Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 11 October 1984
Page: 1661


Senator GARETH EVANS (Attorney General)(3.33) —I move:

That the Bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

BROADCASTING AND TELEVISION AMENDMENT BILL 1984

The purpose of this Bill is to implement a number of recent government decisions in relation to the supplementary licence scheme, loopholes in the ownership or control provisions of the Broadcasting and Television Act 1942 and recommendations of the Administrative Review Council regarding Australian Broadcasting Tribunal inquiry procedures. I shall be shortly introducing related amendments to the Broadcasting Stations Licence Fees Act 1964 and the Television Stations Licence Fees Act 1964.

The proposed amendments can be summarised as follows: In relation to supplementary licences the Bills will implement government decisions on three issues. These are, firstly, insertion of concentration of media ownership as a factor to be considered by the Australian Broadcasting Tribunal in considering supplementary radio or television licence applications; secondly, the aggregation of gross earnings to determine total licence fees payable by those holding both a supplementary and commercial station licence; and thirdly, empowering the Australian Broadcasting Tribunal to determine progressive commencement dates for transmission facilities required to provide a supplementary radio or television service;

The Bill will also close certain ownership or control loopholes relating to the acquisition or increase in a prescribed interest by means of voting control, and indirect acquisitions of excess prescribed interests in licensee companies. In relation to Australian Broadcasting Tribunal inquiries this Bill includes amendments to provisions which prescribe the composition of the tribunal for the conduct of inquiries as well as amendments to provide for extension of a licence pending completion of a renewal inquiry.

There is expected to be an increase in government revenue arising from the proposed amendments of the licence fees Acts. However, it is not possible, at this time, to provide a realistic estimate of the extra revenue which may be obtained. The other amendments which I have briefly outlined will not result in any significant costs, revenue or savings to the Government.

I now turn to the detail of the proposed amendments.

(A) Supplementary Licences

Concentration of Media Ownership

I remind honourable senators that the major purpose of the supplementary licence scheme is to provide a greater degree of commercial programming choice to people living in areas which are outside the mainland State capital cities and which could not support an additional commercial radio or television service, without threatening the viability of existing services in the area.

Honourable senators will recall that, in a parliamentary statement on 30 November 1983, my colleague the Minister for Communications (Mr Duffy) indicated that the supplementary licence scheme would proceed. The Minister also foreshadowed the introduction of legislation to make explicit the need for the Australian Broadcasting Tribunal to take concentration of media ownership in an area into account when deciding whether it should grant a supplementary licence or recommend that applications for an independent commercial licence should be invited. The Minister pointed out that, just as the Government is committed to the proposition that the greatest possible diversity of programming ought to be available to audiences wherever they live in Australia, so we are also committed to the proposition that, in any area, programming diversity ought to be provided by as wide a range of competitively and independently owned media outlets as possible.

The Labor Party, when in opposition, supported the broad thrust of the supplementary licence scheme. However, at the time, concern was expressed that the scheme had the potential to exacerbate concentration of media ownership in a number of areas. For example, in some areas, one company could own or control the sole commercial radio station and the sole commercial television station and , in some instances, the local newspaper as well.

Sub-section 83 (6) of the Broadcasting and Television Act requires the Tribunal to have regard to specific public interest criteria when it is considering whether to grant a supplementary licence application or to recommend that applications be invited for an additional commercial licence. This Bill will also add concentration of media ownership or control in the area to be served, to the public interest criteria to be considered by the tribunal. The term ' media' has been defined so as to include Press, radio and television.

This amendment is consistent with the Government's policy of encouraging diversity in programming and control. It should be emphasised that this amendment does not purport to empower the Tribunal to regulate Press ownership or control. It merely directs the Tribunal to take account of all relevant media interests in determining whether a supplementary licence should be granted or whether it considers that a fully competitive service would be both viable and in the public interest.

Aggregation of Licence Fees

In the Minister's statement on 30 November 1983 he also foreshadowed the introduction of legislation to require that revenues earned by a company holding both a commercial and a supplementary licence, whether for radio or television, be aggregated for the purpose of determining the total licence fees payable to the Commonwealth. In a case where a supplementary licence is held by a consortium of companies, licence fees will be calculated for each member on the aggregated gross earnings from its commercial licence and its share of the gross earnings of the supplementary licence.

The Government considers that these proposals are fair and equitable. Supplementary licences represent a benefit which is available only to those who already hold a licence, and aggregation of earnings accurately reflects the total use made by the licensee of the radio frequency spectrum.

I will shortly introduce amendments to the Broadcasting and Television Stations Licence Fees Acts to provide for these proposals.

This Bill includes a consequential amendment of section 106 of the Broadcasting and Television Act to enable the Australian Broadcasting Tribunal to request both aggregated and separate accounts and other records for related commercial and supplementary stations. This amendment ensures that the Tribunal can obtain all financial information which is relevant to the calculation of licence fees.

