Bidwell, doing terrific things in helping people get a second chance. It is, as I have said, often the home for second chances, helping turn people's lives around. They do so with the minimum of funding and they do not have a chance to show the great work that they do. Eagles Raps is at risk of losing funding in my area. It was portrayed in this particular program and was denied the chance to show all the good things that it does in its area and that I see quite often. What about the schools and community groups, the sporting organisations in our area that achieve well? Chifley College, Bidwill Campus have a rugby union team that is competing with some of the best in the state. You do not get to see anything that they do in this area. Ted Noffs Foundation and Mount Druitt Street University right now are compiling great stories and inspirational ones about the things they are seeing in our local community. They are having to do it in response to the negative views that are being expressed or being portrayed through this show.

I think that there should be more opportunity for good news. I certainly call on the public broadcaster SBS to undertake that to correct what it has done and the damage it has caused in our area. I would like shows to come out and be able to do just that, to discuss the types of social issues that are being dealt with in some neighbourhoods within our area, because the reality is there will always be something that you like about your neighbourhood and there will be things about your neighbourhood that you would like to change. That is not alien to any suburb in this country. However, people in our area have had to put up with these types of things for many years and do not need the reinforcement of it.

To be honest, I do not know in this case why the federal government refused to actually carry the concerns of people from western Sydney. Conservative politicians have no problem chipping public broadcasters if they are chipping other conservative politicians. But when we relied upon the government to actually say to SBS that what it was doing was out of line, they refused. I note the presence in the chamber of the communications minister, who expressed a view that it was not his job to be raising the concerns of people about Struggle Street. He said that it was not his job to influence the mandate of the broadcaster. Yet he felt—and I say this directly to him—that he could express his views about certain members or representatives of the public broadcaster the ABC on The Bolt Report. If it is good enough to raise those views there, Minister, why wouldn't you speak up for the people who have been mistreated by SBS's Struggle Street? —people in my area who do not deserve to be turned into comical material by SBS in the way that it did that promotion. I know for a fact that if you were there with the people in my area, you would feel just as strongly as I do. I feel that you should be speaking up for the people of this area, because I know in you, Minister, that you would not support that type of treatment. I think people would have benefited from you expressing the view, rightly so, that a promotion that categorised people in this area in that way was wrong and out of line and should not have been conducted in the way it was. And you could speak with equal fervour about that, as you have in other instances where you believe the public broadcaster has not acted in a way that has met expectation.

I certainly feel strongly about it. I certainly believe, Minister, if I can say to you: it is wrong for SBS to threaten public figures with legal action because they dare react to the unfair way in which SBS categorised people in our area. I would certainly urge you to consider that in due course. But if SBS wants more advertising to promote this type of rubbish TV that has gone on and demeaned the people of the area that I represent then, quite frankly, from my own perspective, and putting aside all the great points that have been expressed by our side in this chamber, I certainly feel it should not have the opportunity to continue to denigrate people who I feel deserve a better chance than what was expressed or demonstrated by SBS in that terrible program.

7:51 pm

Photo of Michael DanbyMichael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | | Hansard source

These changes that the government has proposed to the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015 are not in the spirit of the original founders of SBS. I knew some of the people who were originally behind the formation of both SBS radio and SBS TV. They very much had an ethos of speaking to multicultural Australia, of ensuring that views that were not represented in the commercial media were spoken for and expressed

These days, SBS does a very good job in some ways in doing that. We all enjoyed their populist venture into Eurovision. I know they had a big audience.

I think there are some aspects of the programming under the current management that have been excellent and, indeed, an improvement on some of the more ideological programs of the past. But turning SBS into another commercial network—as Harold Mitchell, FECCA and other people who are fair-minded thinkers have said—is not in the interests of Australian broadcasting in the long term. It is not in the interests of a pluralist Australia. Notwithstanding the criticisms made of that program Struggle Street, I think the government continuing to support a network that is differentiated from both what one academic friend of mine used to call the 'Anglo zone' on the ABC and the rather banal—and increasingly banal—presentations of the commercial networks is something well worth doing. I believe my colleague has now arrived. I am happy to cede the floor to her.

7:54 pm

Photo of Michelle RowlandMichelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | | Hansard source

I am pleased to have the opportunity to rise and oppose this bill before us, the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015, because this bill goes to the heart of the deceit of this government. The genesis of this bill is a broken promise. This bill has been made possible because of this Prime Minister's broken promise. In fact, it is the embodiment of this government's dishonesty.

