House debates

Wednesday, 21 June 2017


Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017, Commercial Broadcasting (Tax) Bill 2017; Second Reading

9:56 am

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

Earlier, I was talking about the additional gambling advertising restrictions that the Minister for Communications announced on 6 May and how it is notable that the minister was unable to explain at the Senate estimates process that was conducted recently exactly how they would be implemented by legislation when it comes to online platforms. The restrictions on broadcast platforms are expected to be implemented through codes of practice that will commence in 2018. Labor led the way in addressing community concerns around gambling advertising in 2013 by demanding that Australia's broadcasters amend their codes to ensure a reduction in the promotion and advertising of gambling during live sport.

Concerned that the rules were not working optimally, in March this year Labor moved a motion in this place calling on the government to work with the broadcasting industry and national sporting organisations on a transition plan to address the issue of gambling ads before and during live sports broadcasts. It is notable that government MPs voted against this motion, only to announce gambling advertising restrictions in live sporting events a few weeks later. Ultimately, Labor's leadership on this issue has compelled the government to act and we welcome the measures as a step in the right direction. That says that Labor does not consider that they go far enough to address community concerns.

We anticipate that our communities will continue to complain about the intrusion of gambling advertising in live sports, given the amount of gambling advertising this government's flawed proposal continues to allow and given the fact that gambling advertisers may simply shift their advertising to avoid the five-minute shoulder. It remains to be seen whether viewers will be bombarded with gambling advertisements at the 8.30 pm mark or whether the timing of live sports fixtures will be altered to minimise the impact of the new restrictions. Labor shares the concerns of people right across Australia who are worried about the impact of gambling advertising on our community. Adults and children should be able to enjoy watching live sport without the intrusion of betting odds and gambling ads, and it is in everyone's interest to ensure that children do not associate betting and gambling as a normal part of enjoying sport.

On the matter of sport, the government's announcement of $30 million in funding to support the broadcasting of women's and niche sports is yet another area where this government is picking up on Labor proposals. Labor announced funding to support broadcasting of women's sport on the ABC, a national free-to-air service, as part of its 2016 election platform. This government's main point of difference is that it will provide the funding to subscription TV rather than the ABC and it remains to be seen what the legacy of the government's approach will be, given subscription TV's current penetration is only around 30 per cent of Australian households.

On the issue of antisiphoning, Labor is committed to ensuring Australians enjoy coverage of premium sporting events on free-to-air TV. We regard the proposed changes to the antisiphoning scheme itself to be in the nature of regulatory housekeeping. On the changes to the list of events in the antisiphoning notice proposed in this bill, changes that are permitted under the current scheme, I note these are justified on practical reasons, where the history of rights' acquisition by broadcasters and audience viewing patterns no longer warrant their inclusion, for example.

As with so many issues in this portfolio, Labor is disappointed that the government has not conducted a holistic evidence based and public consultation process on the scheme and the impact of over-the-top providers in the lead-up to proposing this bill. While change may be effected in incremental steps, it would be useful to have a roadmap of where we are headed as those steps are taken. While government acknowledges that the Australian media market has changed significantly and is willing to abolish licence fees as a consequence, as I said previously, there is an utter failure to articulate a vision for the future or a roadmap for getting there.

That brings me to content reform. It is disappointing that the government has moved to ease pressure at one end of the value chain—being commercial broadcasters—but neglected other links. This government's ad hoc approach to reform sees it granting licence fee relief for broadcasters but no relief for the production sector, which is also feeling increased competitive pressures in the contemporary media landscape. The broadcasting sector is not the only industry that has been disrupted by digitisation; yet the government, which is coming to almost four years in office now, only recently announced a content review to assess issues in the Australian production sector.

Despite the fact that the Department of Communications has identified content issues as in need of reform since 2014, as part of its dereg roadmap, this government has only recently just announced a content review. Meanwhile, recent ABS data shows the government's commitment to Australian content in the context of media reform or broadcasting reform is all talk and no action. Since 2011-12, commercial TV broadcasters appear to have cut their commitment to Australian drama and documentaries by 20 per cent. They have moved more production in-house—from 44 per cent of production in 2011-12 to 55 per cent in 2015-16. In this time, they have had a series of broadcast licence fee cuts. The production sector is suffering as a consequence of this government's inaction when it comes to joined-up reform. Ad hoc regulatory tinkering is not addressing the structural issues being faced by the industry.

The communications minister has proven to be incapable of getting his ducks in a row to usher in abolition of broadcast licence fees and the introduction of a spectrum tax at the time, as identifying its content policy. Perhaps the nexus between the two is overlooked. As the Productivity Commission stated in its inquiry into broadcasting in 2000, licence fees 'seek to recover some of the value inherent in commercial broadcasting licences from commercial broadcasters and provide a return to the public for their use of scarce radiofrequency spectrum'. The sector-specific licence fees levied on commercial broadcasters formed part of the social compact that has been a central theme in how broadcasting policy and legislation has been approached in Australia until now. The compact provided broadcasters with privileged access to use the airwaves—the highly valuable, finite and public asset that is used to transmit programming. In exchange, broadcasters were required to pay licence fees and comply with regulation that aimed to promote a range of public interest objectives, including diversity.