Progressive Commencement of Transmission Facilities for Supplementary Services

The service area of a supplementary service will be substantially co-extensive with the area served by the related commercial station and any associated commercial translator stations. Multiple transmitting facilities may be required to deliver the service to the whole of the service area but, in contrast to other services, supplementary translator stations will not require separate licences. Section 89C of the Act presently requires that all transmission facilities required to provide a supplementary service must be brought into operation on a single date for commencement of the service, as specified by the Tribunal. The Government recognises, however, that where multiple transmission facilities are required, it may not be practicable for the supplementary licensee to commence the service throughout the service area on a single commencement date.

The Bill therefore provides for amendment of section 89C to empower the Tribunal to determine dates for progressive commencement of supplementary licence translator stations. The amendment will enable the Tribunal to evaluate the economic arguments associated with any application by the supplementary licensee to phase in the operation of supplementary translator stations. If these arguments are accepted, the Tribunal may determine that supplementary translator stations shall be brought into service progressively over the five- year period for which a supplementary licence is granted.

(B) Ownership or Control Loopholes

On 19 July 1984 the Minister for Communications announced the intention of this Government to introduce amending legislation in order to close two potential loopholes in the ownership or control provisions of the Broadcasting and Television Act. The Minister indicated at that time that the necessary amendments would take effect from the date of his announcement to prevent exploitation of the loopholes before legislation is in place.

Voting Rights Loophole

The first potential loophole in the Act may have allowed a person who acquired voting rights, rather than a shareholding interest, in a licensee company to avoid those provisions of the Act which were intended to require a process of approval by the Australian Broadcasting Tribunal to an acquisition of, or increase in, a prescribed interest, in a licence. The effect of the loophole is that significant changes could occur in the control of licensee companies without the approval of the Tribunal. In such an event, the Tribunal's role in overseeing changes in ownership or control, in accordance with the public interest criteria set out in the Act, would be undermined.

The Bill closes this loophole by extending the requirement for Tribunal approval to cover any transaction by which a person acquires a prescribed interest in a licensee company or, being already the holder of interests in a licence of a kind amounting to a prescribed interest, acquires further interests of that kind in the licence. The Bill provides that the relevant amendments apply to any transaction which has taken place since 19 July 1984, being the date of the minister's announcement of the government's intention to close the loophole.

Indirect Interest Loophole

The second potential loophole is the unintended result of amendments introduced in 1981 by the previous Government. Those amendments were intended to provide a six months period of grace to persons who unintentionally breached the ownership or control limitations of the Act by virtue of share transactions to which they were not parties. The loophole occurs in a situation where a person or company acquires a prescribed interest in a licensee company as a result of a transaction to which they themselves were not a party and where the parties directly involved in the transaction do not require Tribunal approval under the Act.

Using this loophole, it may be possible for a company, through acquisitions by its subsidiary companies, to acquire any number of prescribed interests in radio and television licences and therefore to completely nullify the multiple ownership or control provisions of the Act. On a literal interpretation of sections 90C and 92 of the Act a third party who acquired excess prescribed interests in this way would not commit an offence under the Act.

The Bill closes the loophole by providing that, where a party to a transaction does not require Tribunal approval of the transaction, but a third party acquires an excess prescribed interest by virtue of the transaction, the third party must reduce his holdings to the prescribed limits within six months of a Tribunal decision to either approve or not approve the transaction in relation to the third party. An application for approval must be lodged with the Tribunal within 28 days of the transaction. However, if the third party fails to lodge an application with the Tribunal within 28 days he will be in immediate breach of the Act and no period of grace shall apply. These amendments also apply to any excess interest acquired in this manner since 19 July 1984, when the Minister announced the government's intention to close the loopholes.

(c) Tribunal InquiriesI turn now to proposed amendments relating to recommendations of the Administrative Review Council contained in its report on Australian Broadcasting Tribunal procedures. That report was submitted in February 1981 to the then Attorney-General in the previous Government. In its report, the Council recommended amendments to the Broadcasting and Television Act and the introduction of associated regulations to establish uniform procedures for the conduct of inquiries by the Australian Broadcasting Tribunal. On 10 September 1984 the Minister for Communications announced that, subject to some minor modifications, the Government accepted the Council's recommendations.

The present Bill covers only two of the Administrative Review Council's recommendations which are considered vital to the efficient operation of the Tribunal and which are severable from other matters. These measures relate to the constitution of divisions of the Tribunal, and provision for extension of a licence until the Tribunal has completed an inquiry. In the short time available since the Government's decision, it has not been possible to prepare all of the necessary amendments. It is expected that the drafting of legislation for the remaining matters will be completed in time for the 1985 autumn parliamentary sittings.

Constitution of Divisions for the Conduct of Inquiries by Tribunal Members

The Broadcasting and Television Act, at section 15C, empowers the Tribunal to constitute divisions consisting of one or more members or associate members for the purpose of holding an inquiry, except for inquiries into renewal of a metropolitan commercial radio or television station licence or into the suspension or revocation of such a licence, which must be conducted by a majority of Tribunal members. In 1982 the maximum membership of the Tribunal was increased from five to eight members. Having regard to the significant increase in the Tribunal's work load in recent years, the increase was vital to the effective functioning of the Tribunal. However, the benefits of the increase in membership have been significantly reduced by the requirement that a majority of Tribunal members must sit in all metropolitan commercial licence renewal inquiries. There are presently seven members on the Tribunal requiring at least four members to sit on metropolitan renewal inquiries. This would increase to five if the Tribunal was at full strength.

