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Monday, 24 May 1965

Senator MCCLELLAND (New South Wales) , - If one compares the second reading speech of the Minister for Customs and Excise (Senator Anderson) in introducing the Bill into this chamber this evening with the second reading speech of the Postmaster-General (Mr. Hulme) in introducing the Bill in another place, one must come to the conclusion that this Government is frightened of using the word " monopoly" or any derivative thereof. It would appear that Senator Anderson's speech was deliberately framed to exclude reference to such a term in an endeavour to hide the fact that there is a monopoly existing in the television industry today. In the second reading speech made in another place by the Postmaster-General, one sees in the very first paragraph this sentence -

Certain alterations are also proposed in respect of the way in which, in the future, problems in respect of what is termed " the monopolisation of programmes " will be dealt with.

The comparable passage in Senator Anderson's speech reads -

It is also proposed to make certain alterations to the manner in which, in the future, problems in respect of programme matters are to be dealt wilh.

There is no reference to monopolisation in this chamber, and one asks: Why? One need only turn to the second reading speech of the Minister who introduced the Bill in the other place. In this context he said -

In introducing the i960 Bill to the House my predecessor explained that the provisions of section 105a were intended primarily to prevent any monopolising of television programmes.

In the corresponding passage in the speech of the Minister in this place the word " monopolising " has been deleted and the word " cornering " has been substituted. The passage is in these terms -

When the 1960 legislation was introduced, it was explained that the provisions of section 105a were intended primarily to prevent the cornering of television programmes.

One really wonders whether the Government, by the deliberate changing of the word, is trying to cover up for the vested interests which control this industry. On this basis alone, not to mention many others, I move, on behalf of the Opposition the following amendment to the motion that the Bill be read a second time -

That the following words be added to the motion: " but the Senate is of opinion that a Senate Select Committee should bc appointed to inquire into and report upon shareholding, networks and control of companies holding and operating broadcasting and television licences."

I am sure honorable senators will agree with me that this is a very important piece of legislation, affecting one of the most powerful media, if not the most powerful medium, of mass communication. Although this matter obviously has been receiving the attention of the Government for a considerable time, not only the Government, not only the Minister, but also those advising the Government on this important aspect have, in rather typical fashion, been responsible for the introduction of this legislation in the dying hours of the sessional period. The Minister in this chamber commenced his second reading speech at about 8.40 p.m. and completed it at about 8.57 p.m. Now, at 9.40 p.m., the Opposition is called upon to debate the Bill. Honorable senators have been able to peruse the legislation only cursorily. They certainly have not been allowed much time to give it detailed consideration, although the Minister, in his second reading speech, readily admits that this is a rather complex matter.

I have used the words " typical fashion " deliberately because if one traces the history of legislation affecting broadcasting and television one can see readily that amendments to the Broadcasting and Television Act have all been introduced in previous years in the dying hours of a sessional period. I refer, first, to the amendment of 1960. The Bill, which is now Act No. 36 of 1960, was introduced on 31st May 1960. It received a third reading on 2nd June 1960 and the Senate rose on 2nd June 1960. In 1961 there were further amendments to the Broadcasting and Television Act. The third reading took place on 18th May 1961 and the Senate rose on 18th May 1961.

Then in 1962 there were more amendments to the Act. The third reading took place on 6th December 1962 and the Senate rose in the early hours of the morning on 7th December 1962. In 1963 the amending Bill was introduced on 29th October, the third reading took place on 30th October 1963 and the Senate rose on 30th October 1963. There was an amendment in 1964 related to combined radio and television listeners licence fees but that did not affect the administrative provisions of the Bill. However, in 1964 a bill was introduced to amend the general provisions of the Act. The third reading took place on 12th November 1964 and the Senate rose on 18th November 1964.

This would rather tend to indicate that legislation of this nature has not received detailed consideration by this Parliament for some considerable time. Because it is a matter affecting the most powerful medium of mass communication, I believe that the Parliament is entitled to more opportunity to give it detailed consideration. Surely the present situation indicates that while the Minister and his advisers have taken their time over the introduction and presentation of amendments to this very important Broadcasting and Television Act - I understand a number of amendments were even introduced in the other place after the second reading speech had been made - over a number of yeaTs the Parliament has given scant consideration to amendments to the Act. Perhaps it is because of this lack of proper and adequate consideration of legislation of this kind that the Government now finds itself trying to overcome the problems which are arising in this industry. Previous legislation was poorly drafted or poorly presented, and powerful commercial interests have been able to take advantage of the situation.

In his second reading speech the Minister claimed that the primary purpose of the Bill is to amend the present provisions of the Broadcasting and Television Act to make more effective the provisions relating to ownership and control of television stations. He also stated that certain alterations are proposed in relation to the way in which problems regarding the monopolisation of programmes, to use the words of the Post master-General, or the cornering of programmes, to use the words of the Minister in this chamber, will be dealt with.