I want to end by saying how important Labor believes it is that Australians reap a return on that use of such a valuable public asset, and that includes blind and low-vision Australians who need audio description. These reforms do nothing to support the introduction of audio description for the blind and vision impaired community in Australia. This government is dragging its feet, setting up a working group earlier this year which is not due to report until the last day of 2017. Blind and low-vision Australians deserve better.

10:03 am

Photo of Keith PittKeith Pitt (Hinkler, National Party, Assistant Minister for Trade, Tourism and Investment) Share this | | Hansard source

Firstly, I would like to acknowledge the work of the shadow minister, who I have served on committees with previously and who certainly has a very keen interest and a lot of knowledge around the subject matter. I rise to speak on the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017. There is no doubt that the current media rules are outdated. Much of the legislative framework was developed in an analog era when the industry had only three main media platforms—newspapers, TV and radio. This was well before smartphones, social media, streaming services et cetera—it just goes on and on and on.

Australians can now access media content from a wide variety of sources: streaming on-demand services like Netflix and music services like Spotify and Pandora and, for news, the choice of online sources is almost endless—and, can I say, not always accurate. As well as the traditional metropolitan and regional newspapers, there are the likes of The Guardian, The Daily Mail and The Huffington Post all vying for your clicks. This is not surprising considering the Reuters Institute claims that close to half of all Australians identify online news and social media as their main source of news. The internet has provided opportunities for new platforms and business models and the pressure on established operators has increased significantly. Newspaper circulations have shrunk significantly in recent years, and many have introduced online digital subscriptions in an attempt to retain the readership base.

Although the majority of viewing time remains devoted to broadcast television on in-home TVs, in 2015 free-to-air audiences for metropolitan broadcasters fell by five per cent. The average number of hours people were watching broadcast TV fell below 90 hours per month, or three hours per day, in the first quarter of 2015. This is the first time that it has dropped below 90 hours since monitoring was introduced in 1991. To put this into perspective, as at November 2016 more than 5.75 million Australians aged over 14 had access to a Netflix subscription.

The legislation before us today will support the viability of our local media organisations as they face increasing global competition in a rapidly changing digital landscape. I do want to talk about what I consider to be some of the key components of this bill. Firstly, it abolishes the 75 per cent reach rule. Secondly, it abolishes the two-out-of-three cross-media rule. Thirdly, it introduces higher local content obligations on regional commercial television licensees who change their control or ownership arrangements.

The 75 per cent reach rule has the practical effect of preventing mergers between any of the predominantly metropolitan commercial TV broadcasting licensees, including Seven, Nine and Ten, and any of the regional commercial TV broadcasting licensees such as Prime, WIN and Southern Cross, because such a transaction would result in a person controlling commercial TV licences whose combined licence area populations would substantially exceed the 75 per cent threshold. This rule does little to support media diversity, as regional viewers essentially receive the same commercial TV programming as metropolitan viewers, due to affiliation of content supply agreements. In addition, two metropolitan licensees now stream versions of their services across Australia, including into regional markets. Removing the 75 per cent reach rule would, subject to competition law and, of course, other relevant law, allow consolidation within the commercial TV sector and greater scale of operations, therefore allowing commercial broadcasters to compete in an environment where audiences can readily access premium content online.

The two-out-of-three cross-media control rule prohibits a person controlling more than two out of three regulated media platforms: a commercial television broadcasting licence, a commercial radio broadcasting licence and an associated newspaper in any one commercial radio licence area. This rule regulates the traditional media platforms of commercial television, commercial radio and associated newspapers, but it does not take into consideration the changing media landscape where consumers access news content from alternative sources such as online, and they are doing that right now.

While these two measures are to be abolished, the coalition government is maintaining other diversity rules, including the five-and-four rule, with at least five independent voices in metro areas and four in the regions; the one-to-a-market rule, where a licensee can control only one TV licence in a market; and the two-to-a-market rule, where a licensee can control no more than two radio licences in a market. The Australian Competition and Consumer Commission will retain its powers to scrutinise mergers and acquisitions, and it will be asked to update its guidelines accordingly. Media transactions are also subject to regulatory assessments in relation to foreign investment under the Foreign Acquisitions and Takeovers Act 1975 and Australia's foreign investment policy.

The third key component of the legislation is increased local programming. This is vitally important to regional communities in Australia, particularly ones like those in my own electorate of Hinkler. My electorate is fortunate to have two commercial TV networks, two daily regional newspapers, a number of community papers and both commercial and community radio stations, as well as our good friends at the ABC. Last year, Southern Cross Austereo and Nine announced that in 2017 they would broadcast 15 dedicated local Nine News bulletins to viewers in their regional markets in Queensland, southern New South Wales and regional Victoria. The bulletins will be rolled out progressively, starting in February, first in Canberra and then in Wollongong, with the other markets to follow. More than 110 staff will be employed by Nine in the regional news division. This will include Wide Bay. I believe that this new bulletin is a matter of weeks away from launching in my local region.