What is this bill about? It is about more advertising on prime time SBS viewing as a direct consequence of this Prime Minister's broken promise. That is all it is. This bill seeks to amend the SBS Act to increase the amount of advertising that can be shown in SBS prime time—6pm to midnight—from five to 10 minutes per hour. So it is a doubling of the amount of advertising.

On the night before the election, the now Prime Minister stared down the barrel of an SBS camera and said there would be no cuts to the SBS. Despite this, the 2014-15 budget included a funding cut of $53.7 million over five years for the SBS; $25.2 million of this was in direct cuts. The SBS argues that the amount was found through back-office efficiencies. A further $28.5 million was cut on the basis of allowing SBS to alternatively raise the revenue through legislative amendment and its advertising restrictions, which is the subject matter of this bill. In summary, this bill has been introduced to cover the cuts made by this government to the SBS despite explicitly promising the night before the election not to do so.

As I am sure my colleagues have mentioned, and as my colleague the member for Melbourne Ports so eloquently put it, the SBS has, and continues to play, a vitally important role in the Australian media landscape, and has done since its inception. When new citizens who spoke little English wanted to find out about a historic Labor initiative called Medicare, they turned to SBS. Indeed, SBS earned the respect of the Australia people. It deserves this parliament's respect and the support of government to continue its path of innovation and comprehensive broadcasting, and the fulfilment of its roles in Australian society. I believe any attempt to water down this remit must be rejected.

As I would also point out, we have seen leaders in this sector really come out against this bill. I quote an article by Matthew Knott from The Sydney Morning Heraldin October last year:

The move has infuriated the commercial TV sector, which says more prime-time advertising will drive SBS towards more populist, advertiser-friendly programming.

In the words of Harold Mitchell of Free TV Australia:

This would create by stealth a fourth commercial network. If this happens, the free-to-air television networks will be up in arms.

He also said:

I don't believe the minister will allow this to happen.

This is the bill we have before us. It is opposed by Free TV Australia, the commercial networks and Foxtel. As has been pointed out—even though reputable organisations like FECCA note in their submission that it is something that is going to happen—they are doing this very clearly through gritted teeth. You only have to look at the transcript from the Senate Environment and Communications Legislation Committee, which, in fact, is not due to report until 29 May. So tonight we are debating and will divide on this bill for which a parliamentary inquiry in the other place is still occurring and for which an extension of time has been granted until 29 May to report.

When you look at this transcript, you can see from Ms Grammatikakis of FECCA:

We have found ourselves in a conflicting position. We have found ourselves between a rock and a hard place given the current situation. On principle FECCA would not wish to see increased advertising on SBS; however, we are concerned that if this bill does pass or does not pass it could mean cuts to programs, to services and to opportunities to invest in additional initiatives that we believe could benefit our multicultural and multilingual Australian community.

So here we have it. I will just continue the quote:

FECCA—and this has been our position all along—has repeatedly called on the government to reinstate the funding …

That has been their first call.

You can see quite clearly that this is a government which is seeking to blackmail—just as it has in other pieces of legislation and other policy areas that it is trying to pursue. We see this in child care funding—a choice between increased childcare funding or adequate childcare funding—and cuts to family assistance and family tax benefits. It is just like how this government has tried to tie research funding to its higher education cuts. This is typical policy blackmail of this government writ large in this bill.

I have a suggestion for them: stop breaking your promises. There was the explicit promise before the election not to cut funding. I just to go to the point made earlier this year in an article by Matthew Knott from the Herald:

SBS will have to immediately axe local programs and lay off staff unless Parliament passes legislation allowing it to double the amount of advertising it can air in prime time, the multicultural broadcaster has warned.

The article goes on to quote the broadcaster:

Without the flexibility to generate further revenue, SBS will be forced to implement immediate cuts to its programs and services …

Apparently an online survey of over 1,000 people conducted by SBS found that 73 per cent of respondents would prefer increased advertising on SBS rather than cuts to local content. What sort of question is that? Would you like to choose between having less content or having more advertising—doubling the amount of advertising in prime time? Again, I would say to this government: stop breaking your promises. There is the solution for that one.

I also point out that this government has a zero mandate to undertake the measure that is before us right now. I quote from the Free TV submission on the regulation impact statement, which quite correctly states:

Commercial broadcasters should not be required to subsidise funding cuts to a government-funded broadcaster.

