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Thursday, 16 June 2005
Page: 29


Senator IAN CAMPBELL (Minister for the Environment and Heritage) (11:08 AM) —I move:

That these 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—

FILM LICENSED INVESTMENT COMPANY BILL 2005

The Government recognises the importance of a viable local film and television industry. The sector’s input both to our economy and cultural life is significant. As a whole, the Australian film and television industry contributes some $2.1 billion annually to GDP and employs more than 25,500 people. The Government wants the sector to produce increasing numbers of films that appeal to local and international audiences.

These are some of the reasons that the Government provides a range of support to this sector, thus ensuring its long-term sustainability. There is no question that, without Government intervention, there would be few local voices on our screens. Equally, the Government is keen to attract additional private sector investment in the film industry. The extension of the FLIC Scheme is one aspect of a package of measures designed to generate greater levels of private finance.

Despite that support, the Government acknowledges that it has become increasingly difficult for our film and television to compete both locally and abroad. While key creative Australians like directors and actors continue to attract international accolades, production levels and the box office performance of local films have fallen.

The Government does not resile from its responsibilities in assisting to arrest this downturn. Australia’s practitioners have expressed a determination to work through current challenges and the Government is also prepared to play its role. The extension of the Film Licensed Investment Company Scheme—known as FLIC—demonstrates our commitment in this regard.

The extended FLIC Scheme is part of a broader package of measures announced during last year’s election and was recently confirmed in the 2005-06 Budget. This package is worth $88 million over four years. As a result, total direct funding for film in 2005-06 is at a high of almost $160 million.

The package is a carefully balanced, strategic intervention and takes a ‘whole-of-industry’ approach. It is comprehensive and acknowledges that there is no single quick fix that can address current challenges. It will strengthen our film and television sector through a combination of increases in direct support to our film agencies and by making the film sector more attractive to private investors.

In the future, the Australian film industry—and, indeed, film and television sectors of a similar size around the world—must attract greater levels of private sector support. Private investment is an important complement to direct funding by Government. In Australia, film and television financing is usually a complex combination of investment from the marketplace, Government funding and private investors. Reduction in funding from one of these sources can make or break individual projects, and in the longer term, impact on the industry’s viability.

Support from individuals and corporate entities needs to grow as part of that fragile funding pool. The extended FLIC Scheme seeks to encourage that growth and bring the private sector investor back to film and television.

The Pilot FLIC Scheme commenced in 1999 and triggered $63 million worth of feature film production alone. It produced successful films like Crackerjack, Dirty Deeds and The Bank.

The extended FLIC Scheme is a key element in the Government’s film package which aims to restore investor confidence in the local film and television sector.

The focus of the Scheme is on encouraging investment in the production of Australian films. Production is the most costly aspect of filmmaking. Without adequate funding and appropriate investment levels to improve the quality aspects of production, the chances of success for a film or television program are significantly diminished.

To inject funds at the production or “front end” of the filmmaking process, the extended scheme will allow investors a 100 per cent up-front deduction on the purchase of FLIC shares in the year of investment. These funds will immediately flow to the FLIC, subject to certain licence conditions being met. The FLIC must be an Australian-owned and controlled company raising funds primarily from Australian investors in qualifying Australian films.

The extended scheme will allow a single FLIC licensee to raise up to $20 million over a two-year period at a total cost to revenue of $8 million in 2006-07 and 2007-08. Issuing of a single licence will minimise the duplication of administrative costs that may result from the issuing of multiple licences.

Funds raised by the FLIC will be invested in a range of film and television productions, thus spreading investor risk—and opportunity for commercial returns—across a production slate. Investment in marketing and distribution activities will be permitted under the extended scheme, up to a maximum of half of the amount which the FLIC invests in production. This will again ensure that the majority of FLIC investment is directed towards production, while allowing the company an appropriate opportunity to increase investor return through additional investment in marketing and distribution.

Co-investment from other market players will also be permitted under the extended scheme in order to maximise the value of productions. The intention is that FLIC monies will act as a trigger for larger commercial organisations, including broadcasters, distributors and other production houses, to invest in Australian productions. This will result in films with bigger budgets and quality, high-end production values. This in turn leads to greater opportunities for commercial success and improved returns to FLIC investors.

The extension of the FLIC scheme has been welcomed by the sector as a timely intervention in a difficult market where investor confidence in Australian films is low.

It will seek to revitalise private support and, combined with other recently announced taxation measures, restore investor confidence in our industry.