Ensuring local content is maintained and increased after a change of ownership or a merger was a key outcome of the Nationals media reform working party, which I was fortunate enough to chair. Local content is key to ensuring all Australians are informed, educated and entertained. Locally produced regional content ensures people are informed about what is happening in their own communities. As well as contributing to the social and economic fabric of a community, local content is particularly important when emergency services need to communicate public safety messages. Mr Deputy Speaker Mitchell, as you might know, we had very large floods in my region in 2013. During those floods the various local media organisations were an important conduit to ensure that people had up-to-date information, whether it was about road closures, river height monitoring, where to get emergency help or which evacuation centres were open.

We should not forget that some 34 per cent of Australians live outside the greater capital cities, and they deserve to have a voice. Regional Australia is the engine room of the nation's economy, producing 67 per cent of Australia's total export earnings. Around 45 per cent of tourism expenditure occurs in areas outside of Australia's capital cities. Broadcasting regional stories into the capitals also helps build social cohesion and informs people about issues that affect all Australians, such as food security and water supply. Small regional businesses rely on their local broadcasters to advertise their products and services and would struggle to pay the big city advertising rates.

Regional communities must be encouraged to shop local rather than buy online and to support the local economy and local jobs. Every Christmas, I run my own Shop Local campaign to encourage the community to support those local businesses during the festive season.

There are approximately 8,541 small businesses within the Hinkler electorate. Small and medium businesses contribute some $340 billion to the economy and, across Australia, small businesses employ more than four million people.

Regional newsrooms are also an important training ground for young media professionals. Many of Australia's most talented reporters attribute their success to having been thrown in at the deep end, at the start of their career, in a regional newsroom.

The media reform bill will introduce high local-content obligations on regional commercial television licensees who change their control or ownership arrangements. These new obligations would apply to the majority of regional free-to-air commercial TV broadcasters who, as a result of a change in control known as a 'trigger event', become part of a group of commercial broadcasting licensees whose combined licence area populations collectively exceed 75 per cent of the Australian population. This ensures that there are minimum local content requirements in nearly all regional areas following a trigger event, including those where there are none currently.

The Broadcasting Services Act currently requires regional commercial television broadcasting licensees in aggregated markets and Tasmania to provide approximately 120 points of material of local significance per week to local areas within the licence area. Material of local significance is material that is broadcast to a local area and relates directly to either the local area or the licence area. The aggregated markets include the following licence areas: northern New South Wales, southern New South Wales, regional Victoria, eastern Victoria, western Victoria and regional Queensland. Under the current system, one minute of material of local significance is worth one point and one minute of news that relates directly to the local area is worth two points.

In the absence of a trigger event, the practical effect of these provisions—including the existing 720 point requirement over a six week timing period—will be maintained under the amended local programming obligations contained in the bill. Six months after the occurrence of a trigger event, the bill will increase local programming requirements for affected regional commercial television broadcasting licensees in aggregated markets and Tasmania by 30 points per week and introduce local programming requirements for affected regional commercial television broadcasting licensees in non-aggregated markets. These include the following licence areas: Broken Hill, Darwin, Geraldton, Griffith and the Murrumbidgee Irrigation Area, Kalgoorlie, Mildura, Sunraysia, Mount Gambier south-east, Mount Isa, remote and regional Western Australia, the Riverland, South-West and Great Southern, and the Spencer Gulf.

The new section will require licensees to provide approximately 60 points of material of local significance per week to each local area, with a minimum of 45 points per week. Information supplied to the Australian Communications and Media Authority by relevant licensees up until 2014 indicates that many licensees significantly exceed their programming requirements and some broadcasters operating in the non-aggregated regional markets provide local programming despite no regulatory obligation to do so.

This bill will also introduce a new local programming points system for licensees affected by a trigger event, and each minute of a legislated amount of local programming that relates to the licence area would accumulate one point. Each minute of local programming that comprises news specific to the local area would accumulate two points, and each minute of local programming that comprises news specific to the local area and is filmed within the local area would accumulate three points. This proposed point system is the most straightforward method of incorporating an incentive for filming in local areas into the local programming obligations. It is based on a similar points system that commercial broadcasters in aggregated markets are already familiar with. The proposed arrangements will also militate against overly centralised approaches to local news—for example, news broadcasts being filmed out of central locations without significant engagement with the local area in which it is broadcast.

The bill will require licensees to provide the Australian Communications and Media Authority, ACMA, with an initial report on their compliance with the obligations 18 months after a trigger event and a second report one year later. In order to evaluate the extent to which the bill achieves its objectives, the ACMA will review the operation of the new local program provisions within two years following the commencement of those additional obligations. Changes to the antisiphoning scheme will ensure that iconic events, such as the Olympics, the Commonwealth Games, NRL and AFL premiership matches and the Ashes, remain on the list. The number of events on the current antisiphoning list is between 1,200 and 1,300 per year. Many of these events are no longer broadcast on free to air and only attract a small audience, so no longer warrant being on the list.