Such will be the impact on the Free TV sector that it will result in a situation where they are subsidising others. But just do not think it is the view of Free TV. I quote here from the Foxtel submission to the Senate inquiry, which rightly points out:

Foxtel is aware that there has been debate about the potential financial impact of the amendments on the commercial free-to-air television sector. While Foxtel does not express a view on these calculations, we note that it is evident that no consideration has been given to the impact of the amendments on the subscription TV sector.

The explanatory memorandum states:

… it is not certain that any increase in SBS advertising spend will draw away revenue that would have otherwise gone to other commercial free-to-air broadcasters.

That is proved wrong by Free TV in its submission, but as Foxtel points out there is no reference to the subscription TV sector at all. The main tenet of this argument is that further commercialisation of SBS—and here I am referring to representative groups such as Save Our SBS—is that further commercialisation of SBS would undermine the ability of SBS to adhere to its charter responsibility to educate and entertain all Australians. That effectively creates a fourth commercial network by stealth, as Harold Mitchell comments, given the advertising restrictions that would essentially mirror those placed on commercial networks. I agree.

The President of Save Our SBS, Steve Aujard, has stated that, if passed, the proposed changes will make SBS look 'no different from commercial TV'. It is a great concern to me what the impact of doubling advertising in prime time will have on SBS and its charter requirements and it should also be a concern of every member of this House. Even the government's Lewis review made this point:

... there will be a greater pressure on SBS management to consider the trade-off of delivering on commercial expectations, against delivering those functions described in the SBS Charter.

Beyond the flawed rationale for this bill and the industry opposition, which is substantial, it is also worth looking at the minister's positions and statements on public broadcasting. I note that the Save Our SBS website reports:

In 2011, Malcolm Turnbull told Save Our SBS that if he had been in the Parliament in 1991–the year that SBS was granted permission to broadcast advertisements–he would have crossed the floor and voted against that.

So, according to Save Our SBS, the minister told them that he would have crossed the floor to vote against advertising on SBS—and he feels so strongly about it that he now seeks to increase prime time ads on the multicultural broadcaster. That is according to the Save Our SBS website.

Mr Turnbull interjecting

If that is incorrect, I am sure the minister will correct the record. Since we are talking about public broadcasters, I would also like to take issue with our minister's recent directive, if I could call it that, to journalists on our public broadcasters. Recently on The Bolt Report the minister urged senior SBS journalists to adopt a less aggressive style of interviewing. Quite frankly, I would suggest, and I know that many people on this side would also suggest, that the minister would be well advised to stay away from offering advice on the interviewing styles of journalists on our public broadcasters. If he thinks that that is appropriate and he likes to stay close to directing editorial content then sobeit, but it is not something that is looked upon kindly by the public.

This bill is an attempt to blackmail the parliament into supporting this government's explicit broken promise. If the bill is passed, it will tip the scales too far in favour of profit over public benefit—and all for the sake of a broken promise. I urge this parliament not to be coerced into supporting this government's broken promises. I will not be part of a vote which goes towards assisting this government to break it promises.

Lastly, whilst we are talking about SBS, it would be remiss of me not to mention an issue that is very close to the member for Chifley's heart and is also one that is very close to mine, and that is the recent broadcast of the series Struggle Street. I am all in favour of a creativity. I am all in favour of telling Australian stories. I am disappointed that I missed the member for Chifley's contribution, but I will look it up later. Whilst we have this opportunity for people to create and tell stories that we find difficult to hear, I would have preferred—and I would think there is plenty of material to demonstrate it—stories about the success of individuals of Mount Druitt. I refer to this in particular because, obviously, it is something close to my heart, and it is not the first time I have mentioned it in this place. I think my husband is one of the best examples of someone who has been a leader in the Mount Druitt community, someone who grew up in a public housing estate in Shalvey. He could not speak English when he started school but through the care of his local Shalvey public school and then Shalvey high school and the teachers there, through his parents and through the initiative that he took himself, he is now a senior partner with Corrs Chambers Westgarth. How does that happen for someone from a Lebanese background who could not speak English when he started school, who grew up in a public housing estate? That is not in the script. That is not the script that is supposed to happen, but it should be the script—it should be a success story that is told.