FILM LICENSED INVESTMENT COMPANY (CONSEQUENTIAL PROVISIONS) BILL 2005

The Film Licensed Investment Company (Consequential Provisions) Bill 2005 is a companion to the Film Licensed Investment Company Bill 2005.

The bill authorises an upfront taxation deduction for shares in the Film Licensed Investment Company (FLIC) purchased during the 2005-06 and 2006-07 income years by subscribing investors. The investor is not entitled to the deduction until the shares have been fully paid and issued to the shareholder. This arrangement mirrors the deduction available under the pilot scheme.

The upfront nature of the concession is consistent with taxation incentives for investment in individual qualifying Australian films under the Income Tax Assessment Act 1936. The FLIC Scheme combines the attractiveness of an upfront concession with the added incentive of spreading investor risk across a range of film and television productions.

Full details of the measures in the bills are contained in the explanatory memoranda to the bills.


MELBOURNE 2006 COMMONWEALTH GAMES (INDICIA AND IMAGES) PROTECTION BILL 2005

The purpose of the bill is to protect the Melbourne 2006 Commonwealth (M2006) Games sponsorship and licensing revenue from being undermined by unauthorised use of the Games indicia and images by corporate competitors of the official Games sponsors. The Government adopted a similar approach when it legislated to protect Sydney Games indicia and images through the Sydney 2000 Games (Indicia and Images) Protection Act 1996, as amended (the Sydney Games Act).

The hosting of the 2006 Commonwealth Games provides an unique opportunity to showcase to the world this country’s skills, talents, environment and achievements. Preparations for the Games have proceeded under the guidance of the Melbourne 2006 Commonwealth Games Corporation (M2006 Corporation), and the Victorian Office of Commonwealth Games Coordination (OCGC) and with a high level of cooperation between the Victorian and Australian Governments.

In 2001, the Victorian Government enacted the Commonwealth Games Arrangements Act 2001 (the Victorian Act), to facilitate preparations for the Games, including providing protection for M2006 Games indicia and images. The Victorian Act only applies within the State of Victoria and allows Victoria Police to seize goods and advertising material marked with M2006 Games indicia and images from within a Commonwealth Games venue, or a designated access area and only during the period 1 January to 31 March 2006.

The M2006 Bill is consistent with the approach the Australian Government took in protecting Sydney 2000 Games indicia through the Sydney Games Act. The bill has been designed to complement the indicia protection provisions of the Victorian Act. While the Victorian Act gives powers to Victorian Police to seize goods, this bill allows the Australian Customs Service to perform functions similar to those it undertook at the time of the Sydney 2000 Games by seizing goods marked with unauthorised indicia and images at Australia’s borders.

The task of organising the M2006 Games is large, complex, and expensive. The Victorian Government has allocated considerable sums of money in the lead up to the Games for the refurbishment of facilities and construction of infrastructure, organisation, and marketing.

The Australian Government is contributing $102.9 million in direct financial assistance and a further $177.9 million through the provision of support services. The Victorian Government has indicated the Games’ budget is $1.1 billion dollars and has committed almost $700 million to finance the M2006 Games.

Beyond the Government contributions, the primary sources of revenue for the M2006 Games will be television rights, ticket sales, sponsorship and the licensing of the right to use the Games’ indicia and images. Licensing and sponsorships are expected to contribute around $130 million to the Games’ revenue budget.

The Government recognises that the preservation of sponsorship revenue is essential to achieving a good budget outcome for the M2006 Games. The ability of the M2006 Corporation to attract sponsors will depend to a large extent on the degree of exclusivity afforded to the licensed indicia and images. Official sponsors recognise the commercial value of associating themselves with events of the magnitude of the Commonwealth Games and are willing to pay considerable sums of money to use the words and symbols associated with the Commonwealth Games.

“Ambush marketing”, however, has the capacity to seriously erode the official sponsorship revenue if not stopped or minimised. Ambush marketing is the unauthorised association of businesses with the marketing of an event without paying for marketing rights. Typically it is the competitors of official sponsors of major sporting events that engage in these activities. Ambush marketing can not only dissuade official sponsors from continuing their association with the Games but it has the potential to substantially reduce the amount sponsors are prepared to pay for the rights.

Therefore, the preservation of sponsorship revenue is not only critical to the protection of official sponsorship but indeed fundamental to achieving a sound financial outcome for the Games and ensuring the least call on the public purse.