The bill will abolish licence fees, recognising that the Australian media market has changed significantly since broadcasting licence fees were introduced. Fees and charges placed on commercial broadcasters are no longer warranted or sustainable, particularly as their competitors do not face the same fees. The introduction of a transmitter licence tax and the abolition of broadcasting licence fees and datacasting charges will result in the vast majority of broadcasters paying considerably less in terms of their overall fee and tax burden. A small number of broadcasters in regional areas are projected to experience an increase in their tax liability. To provide these broadcasters with time to adjust to the new tax arrangements, the government will provide transitional support payments over five years. The proposed payments are based on the difference between broadcasting licence fees paid through the 2015-16 financial year and the amount of tax projected to be paid under the proposed new interim tax.

In closing, under the current rules, established media operators do not have the flexibility to respond to increasing financial pressures by adapting to the changing media landscape, including through mergers with other TV broadcasters or other associated newspaper or radio broadcasters. This legislation will allow media businesses to gain the scale necessary to compete in an increasingly fragmented and global media environment while ensuring that Australians continue to have access to a diversity of sources of news and information. Most importantly, it retains, and in some cases increases, local program content for regional communities. In the final seconds, can I acknowledge the former member for Hinkler, Paul Neville, who was extensively involved in the original legislation during the nineties. I would say to Paul, as he is well aware, that the world has moved on and we do need to make changes in the best interests of the people. We want to be broadcasting things that are important to our community. I commend the bill to the House.

10:17 am

Photo of Brian MitchellBrian Mitchell (Lyons, Australian Labor Party) Share this | | Hansard source

The two-out-of-three rule is what I will be talking mostly about in regard to this bill. That is the only element of this bill that Labor has a real problem with. The two-out-of-three rule is not perfect and it is not elegant, but it is better than nothing.

The two-out-of-three rule exists to protect Australians from a media landscape that is totally dominated by a tiny handful of very wealthy and very powerful corporate owners. Australia already has a media market that is the fourth most concentrated in the world—a list that has China at the top because of complete state ownership. Maybe I am a bit radical, but I do not see much difference in a media market totally dominated by a state owner as opposed to a media market totally dominated by a private owner. I think they both have the same sorts of problems.

Removing the two-out-of-three rule will concentrate Australia's media assets in even fewer hands. We have existing owners demanding that they be allowed to buy each other out so that they can get bigger, which they say is necessary to better compete on the world stage. We have a scenario where already-massive media companies want to get even bigger so that they can face-off against similarly giant companies overseas. Such a scenario only has one outcome: the swallowing up, buying out and merging of competitors until, ultimately, only two global entities are left facing off against each other—and, one day, they themselves will ultimately want to merge. That is not a future that we should look forward to.

For our democracy to function properly, we need robust, independent and diverse voices that speak truth to power. In recent decades, we have seen a convergence of media that results not in speaking truth to power but in truth being manufactured by power. In Australia, Murdoch-owned titles account for nearly two-thirds, or 64.2 per cent, of metropolitan circulation newspapers; Fairfax-owned papers account for a further quarter, or 26.4 per cent. Some of these figures may be a little out of date. News Corporation and Fairfax, along with West Australian Newspapers, work together to create Australian Associated Press. Now, Australian Associated Press—the little AAP that you often see at the end of articles—distributes the news and then sells it onto other outlets, such as the Australian Broadcasting Corporation. So although much of the everyday mainstream news is drawn from AAP, all the privately-owned media outlets still compete with each other for that news The same players are creating the same news.

Rural and regional media, which is where my electorate is interested, is dominated by Rural Press Ltd, with significant holdings in all states and territories. Rural Press received a takeover offer from Fairfax in late 2006, and their merger was in 2007. The same arguments were being used back then: we need to get bigger and bigger and bigger to be able to compete. And we are still having those same arguments now.

In Australia, News Corporation, which is a United States company—it is a foreign-owned company—owns approximately 142 daily, Sunday, weekly, biweekly, triweekly newspapers. Some of them are free commuter papers. There are 102 suburban publications, which is my background. My background is as a newspaper editor for an independent title back in Western Australia, and our main competitor was News Corporation. And it is no fun, let me tell you, being an editor of an independent newspaper competing against a newspaper owned by a multinational. News Corp Australia publishes a nationally distributed newspaper in Australia, which is The Australian, and has a metro paper in each of the Australian cities of Sydney, Melbourne, Brisbane, Adelaide, Hobart and Darwin. It used to have a Sunday title in Western Australia but, of course, that has been bought out and merged with The West Australian, and it has a group of suburban newspapers across most of the capital cities.

News Corporation is not just a newspaper company; it publishes a further 30 magazine titles across Australia. It also has interests in digital media,, one of the biggest news sites in the country; Business Spectator and Eureka Report,, and It has 50 per cent stakes in and CarsGuide. It has a share in the real estate website, So not only is it a media company; it also has commercial interests outside media.