I can think of any number of success stories out of Mount Druitt, where young people in particular need to see role models. We have been talking a lot today about social cohesion. One of the key drivers of social cohesion is having role models to show you that 'I can achieve my dreams if I persist, if I work hard, if I have patience, if I apply myself, if I ensure that I do whatever I do with enthusiasm and attention to detail.' I would have thought that that would have been either a good ending to Struggle Street or certainly a part 2 of Struggle Street. A lot of people in our community are doing it hard—and often doing it hard, may I say, because of the decisions of this government, including the abolition of very successful transition to work programs and abolishing very important organisations like Blacktown Community Aid, which has had to close its doors after 41 years. It stayed around for four decades—it survived the GFC, it survived everything else, but this government is so mean that it cannot enable such an important grassroots community organisation to continue doing its work.

As I said, the genesis of this bill is a broken promise. We on this side will not be party to assisting this government to break their promises. If they feel the need to do that, if they feel like doing this even without having the report of the Senate inquiry, then they can be my guest. But we will not be part of it.

8:09 pm

Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Minister for Communications) Share this | | Hansard source

I thank all honourable members for their contribution to this debate on the Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015, and I will now seek to sum up the debate to date. I must refer to the contribution of the member for Greenway. Her rebuke of me for expressing a view about the interviewing style of journalists on television and the inappropriateness of my daring to comment on anything that occurred on public television was still hanging in the air when she proceeded to give a fairly forthright critique of the Struggle Street program on SBS. The reality is that we are all—ministers, parliamentarians, citizens, adults, children, anybody—entitled in a democracy to express our views about what happens on television, just as we are entitled to express our views about what happens here, and may it long be so.

This bill, I stress to honourable members, does not change the current restrictions on the overall amount of advertising per 24 hours that the SBS has, and it does not represent any further commercialisation of the SBS. The SBS is a hybrid model already—most of its revenue comes from the government, and I will come to that in a moment, but it has an advertising component. What we are seeking to do, while retaining the absolute number of minutes—120 minutes a day—is to give the SBS the flexibility to have not more than 10 in any given hour which, as honourable members obviously apprehend, will mean that they will run more than five minutes, which is their current hourly limit during the more popular and prime time programs.

It is very clear how we got here. During the six years of Labor government, as I was saying to the House earlier today, for every $1 of additional revenue the government received they spent $2. When we came into government we inherited a growing mountain of debt and a budget that was deeply in deficit. We have had to make savings, and in my own portfolio that includes savings at the national broadcasters, the ABC and the SBS, which receive $1.4 billion every year from the government. I asked the Department of Communications, my department, to undertake an efficiency study to identify savings that could be made by improving efficiencies in the back-of-house departments of the ABC and the SBS; in other words, savings that could be made without reducing the resources available for programming. It was very important from my point of view to ensure that the public broadcasters were able to continue to deliver the same quality content to the public but in a more efficient way. Savings have been achieved, inspired by—if not entirely in accordance with—the study.

One of the recommendations from the efficiency study was that advertising flexibility be given to the SBS. In November last year I announced that the national broadcasters will return $308 million in savings to the budget over five years. This means the SBS's operating budget will be reduced by $25.2 million and, along with the revenue of $28.5 million generated as a result of this bill, the SBS's total savings returned to the budget over the five-year period amount to $53.7 million. In the short term this bill allows additional advertising revenue to be directed towards meeting the government's efficiency savings applied to the SBS from 1 July 2015, without affecting its programming. If these advertising measures are not passed before the end of this financial year the SBS will need to find other ways to achieve the necessary savings, which it has indicated may involve reductions in programming and services.

In the longer term the government's intention from these changes is for the SBS to become a stronger and more sustainable broadcaster. Advertising flexibility strengthens the SBS by making it less dependent on government and helps to secure its future and independence. It is not part of this government's policy, but honourable members should be very well aware that for many years there have been advocates on both sides of the House and right through the television industry, and certainly at the ABC, that the SBS should be folded into the ABC. That, of course, is something that the SBS is not very keen on. Giving the SBS greater advertising flexibility, greater financial independence, will help to secure its independence in the years ahead.

It is anticipated that the SBS advertising measures will result in a total increase in the SBS's advertising revenue of $28½ million over four years. In later years, if SBS exceeds that run rate the additional revenue can be directed towards delivering more distinctive and innovative content and services in line with its charter responsibilities. I should note—because this is important, given that the free-to-air commercial television broadcasters have argued that this is a very bad development, a very bad proposal, because it will result in some advertising dollars being taken from them—that the two highest television results for SBS since it started to carry advertising in 2003 were $72.3 million in 2009-10 and $73.4 million in 2013-14, and these were in large part due to the FIFA World Cup being broadcast. I contrast this to the advertising revenue earned by commercial broadcasters, of $3.9 billion in 2013-14.