The Administrative Review Council recognised the clear need for the Act to be amended in a manner which allowed for efficient allocation of Tribunal resources . It recommended that the Chairman of the Tribunal be empowered to determine the number of members who would constitute a division for the purpose of an inquiry. While accepting the need for flexibility in this area, the Government considers that statutory safeguards are desirable to ensure that licensing decisions affecting substantial commercial interests are made by more than one Tribunal member. It has been decided, therefore, to retain a requirement that a minimum of three members must sit on inquiries in relation to a metropolitan commercial licence renewal, or a suspension or revocation of a licence. Apart from this qualification, the Bill provides that the Chairman shall determine how many members are to comprise a Tribunal division in each case. The Bill provides also that in special circumstances the Chairman of the Tribunal may add members to a division or replace a member of a division after the commencement of a hearing. An example of circumstances which might warrant the addition of a member to a division would be a case where a single member is appointed to a particular inquiry, and substantive issues are raised after the hearing commences, such as a serious breach of a licence condition. If the membership of a division is increased then the hearing will recommence unless all parties to the inquiry otherwise agree. A member of a division cannot be replaced after the commencement of a hearing unless the member has ceased to be a member, or has ceased to be available, for example, due to illness.

In accordance with a recommendation of the Administrative Review Council the Bill provides that, in most circumstances, only members of a division may participate in the decisions, reports or recommendations in relation to the relevant inquiry. This ensures that members who did not participate in the relevant inquiry and who may be unfamiliar with all of the relevant material, are not able to override the views of the members of the division. The only exceptions to this rule will be in the case of an inquiry held pursuant to a ministerial direction under section 18 (2) of the Act, or inquiries in relation to the determination of program or advertising standards under section 99 and section 100 of the Act. In these cases the Chairman of the Tribunal may direct that the full Tribunal shall make the decisions, reports or recommendations if he considers it desirable to do so. This may be on the basis that it involves major policy issues in which all members of the Tribunal have an interest.

Short Term Extension of Licences Pending Completion of a Renewal Inquiry

Section 86 of the Broadcasting and Television Act requires applications for licence renewals to be lodged with the Tribunal not less than 20 weeks before the expiration of the licence. In most cases this provides adequate time for the Tribunal to complete an inquiry and to make a decision. However, in some cases, renewal inquiries raise complex and important issues which cannot be considered fully by the Tribunal before the licence expires. Also, in some cases, it may be necessary for the Tribunal to refer a question of law to the Federal Court, or a legal action may be launched by a party to the inquiry. In order to remove the pressure on the Tribunal to renew the licence before satisfactory completion of its deliberations the Administrative Review Council recommended that the Tribunal should have power to extend a licence until it had made a decision on the inquiry.

The Bill implements the Council recommendation by providing that a licence is automatically extended until the Tribunal takes a decision on whether or not to renew the licence. I commend the Bill to the Senate.

BROADCASTING STATIONS LICENCE FEES AMENDMENT BILL 1984

I foreshadowed this Bill in my second reading speech on the Broadcasting and Television Amendment Bill 1984. The purpose of the Bill is to require that the gross earnings of a company holding a licence for a commercial radio station and the related supplementary radio service be aggregated for the purposes of calculating the licence fee payable each year. The proposed amendments also cover the situation where a supplementary licence is held by a consortium of companies. In these cases the licence fee payable by each member of the consortium will be based on the aggregation of gross earnings of the member's commercial radio station and its share of the gross earnings of the supplementary service. Each member's share of the gross earnings of the supplementary service will be determined by reference to the proportionate share of the profits of the supplementary service to which the member is entitled. The existing provisions of the Act which provide that the licence fees payable each year are based on the gross earnings in the immediately preceeding year shall continue to apply. I commend the Bill to the Senate.

TELEVISION STATIONS LICENCE FEES AMENDMENT BILL 1984

I foreshadowed this Bill in my second reading speech on the Broadcasting and Television Amendment Bill 1984. The purpose of the Bill is to require that the gross earnings of a company holding a licence for a commercial television station and the related supplementary television service be aggregated for the purposes of calculating the licence fee payable each year. The proposed amendments also cover the situation where a supplementary licence is held by a consortium of companies. In these cases the licence fee payable by each member of the consortium will be based on the aggregation of gross earnings of the member's commercial television station and its share of the gross earnings of the supplementary service. Each member's share of the gross earnings of the supplementary service will be determined by reference to the proportionate share of the profits of the supplementary service to which the member is entitled. The existing provisions of the Act which provide that the licence fees payable each year are based on the gross earnings in the immediately preceeding year shall continue to apply. I commend the Bill to the Senate.

Debate (on motion by Senator Collard) adjourned.