One of the issues with that is that when you are a media company and you own assets that are not media related, inherent conflicts of interest arise. Suddenly, the journalists are expected to report fairly and objectively on issues of commercial interest to their corporate owner. I think it is fair to say, when we have seen on the TV news, the cross-publication, the cross-promotion of commercial interests—we will see on a commercial broadcaster's news a story about something that relates to the commercial interests of the same company—that is not news; that is advertising. How can a journalist for a media company be expected to report fairly and accurately and objectively on an issue of commercial interest to their owner if it is of adverse interest to their owner?

Until the formation of News Corporation in 1979, News Limited, as it was known then, was the principal holding company for the business interests of Rupert Murdoch, who is now an American citizen. So what we are seeing is News Corporation, Fairfax and other media entities keen to merge. These corporations have already merged over the years; they are keen to merge further. Despite their previous mergers, they want to get bigger.

While I doubt that any owner these days, as they used to be, is on the phone to personally direct a certain editorial line—I know that is the sort of romantic notion that Rupert Murdoch is on the end of the phone down to the editors telling them what to write; I know that does not happen—but woe betide the editor or news director who runs an editorial agenda that is in conflict with the owner corporation's commercial objectives.

Is it any wonder as media platforms are being swallowed up by conglomerates that the editorial voice from those platforms increasingly reflect, not the values of the middle class from whence owners once came from, because when media companies and newspapers and radio stations were locally owned by local owners, those local owners were just normal people living amongst the community?

Instead, as media companies are owned by billionaires and multimillionaire CEOs, the views expressed in those conglomerates now mirror the interests of the one per cent—that is, the multimillionaires, the property speculators, the mining magnates, the industrialists—who the owners of these platforms consider their peers. In fact, in some cases, the billionaires and mining magnates sit on the boards of these companies and take ownership stakes in them. You have to wonder why a mining magnate would be so desperate to take an ownership stake in a television company.

Labor wants media assets in more hands not fewer. We want more voice not less. We want a diversity of opinion that reflects the plurality of our country not what reflects the view of a tiny but very wealthy—and elite and powerful—handful of owners. Labor does accept that the media landscape is rapidly changing. We do not have our heads stuck in the sand. Legislation does need to keep up with technology and new entrants, such as global digital competition and social media. Labor is supporting all but one of the measures in this bill, and we do not support the repeal of the two-out-of-three rule.

The two-out-of-three rule simply means that an owner cannot own any more than two media assets in a marketplace. It is designed to ensure that any one owner cannot completely dominate a particular market's media environment. Complete domination of the media environment is in no-one's interest except the owner of the media asset. The two-out-of-three rule is not a perfect rule but it is better than nothing—which is what the government would have us vote for. We do not need nothing there, we need something to protect the community interest.

Labor supports most of the measures in this bill, other than the two-out-of-three rule, because they are Labor's measures. For four years this government has done nothing on media reform and now it seeks to shamelessly plagiarise Labor's work and pass it off as its own. It was Labor that led the way on reforming broadcast licence fee relief, gambling advertising restrictions and funding to support the broadcasting of women's sport.

This bill is before the parliament today only because the minister, cynically, spied an opportunity with the Ten Network going into voluntary administration last week. He thought that he could box Labor in, that he could somehow use Ten's predicament to weave together an argument about the urgency of removing the two-out-of-three rule. Of all the reasons Ten gave for going into administration, ownership rules was not one of them—but licence with fee relief was. It was a Labor initiative, that this bill takes up and which Labor is supporting. In a statement to the market, Ten said:

TEN anticipates that after the changes to regulations anticipated to be tabled in Parliament tomorrow pass through the Parliamentary process, the reduction in licence costs for TEN in FY17 will be in the order of $22 million and, in FY18, $12 million.

Ten itself has stated that licence fee relief is important, but nowhere in its statements to the market has it said it needs a change in the ownership rules. Everyone knows that Ten has struggled for years against the Nine Network and the Ten Network. Their commercial situation has been compounded by the entry of digital channels, which have stuck their tongues into a finite pool of advertising dollars.

If the new digital players in Australia were offering robust and well-resourced journalism, we possibly would not be so steadfast about the two-out-of-three rule. The fact is, the new digital entrants, including the second and third free-to-air channels by the existing players, offer lots of content, but little if any of it is journalism—with the exception, of course, of ABC News 24.

Journalism is why Labor is so strong on the two-out-of-three rule. We all talk about the media industry but it is the journalism that we care deeply about. Journalism is a bedrock of our democracy and we need robust and independent journalism. When we have less of it and fewer voices, our democracy is worse off—

Mr Josh Wilson interjecting

And running down by public broadcasters, my colleague the member for Fremantle mentions. Labor has long supported licence fee relief. In government Labor provided licence fee relief on local content production in recognition of the impact of the global financial crisis, known as the global recession overseas. Those on the other side still manage to suffer from a collective amnesia on just how brutal the global recession was on the world economy, and they refuse to acknowledge that Labor's superior economic management, under my colleague the member for Lilley, during that time helped save this country from the brutal effects of that world recession. The relief that Labor offered at that time was also an acknowledgement of the increasing role of digital.

