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Tuesday, 10 October 2006
Page: 69

Senator MURRAY (5:19 PM) —The two bills we are debating cognately are the Broadcasting Services Amendment (Media Ownership) Bill 2006 and the Broadcasting Legislation Amendment (Digital Television) Bill 2006. I note that the minister has circulated the substantive set of amendments and two supplementary explanatory memoranda. I have not had time to complete my understanding of those so my remarks will refer to the bills as they are before us.

I want to start by condemning the poor process the Senate inquiry had to put up with. Although the committee benefited from a hardworking, capable secretariat and from balanced, judicious and considerate chairing from Senator Eggleston, under constrained circumstances, the inquiry process has been poor. The inquiry has been characterised by too short a time for advertising, for the writing of submissions, for senators to read all the submissions, for the hearings themselves, for questions on notice to be answered and for the writing of reports.

The short time for submissions may be less of a problem for the megamedia groups that have been lobbying the coalition and have ready material to hand. It may be less of a problem for witnesses with deep pockets and extensive resources, such as the business sector. So the big end of town was probably catered for. But this process effectively restricted the evidence that could be encouraged and adduced from academics, other interested parties and members of the public. The disagreement between Senators Joyce and Brandis during the hearing was a direct consequence of the ridiculous state of affairs whereby the six coalition members present shared 10 or so minutes per witness.

Firstly, the Broadcasting Services Amendment (Media Ownership) Bill 2006 proposes new media diversity rules which would allow cross-media transactions to occur provided a minimum number of separately controlled commercial media groups were maintained in the relevant licence area. Secondly, it proposes the removal of all restrictions on foreign ownership and control of commercial television and subscription television. It will permit cross-media mergers that are currently prohibited. This is the bill that is the most contentious of the four bills that comprise the package.

The digital television bill provides for three major policy changes. The first change relates to the requirement that commercial television broadcast licensees provide a high-definition television simulcast version of their analog and standard television services. The second policy issue addressed by the bill is the moratorium on the grant of new commercial free-to-air television broadcast licences. The third issue relates to the non-broadcasting services band licences.

The Australian Democrats do not oppose media industry reform. We strongly support the modernisation and improvement of statute and regulation with respect to the media industry, predicated on the introduction of greater competition, not less competition, and meaningful diversity. Much of the technology for media delivery in the future—and that future is not far distant—will be on telecommunications platforms. That being the case, it is essential that, for telecommunications and media, we establish guaranteed, affordable services available to all but the remotest Australians and enforced through legislated customer service obligations. For the rest, the market needs to be as free and open as possible. We need to distinguish in these matters between consumer needs and political or societal needs. Consumer needs are satisfied by free rein being allowed for new technology and a maximum variety of product types. That is best guaranteed through few barriers to entry and through encouraging real competition.

The minister for communications and other government figures have tried to answer the charge that the coalition’s proposed new weak cross-media rules will result in the excessive and dangerous concentration of media power in a few hands by pointing to the Australian Competition and Consumer Commission as the safeguard. Under the existing provisions of the Trade Practices Act, preserving or enhancing a democratic institution of the fourth estate, the media, is not a matter that the ACCC will concern itself with. During the hearing I asked this question:

Just so that we have it on the record, when you consider a merger proposition in the media industry in future you will not consider the issue of whether it will contribute to the health of our Australian democracy, will you?

Mr Graeme Samuel, Chairman of the ACCC, answered: ‘No, we will not.’

For any members of the public foolish enough to think that corporate self-interest and manipulated information and opinion might be uncommon in the Australian media, Mr Christopher Warren, Federal Secretary of the Media, Entertainment and Arts Alliance, told the inquiry that about half of the journalists they had surveyed said that ‘they had been required to report in a way that favoured the corporate line of their employer’ and that one in five ‘had been required to report in a way that favoured the political line of their employer’. I would give odds that the pressure on editors and management to toe the line is much higher.

It seems very hard to find ways to combat all this. So, from the vital democratic ‘fourth estate’ perspective, the only way to protect a diversity of opinion, news gathering, information and influence is to ensure a diversity of meaningful or real voices, a diversity of media types, a diversity of journalists and owners, and by maximising competition and restricting, even reducing, cross-media ownership.

We Democrats recognise that the technological and market changes, which have occurred in the media industry over the past 10 years and in technology at increasing speed over the last five years, make it imperative that media law and regulation keep pace with the market and technology and create a sensible and effective forward-looking regulatory environment for the future. If we are to have media markets freed from oligopoly, this government must pursue policies to increase diversity of views and voices. If we are to have a fair and open society, this government must pursue policies to increase diversity of views and voices. It must improve the use of and access to new technology, such as digital and broadband; it must ensure open access to media content; it must ensure that there is an adequate level of local and Australian content; and it must protect the independence and freedom of journalists and the media. It must also contribute to the quality of the product that is put before the Australian consumer. Failure to protect diversity of viewpoints is a failure to protect the necessary public debate that makes our democracy function.