The bill will protect the use of a range of words and expressions associated with the M2006 Games such as “Melbourne 2006 Commonwealth Games”, “M2006 Games”, and “Friendly Games” from ambush marketing and unlicensed commercial use in the lead-up to and during the M2006 Games.

In addition to protecting particular words, numbers and expressions, the bill also provides protection to certain images that in the circumstances of their presentation suggest, or are likely to suggest, a connection with the M2006 Games. These images may be either visual or aural representations. The manner in which M2006 indicia and images will be defined and protected by the M2006 Bill is consistent with the approach used to proscribe words, expressions and images under the Sydney Games Act.

The rights in the above protected indicia and images rest with the M2006 Corporation. It has the power to use and to authorise others to use M2006 indicia and images for commercial purposes.

To constitute use for commercial purposes, the M2006 Games indicia or images must be applied to a person’s goods or services for advertising or promotional purposes, or for enhancing the demand for the goods or services, and in a manner which would suggest that the person is or has been a sponsor of, or is or has been providing other support for, the M2006 Games.

In order to enable the public to be aware of the identity of those authorised to use M2006 indicia and images, a Register has been established under the Victorian Act upon which the M2006 Corporation is responsible for keeping account of authorised users and entering the details onto the Register. An entry in the Register will include the name of any person authorised by the M2006 Corporation; the date of authorisation; the duration of authorisation; whether the authorisation applies generally or in specified circumstances; and whether the authorisation authorises the use of all M2006 indicia and images or specified kinds of such indicia and images. A person whose name appears on the Register constitutes an authorised user of M2006 indicia and images.

While it is important to protect M2006 Games sponsors from ambush marketing, the rights of the community to freedom of expression must also be respected, particularly in relation to words that have passed into common usage. It must therefore be emphasised that restrictions on the usage of the M2006 indicia and images will apply only to unlicensed commercial use of the protected indicia and images. This is consistent with the approach adopted to protect Sydney 2000 Games indicia and images.

Moreover, it is made clear in the bill that the legislation is not intended to affect the working of many aspects of everyday business. It is recognised that some individuals and corporations, such as the Australian Commonwealth Games Association (ACGA) and the Commonwealth Games Federation (CGF), already use the indicia prescribed in the legislation in conjunction with their goods and services. The bill fully protects the rights of the ACGA and the CGF to use M2006 indicia to carry out its business functions.

Just as the Sydney 2000 Games Act permitted the use of Sydney 2000 Games indicia or images solely for the purposes of providing information, or for the purposes of criticism or review, so to does this bill in relation to M2006 indicia and images. The bill therefore permits the provision of information for the purposes of reporting news and presentation of current affairs, the factual description of goods or services provided by a business (such as stating that accommodation is available at a hotel that is located near a Commonwealth Games site), or factual statements by an athlete to promote their own achievements. Examples of criticism and review permitted by this bill include reports which are likely to appear in newspapers, magazines or similar periodicals, in radio and television broadcasts, or in cinematographic films.

The Government also recognises that the reasonable needs of sporting bodies in relation to fundraising for and promotion of their preparation of athletes and teams for the M2006 Games should be allowed to continue. Those reasonable needs could involve use of the M2006 Games indicia or images for the purposes of providing factual information. The bill is not intended to affect this type of use.

Similar to provisions contained in the Sydney 2000 Games Act, this bill also provides various remedies to the M2006 Corporation and authorised users to enforce their rights in relation to the M2006 indicia and images. This means the M2006 Corporation or an authorised user may bring an action against an unauthorised user. The remedies available under the bill include injunctions, damages and corrective advertising. The courts also have the discretion to provide remedies under any law (either State, Territory or Commonwealth) and most notably, the Trade Practices Act 1974 in relation to engaging in conduct that is misleading or deceptive.

The bill also includes appropriate measures to limit the possibility of the importation of goods which seek to ambush the Games marketing. The Australian Customs Service will be able to carry out the measures of this legislation relating to the monitoring of imported goods at Australia’s borders.

The bill will have a limited period of application and will cease to have effect from 1 July 2006.

The protection provided by this bill will complement the indicia and images protection provided under the Victorian Commonwealth Games Arrangements Act. It will also enhance the protective measures already in place under Australia’s current intellectual property laws to ensure to the extent possible, that a good budget outcome is achieved for the Melbourne 2006 Commonwealth Games.

Debate (on motion by Senator Ian Campbell) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.

Ordered that the Melbourne 2006 Commonwealth Games (Indicia and Images) Protection Bill 2005 be listed on the Notice Paper as a separate order of the day.