Labor supported licence fee reduction in last year's budget. The abolition of commercial broadcast licence fees recognises that the Australian media market has changed significantly since broadcasting licence fees were first introduced, with online and on-demand content fragmenting the market for media services and increasing competition for advertising. The government states this financial relief will enable broadcasters to better compete with online competitors, invest in their businesses and produce Australian content. This proposal has merit, and Labor proffered these arguments in favour of relief in 2016.

Labor notes that these changes are occurring in the context of the broader spectrum reform process, where the Department of Communications and the Arts and ACMA are working to implement the recommendations of the spectrum review over coming years, including the wholesale rewrite of the Radiocommunications Act. Further, the related tax bill introduces a new spectrum tax, estimated to raise around $40 million per annum, which ensures the Commonwealth gets a return on the use of radiofrequency spectrum. Given that a minority of broadcast licensees will be worse off under the new spectrum tax, there is also a five-year transitional support package.

We on this side of the House hold strong and consistent views on how this bill can and should move forward, and it is such a shame that the government has taken a ham-fisted approach to reform. Our shadow minister for communications tried time and again to get up-to-date briefings from the minister, but to no avail. We know he is a minister from the other place, but surely that is no excuse in itself for the gross incompetence on display. We tried last year, if the House remembers, to support the repeal of the 75 per cent reach rule. We extended the hand of bipartisanship. But, to the dismay of industry and the dismay of Labor, the minister squibbed it, and the bill was pulled from the parliamentary agenda. It is back with us now only because the minister has spied a cynical opportunity to use Ten's misfortunes as a fig leaf for ramming through the abolition of the two-out-of-three rule. Labor will support this bill, but we will not support the repeal of the two-out-of-three rule.

10:32 am

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

The Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 is a truly historic piece of legislation that deals once and for all with so many of the unresolved issues in the Australian media sector. The reality is that for many years—arguably decades—Australian media law has not reflected their reality of the Australian media industry. There have been a wide range of people calling for reform, and this bill delivers it. A few years ago, back in 2014, I wrote a number of articles in newspapers on this topic, calling for the abolition of the two-out-of-three rule and the 75 per cent rule, and it is very good to see that incorporated in this process.

The problem is that those opposite are applying a 1987 mentality to a 2017 problem, because, by seeking to oppose the abolition of the two-out-of-three rule, they seek to condemn Australian media to irrelevance over time. What is happening in the Australian media industry is not a matter of subjective interpretation; it is something we can see with our own eyes. We see the newspaper industry under extreme pressure. We see the closure of suburban and regional newspapers. We see very large-scale redundancies, particularly in the newspaper industry. We also see extreme pressure in other parts of the media sector, none more so than the regional television market, where you look at companies like Prime, Australia's largest regional media broadcaster, whose value has declined by more than 90 per cent in the last decade. That is a reflection of what is happening in the media sector and why these laws need to change.

What is happening is that digital is increasingly taking over. That is a reality of the market. If consumers want to visit digital platforms and if advertisers want to advertise there, then that is absolutely appropriate and so be it. What we need to do is ensure that Australian media operators are not competing with digital with one hand tied behind their back. But that is what Labor says they should do. Labor says that a newspaper company should not be able to merge so as to own newspaper, radio and television in one market, because they would be far too powerful if they were to do this, in Labor's assertion. But think about this, Deputy Speaker: it is a very unusual situation where an industry can be so weak that it is effectively in the process of going out of business, which is what is happening in the print newspaper sector around the world. It is so weak that it is no longer a viable industry at all in the medium term—but so strong, according to Labor, that they cannot be allowed to merge with other companies so as to have the economies of scale which will enable them to continue to produce the quality and independent journalism that is so important to our nation.

What happens in an environment where those companies cannot merge and cannot get those economies of scale is that the march of Google and Facebook continues on unabated. Every year they grow at double-digit rates, and every year the print media sector, particularly, continues to struggle. SMI, which is a data-gatherer in the media sector, said that newspaper advertising in 2016 was down by 14 per cent; regional newspaper advertising was down by five per cent; and community titles were down by eight per cent. This been going on year after year since about 2007 or 2008. Those opposite say: 'Just ignore all that. Just pretend that everything is fine in the newspaper industry. Pretend that everything is fine in television, particularly in the regional television industry.' They say we should not enable those industries to take sensible measures to create the strength they need so they can actually compete with these massive international platforms. So the only people who are cheering at the outcome that those opposite propose are, in fact, global international digital platforms—because, by constraining the domestic media sector in competing with those digital platforms, those opposite would seek to do the work of those digital platforms, to the detriment of our domestic media sector. That is a massive issue. It is an extraordinarily large issue.