The government have no evidence to support their assertion that these reforms will not lead to a concentration of the media market. They exaggerate the beneficial market impact that the internet and new media have and will, on credible information, supply in contrast to traditional media or ‘old’ media. In November 2005 a Roy Morgan poll found that 48 per cent of Australians get their main source of information from television, 22 per cent from newspapers, 19 per cent from radio and only eight per cent from the internet. The internet market share data from ACNeilsen shows that Australian content on the internet is now more concentrated than in the ‘old’ media of newspapers, magazines, radio and TV. Clearly, an informed, professional and independent ‘traditional’ diverse media is still necessary. Again, this is what Mr Graeme Samuel, Chairman of the ACCC, told the inquiry:

We think the internet is simply a distribution channel. It has not shown any significant signs at this point in time of providing a greater diversity of credible information and news and commentary …. the primary sources of news, information and the like still are your mainstream sources: the ABC, and Fairfax. They tend to be the primary sources of credible, timely news and information and discussion.

The government has tried to focus on how this package affects consumers, but more important is how it affects our democracy. Likewise, the submissions before the Senate committee from media owners overwhelmingly concentrated on their economic needs, not Australia’s need for an energetic, independent and diverse fourth estate. One witness’ body language was something to behold in his barely suppressed rage that the senators at the hearing were more concerned with fourth estate issues than media business issues and those issues that affected his self-interest.

The lesson is that media owners’ and investors’ self-interest must be tempered by the legislators—that is, us—in the national and the public interest. The freedom of the press to report whatever and however they need has long been recognised as absolutely vital to democracy, and this freedom is most effective and relevant when there are a variety of diverse views of substance. Modern concentrated media power is such that, if that power is not to be abused, it needs to be dispersed and multiplied, not concentrated further. Evidence to the inquiry showed that Australia already has one of the most concentrated media sectors in the democratic world. Mr Eric Beecher, one of the owners of, a former editor of the Sydney Morning Herald and a former editor-in-chief of the Herald and Weekly Times group, said this to the committee:

Currently in Australia most journalism of significance is in the hands of five families plus the Fairfax organisation. Let us be specific about that: in the regional areas, it is the O’Reilly family and the John B Fairfax family, and in the metropolitan areas it is the Murdoch, Packer and Stokes families and the Fairfax organisation, which used to be family owned and is now institutionally owned. So you have six unelected groups—five of them families—and they are the gatekeepers of news and opinion in this country.

He went on:

The consolidation of the media industry in this country has been going on for years. In the 1980s there were 13 daily newspapers in the five capital cities and they had nine different owners. Today there are seven daily newspapers—almost half—and they have four owners.

                  …         …           …

It is the most concentrated media ownership in the Western world. We all know that, we talk about it, and yet we are sitting here talking about concentrating it even further.

Add to that a pertinent comment from Senator Joyce, who remarked that he had not been getting any constituent calls asking him to go back to Canberra to make sure that he got more media concentration. Has anyone? What is this all about, then? What is this bill about, which will result in more media concentration?

My clear impression of many media owners is that they fear too many competitors—witness their opposition to a fourth free-to-air TV channel. Many in the community fear too few media owners. From the perspective of consumers and from our democracy, the central issue is that we need more competition, less concentration and more diversity in all media markets. Media diversity and independence are critical to the public debate that makes our democracy function well. Any concentration of the market in a few manipulative hands will reduce diversity in views and voices. It may also reduce quality and Australian content. If those were the outcomes, that would not be good for consumers or our democracy. Therefore, the starting point for revising these proposals has to be the regulators—the ACCC, whose role is to decide on mergers and acquisitions; ACMA, whose role is to apply and enforce media standards; and the Foreign Investment Review Board, whose role is to determine foreign ownership levels.

The very first requirement in any matter of industry regulation is to ensure competition is protected. It is not credible for the minister to assert that the ACCC and the minister will control any proposed media mergers adequately, because there are insufficient safeguards in our present laws. The Dawson bill—the Trade Practices Legislation Amendment Bill (No. 1) 2005, held up in the House of Representatives—will actually reduce safeguards because it allows for forum shopping and the application of different principles between the ACCC and the Australian Competition Tribunal. Without very significant strengthening of the Trade Practices Act, including section 46, and including divestiture provisions, plus the addition of a media-specific public interest test, any media market deregulation through this legislation seems bound to result in reductions in real competition and a greater concentration of media power.

I have outlined elsewhere at length the weakness of the Trade Practices Act 1974 with respect to mergers and acquisitions, such as in these remarks I made in an adjournment speech three years ago:

Balanced divestiture laws are the corollary of balanced merger laws. We do not have effective divestiture laws. It is a strange and illogical policy that can prevent mergers to maintain effective competition but cannot require divestiture also to maintain effective competition.