The reality is that the SBS's revenues are a very, very tiny part of the total advertising revenues of the television industry. The additional advertising revenue received by SBS is highly unlikely to have any material impact on the advertising revenue of the commercial broadcasters. As I noted earlier, the 2013-14 figure of $73.4 million was a high point due to the FIFA World Cup. In the previous year, without the FIFA World Cup, it was only $58 million. Free TV, the commercial television stations' lobby group, claims that this proposal will result in SBS earning $148 million over four years from 2015-16, or $37 million per annum. These are so optimistic that I would say that they border on the fanciful. But even if one were to accept them, $37 million per annum represents less than one per cent of the $3.9 billion total commercial television advertising pool in 2013-14.

SBS already competes for advertising with the commercial free-to-air broadcasters, and the proposed bill simply does not change this. Audience size is fundamentally what attracts most advertisers, and SBS has a niche audience that simply does not compete with the commercial free-to-air sector in this respect. I have noted honourable members from the opposition saying that it would be terrible if the SBS were to carry more advertising in prime time, because it would encourage them to produce programs that were popular. This of course shows the impossible task that public broadcasters are set. On one hand, if they produce program after program of remote interest to the public—say, Sophocles in the original Greek—they will be accused of being elitist and a waste of taxpayers' money. On the other hand, if they produce programs that people actually want to watch, the commercial broadcasters will say, 'Stop, stop; you're taking our audience.' The reality is that both SBS and ABC have to tread a line down the middle. It is a question of judgement. But, on any view, the SBS is an absolute niche broadcaster. For example, over the past five years the SBS has had no more than four of the top 500 top-rating free-to-air television programs in the mainland state capital cities for any given year on either main channels or multichannels. Excluding football and cycling, this figure drops to between nil and one program.

So, the reality is that this is a sensible, commercial, responsible change to SBS. It will make it more independent financially. It will give it more flexibility in terms of advertising. It is simply changing the way in which it can schedule its advertisements; it is not increasing the number of advertisements that are broadcast on any day. It will increase SBS's revenues. At one level I would love to think that the free-to-air television stations are right in their forecast, but they simply are not. The SBS and the Department of Communications have gone over these figures very carefully, and the figure that we are assuming—$28½ million—is a prudent and conservative one and we think achievable. The figures of $37 million a year that the commercial television stations have proposed is, as I said, so extreme as to be fanciful.

In its submission to the Senate inquiry on this bill, the SBS itself said:

SBS’s ability to earn commercial revenue is critical to its operating model and sustainability. As a hybrid funded organisation since 1991, SBS has a highly evolved workplace culture, operating systems and codes and guidelines in place to manage the complexities of being a public broadcaster with commercial activities. The organisation is well-positioned to responsibly and sensitively manage increased flexibility in advertising and sponsorship in line with audience and stakeholder expectations, whilst maintaining the integrity of the SBS Charter.

To summarise for honourable members, to put this all in context: SBS has traditionally received around 75 per cent of its funding from government, including its base funding, tied funding for the production broadcast of NITV, and funding for transmission itself. This financial year, 2014-15, government revenue to SBS was $286 million. In the same year, SBS's total revenue from all commercial sources is predicted to be $96 million. Advertising and sponsorship spikes every four years during the FIFA World Cup, and in 2014-15, a World Cup year, SBS's revenue, advertising, sponsorship and subscription channels will be $85.2 million, and that includes additional commercial revenue from sources such as television royalties, merchandising, rental income and interest.

So, the changes proposed in this bill have only a minor impact on SBS's overall revenue make-up, with its commercial revenue share projected to increase from 25 to 29 per cent of its total revenue over the forward estimates, and its impact on the rest of the commercial television industry is somewhere between nil and negligible in real terms.

If this bill is not passed, given the reality that budget efficiencies have already been signed off on and will be implemented from 1 July, there will be an immediate, significant and negative impact on SBS. That is the reality. We were left a growing mountain of debt and an enormous deficit because of Labor's profligacy. We have had to make savings. SBS is making its contribution. It surely is outrageous for the Labor Party, having created the debt problem because of their reckless spending, to then stand in the way of the government responsibly addressing it. On that note, I commend the bill to the House.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

I thank the minister for his summing up. The question is that the bill be now read a second time.

Bill read a second time.