It is very important to remember here that if you abolish the two-out-of-three rule, enabling newspapers, radio and television to merge, should they seek to do so, you still maintain the ACCC's capacity to block mergers. The fact that the two-out-of-three rule does not exist anymore does not mean that every merger is automatically approved. The ACCC looks at mergers in every market in Australia and asks, 'Is this going to have a negative impact on competition and outcomes in this market?' And if the ACCC has concerns about a particular merger, they can stop it. They do that now and they have done that in numerous circumstances over the years, and they could do that, should they have a particular concern about a proposed media merger, in the future. But the two-out-of-three rule acts as an artificial barrier which means that media companies do not even get to the point of putting forward a deal for the ACCC to consider, because it is unlawful. That is a very bad situation, and it is very materially constraining our media sector.

Deputy Speaker, when you think about the Australian media industry, agreement and camaraderie are not the first two things that would come to mind, so it is very notable that support for the government's proposal is quite overwhelming. We have all the regional television broadcasters, the metropolitan broadcasters, the key newspaper companies and the radio companies—basically everyone in the industry—acknowledging that this package needs to happen, if we want to have a modern, competitive media industry that has the economic capacity to grow, to compete, to employ journalists and to employ not just the journalists but all the other people who are involved in our media sector.

It was interesting to hear the comment from Ian Audsley, the CEO of Prime Media Group, when he testified before a Senate committee last year and spoke on this issue of diversity. He said:

There has been a lot of talk about the threat to diversity if the two-out-of-three rule is repealed. We would argue that there is greater threat to media diversity if the media reform bill is not passed because the risk is that more journalists will lose their jobs in regional Australia, more newsrooms will be faced with scaling down and, in the worst case scenario, some businesses may close.

That was from the CEO of the largest regional television company in Australia. But Labor says that the entire industry is wrong, that everyone who follows the industry and who has analysed this issue is wrong, but that the shadow communications minister and her caucus colleagues are right. I guess there is a theoretical chance that those three or four people could be right, and anyone else who has any understanding of this industry is all wrong—it seems unlikely, but that is the position they maintain.

It is very important that people understand that the position those opposite maintain is one that works absolutely in the favour of international digital platforms that do not employ substantial numbers of people in Australia. Those bodies would look at Labor's opposition to this bill and give it a big tick. They would say that that is okay and that is going to make it harder for those domestic media competitors who are already struggling to compete against us. Labor's policy says: let's create a situation that is good for those massive international platforms with limited local employees, but bad for the companies that employ thousands and thousands of Australians and, ultimately, bad for diversity because, by stopping these companies from competing on their own two feet, it is going to stop them from growing into the future. It is a very bad position taken by Labor, and anyone who has looked at this industry seriously understands that its position is completely untenable.

There are a number of other important reforms in this bill, which I want to touch on. The 75 per cent rule is one of the most ridiculous rules, frankly, not just in media regulation but that one could come across pretty much anywhere in government. Basically what this says at the moment is that if you own a television network and you want to broadcast content to Australians, if you do it over the internet, that is fine. You can reach 100 per cent of people and there is no problem—you put it online and 100 per cent of people can be reached, that is fine. You can also do a deal, if you are a metropolitan broadcaster, with a regional broadcaster, and say that the same piece of news content will reach 100 per cent of people via the broadcast spectrum. The only thing you cannot do is reach 100 per cent of people through the broadcast spectrum through the ownership of one company. And that does not make any sense because, presumably, the original intention of the 75 per cent rule was to say that the government of the day did not want any particular piece of content to reach 100 per cent of the community, particularly news, but that has been happening for decades anyway via the broadcast spectrum. That is because the regional broadcaster simply redistributes exactly the same news content as the metros, so they are already reaching 100 per cent. And now, with internet technology, of course, one company can reach 100 per cent of the community, and that is fine too. So what this law simply seeks to do is to say that 100 per cent of people could be reached via the broadcast spectrum. That makes perfect sense, and it is good that those opposite support it.

Broadcast license fees are also a very outmoded part of the Australian media regulation landscape and, effectively, operate as something of a super profits tax. Many decades ago, the government effectively said that a broadcast licence is a very valuable thing so, in addition to paying company tax, they had to pay a very substantial percentage of their gross revenue to the government. That has become more and more anachronistic as time has gone by, and the Australian licence fee provisions are way out of step with the rest of the world. Sensibly, this bill seeks to abolish licence fees. What it does say is that there is a public asset which broadcasters use, and that is spectrum. Spectrum is one of those fancy terms, but all it means is the airwaves. Broadcasters use the airwaves and that is an asset which is, in a sense, regulated by government. What the government says is: 'We will charge a fee for the access of spectrum and that is appropriate. Other people pay fees for access to spectrum, but we will no longer charge this very excessive broadcast licence fee.' That is entirely appropriate.