The non-government members of the March 2004 Senate Economics References Committee report into the effectiveness of the Trade Practices Act 1974 in protecting small business accepted the proposition that divestiture powers were essential. Even the government, which over 10 years has failed to strengthen competition laws, has accepted that the Trade Practices Act needs strengthening, although it has done nothing to translate its in-principle acceptance into legislation. The government accepted five recommendations—and three in part—of the Senate Economics References Committee, all made well over two years ago, but these are not yet law. The government seems divorced from reality. It does not even recognise that it is simply bad policy to introduce much looser media concentration rules without simultaneously introducing legislation to bolster general competition law.

The new ACMA only partly attends to the minimum competition requirements. It must be understood that ACMA’s role comes into play once you hit the ceiling of the number of voices that are determined through this legislation. When mergers are considered above that ceiling, ACMA has no part to play at all; it is the part of the ACCC to consider those matters. Nevertheless, having said that, I still agree with the Liberals’ view that ACMA’s competition role does need to be strengthened to take account of the situation when the new level of voices is to be considered.

Excessive concentration, a loss of diversity and increased abuse of media power are matters which concern society. These are values matters and political matters, requiring public interest judgements. You might think that the public are unaware mostly of what is going on right now, but later on when they find out what has happened there will be a reaction. All is not lost, provided the government does come to its senses. Mr Samuel made it clear that the ACCC would be able to deal with public interest issues if there were a law change to allow them to do so.

The Productivity Commission’s broadcasting report of March 2000 looked into a range of conflicting policy issues including convergence, media markets, protecting diversity and cultural identity. A key recommendation from the Productivity Commission was that the cross-media ownership rules should not be repealed or changed until the following had been achieved: the removal of regulatory barriers to entry, including making spectrum available for new broadcasters; the repeal of restrictions on foreign investment, ownership and control; and amending the Trade Practices Act to provide for a media-specific public interest test to apply to mergers and acquisitions.

The Productivity Commission said that the Trade Practices Act is unable to deal effectively with cross-media mergers and mergers between ‘old’ and ‘new’ media which could affect concentration and diversity in the ‘market for ideas’. They said that a media-specific public interest test should be added to the act. The Productivity Commission believed cross-media rules should be removed once a more competitive media environment is established—that is, when the media-specific public interest test is in place; foreign investment is permitted under normal guidelines; the ban on entry of new television stations is removed; and a significant amount of spectrum is available for new entry. Of those conditions, the government have picked up one in full and one partly. They have not picked up the media-specific public interest test, they have picked up that foreign investment be permitted under normal guidelines, they have not lifted the ban on entry of new television stations, and they have partly allowed for a significant amount of spectrum to be available for new entry.

In the media ownership bill, the government proposes the removal of media-specific foreign ownership and control restrictions in the Broadcasting Services Act 1992 and the discontinuation of newspaper-specific foreign ownership limits under Australia’s foreign investment policy. The media would be retained as a ‘sensitive sector’ under the foreign investment policy. In principle the Australian Democrats could agree with the lifting of foreign ownership restrictions to enable more competition in the market, subject to some important caveats. We do agree that it be retained as a ‘sensitive sector’ under the foreign investment policy. The fourth estate is a vital institution in democratic processes. For that reason, and that reason alone, it must be a sensitive sector.

In the foreign investment policy as it is normally applied, the last stop is the Treasurer. The Treasurer can decide whether a matter is to be approved or not. But with respect to media, the one thing that should not be allowed to continue is the Treasurer’s role. No politician should be able to secretly approve a new entrant to the media market—which is what the process allows for. It must be done independently or by the parliament. You cannot ask a politician—and I am not referring to the present Treasurer or to past treasurers; I am looking to the future—to make a decision which could influence the prospects of their party or indeed their own candidacy.

There are many issues to consider here. Firstly, if other countries close their media or parts of their media to competition from Australia, why should Australia allow those countries to buy Australian media outlets? If noncitizens in one country are prohibited from owning or operating TV stations or are subject to ownership caps or other barriers to entry, as is reported, why should non-resident foreigners from those countries be allowed to run Australian television stations or other media? The next question is one that cannot be avoided. Nationalism is an issue in Australia. Australians do not seem to concern themselves much with foreign media ownership that already exists from relatively similar countries like Canada, the USA and Great Britain. Based on what I read, see and hear, I expect they may be less comfortable with some types of ownership from other countries, but Australia cannot discriminate by race or country. If foreign ownership is to be allowed, it has to be open to all. This is well understood by some witnesses. I will quote the question I put to Mr Nicholas Falloon, Executive Chairman of Network Ten, at a committee hearing. I asked:

And your position is, isn’t it, that with respect to those issues that you might describe as nationalism they should be catered for by local content rules and rules about the coverage of news and information with respect to Australia? Is that correct?

Mr Falloon—Again, correct.

Senator MURRAY—And in principle, of course, opening the market to foreign owners means that it does not matter whether it is an owner from France, the United States, Great Britain, Canada, China, India or, indeed, Iran?

Mr Falloon—Again, correct.

(Time expired)