Another important reform in this bill concerns the broadcast of advertising related to gambling during children's viewing hours in sports broadcast. I think most of us, as members of parliament, would have had concerns expressed by members of the community about advertising for gambling products either during sporting events or at the half-time break in sporting events and so on. That has been a real concern because people want to be able to watch a sporting event with their kids without having a conversation about what it means that a player is $9 to score the first try or whatever the particular product on offer might be. So, sensibly, the government is saying that during those sporting broadcasts—five minutes before and five minutes after—there can no longer be gambling advertising. That is entirely appropriate.

The government is also moving on the antisiphoning list. This list has existed for a long time and is somewhat out of date. There are a number of events on the antisiphoning list that are very rarely seen on free-to-air or, if they are seen on free-to-air at all, generally by very small audiences. What this bill will do is take off a number of events from the antisiphoning list while leaving in place a whole range of all the key events in areas such as the AFL, NRL, cricket and so on. Again, it is a sensible reform.

Finally, the bill provides for a $30 million package for subscription television to assist it in investing in women's and niche sports on subscription TV. Women's sport is only about seven per cent of all sports broadcast in 2013. Through providing these additional funds, the government will foster and encourage greater broadcasting of women's sport on television. That is a good thing and it is good that that has broad support. This is an exceptional bill, and I commend it to the House.

10:47 am

Photo of Paul FletcherPaul Fletcher (Bradfield, Liberal Party, Minister for Urban Infrastructure) Share this | | Hansard source

Thank you to the members who have contributed to this debate on the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 and the Commercial Broadcasting (Tax) Bill 2017, which contain a number of key elements of the government's broadcasting and content reform package. It is a particular pleasure to follow, in this debate, the member for Banks, who, of course, is a former senior executive in the media and broadcasting sectors and indeed in the online and technology sector. He brings particular perspectives and expertise to this debate.

The government is committed to ensuring that Australia has a viable media sector and that diversity continues to thrive in our cities and in our regions. Together, the bills before the House this morning will abolish broadcasting licence fees and datacasting charges and introduce a new spectrum tax. They will also remove regulatory barriers and burdens that achieve little from a public policy perspective and undermine the sustainability of Australian media organisations. At the same time, the measures will ensure that independent sources of news, current affairs and similar programming continue to be available to all Australians, particularly those in regional areas.

This package has the unanimous support of all sectors of the media industry and they consider it to be vital to their longevity and viability. It is the Turnbull government's firm view that the proposed measures be considered as a whole to enable Australia's media industry to compete in an increasingly fragmented and global media environment.

Ultimately, the reforms contained in these bills strike the right balance between community concerns, public policy imperatives and industry interests. Outdated broadcasting licence fees will be abolished and replaced with a more sensible spectrum tax that recognises the value of what is, at the end of the day, a public resource. Ineffective and constricting media control and ownership rules will be repealed but with important protections put in place for the provision of local content. The antisiphoning scheme and list will be updated and rationalised while ensuring that iconic and nationally significant sporting events continue to be freely available to Australian audiences.

The 75 per cent audience reach rule is antiquated and redundant in a digital media environment. It restricts commercial television broadcasters from optimising the scale of their operations and does nothing in a practical sense to support media diversity. The two-out-of-three rule, which prevents a person from controlling more than two of the three regulated media platforms—commercial television, commercial radio and associated newspapers—also does little to support diversity in a contemporary environment. The rule was developed prior to the era of smartphones, social media and streaming services. It restricts traditional media companies from optimising the scale and scope of their operations and from accessing capital and management expertise in other media sectors, while their competitors, operating mostly online, face no such restrictions. The government rejects concerns that removal of the two-out-of-three rule will reduce media diversity.

The government certainly agrees that, in any healthy democracy, a wide range of perspectives and voices are necessary to inform public discussion and debate. However, it is important to recognise that the government is not seeking to change media regulation in a way that would jeopardise media diversity. In fact, in action by this parliament on these antiquated rules represents the greatest threat to media diversity. Important protections remain. Media transactions will continue to be subject to the remaining control and ownership rules in the Broadcasting Services Act 1992. The five-four rule provides that at least five independent media groups must at all times be present in metropolitan commercial radio licence areas and four such groups in regional commercial licence areas. The licence limits provide that a person may control only one television licence and a maximum of two commercial radio licences in an applicable licence area. Mergers and acquisitions in the media sector will also continue to be subject to Australia's general competition regulation under the Competition and Consumer Act 2010, overseen by the Australian Competition and Consumer Commission.

As I have stated, the strength of these bills is that they will usher in an integrated suite of reforms. They have the united support of the media industry. The various sectors have been able to put aside their individual differences and immediate interests to look forward to the good of the industry as a whole. They acknowledge that these reforms strike a balance between ensuring our media industry can achieve the scale and scope to compete in a global media environment as well ensuring that Australians continue to access a diversity of high-quality news and information services.

The media industry has worked together and with the government to craft this package and to support it with a united voice. Now is the time for the parliament to do the same and to take the opportunity to enable the Australian media industry to move into the 21st century. I call on all members to support the bills.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The question is this bill be now read a second time.