I say quite bluntly and frankly that this Bill clearly is an admission that the Government and its instrumentality, the Australian Broadcasting Control Board, have failed completely to keep in check, according to Government policy, licensees of commercial television stations. This is legislation which, when enacted, will preserve the commercial interests of those who have gained advantages in the face of Government policy merely because they have been able to find ways and means of skirting around the legislative intention of the Government. In short, those who had licences which were functioning prior to 17th December of last year, who had entered into the purchase of shares, who had entered into takeover arrangements or who had evolved systems of networks prior to that date, will be able to retain them under the provisions of this Bill.

Senator Wright - What is the validity of the 5 per cent, interest as a criterion of control?

Senator MCCLELLAND - I will come to that later. This legislation appears to me to be designed to catch up with those who might come into the industry in the future, but it preserves for existing licensees all that they have gained in the past. What its effect in the future will be no one can foretell at this stage, having regard to the fact that difficulties were experienced after the 1960 legislation which was introduced to overcome the very problems that now confront the Government. I have little doubt that ways and means will be found by some people to circumvent some of the proposals now before the Parliament.

Let us consider the history of this matter. For this purpose I turn to the second reading speech of the former PostmasterGeneral, Mr. Davidson, when he introduced the Broadcasting and Television Bill 1960. The Bill was designed to correct certain practices which had existed in the broadcasting and television industry only some 3i years after television had been introduced into Australia. The PostmasterGeneral of the day said as reported at page 1705 of "Hansard"-

First, the Government has made it quite clear by a definition of the word " control " that the former section 91 which now appears as section 92 refers not merely to legal control or control by voting power, but to practical and commercial control by any means. Next, the Government has felt that it will be necessary, in order to have certainty in the operation of this division, to fix a percentage of the voting power which shall be deemed to give control of the company and of its operations, lt should be borne in mind that this division is directed to preventing a person from having control of more than two licences. The policy of the provisions of the division is quite clear and in this respect quite unchanged, namely, that a person may lawfully be in a position to control two television licences providing they are not both in the same capital city, so that the various definitions and criteria set up by this division are particularly applicable to a person who has already placed himself in a position to control two television licenses and is seeking to control a third and further television licence.

That was one of the reasons why the 1960 legislation was enacted by the Parliament. Now we find practically the same situation existing in 1965. In the same second reading speech, as reported at page 1707 of "Hansard", the PostmasterGeneral of the day made this comment -

Mr. Speaker,this is necessarily a very brief account of a tremendously important part of this bill. It can be taken as an earnest that the Government, believing in a free-enterprise economy, knows that the protection of that economy at times requires measures to be taken against monopolistic and restrictive tendencies. It recognises that in taking any such action the safeguarding of genuine transactions which are beneficial to the maintenance of such a free economy is important. This area of mass communication is one in which the Government has consistently taken the stand that there should not be an undue aggregation of power in the hands of any few. Proposed new Division 3 is an endeavour to prevent such a situation from arising.

A new Division 3 was inserted in the I960 legislation and now we find in 1965 a new Divison 3 is again to be inserted. Let us consider the statements of the PostmasterGeneral in I960 and the statements made by the present Minister in relation to the Bill before the Senate. A situation has developed which if not in breach of the law is in conflict with the Government's stated policy. Clearly there is an admission by the Government and the Postmaster-General that between 1960 and 1965 there has developed in the industry an undue aggregation of power in the hands of a privileged few. Of course, this legislation will still allow such people to retain their influence over this most powerful medium of mass communication. Within three years of the 1960 legislation being approved the dangerous situation should have been obvious for everyone to see. One need only turn to the 1962-63 report of the Australian Broadcasting Control Board. At paragraph 111, we find a long statement by Mr. Davidson, the PostmasterGeneral of that time. In paragraph 1 10 of the report, the Board set out important changes in shareholdings in television stations and the Postmaster-General had this to say in paragraph 1 1 1 - . . In recent months there has been considerable movement in substantial shareholdings of commercial television companies and also amendments to the articles of association of some of the companies owning or interested in television licences have been made to enable persons and companies to own considerably more than IS per cent, of the capita] of such a company although not thus becoming entitled to exercise more than 15 per cent, of the voting strength of the company. Provisions are being inserted to the effect that no shareholder irrespective of the amount of his shareholdings may exercise more than 15 per cent, of the votes cast in general meeting. Also difficulties in the way of television stations obtaining access to first rate programme material have become apparent.

That comment was made in the fifteenth annual report of the Australian BrodacastinR Control Board for 1962-63. Now we find new legislation before us. The PostmasterGeneral then stated at paragraph 1 1 1 of the Board's report -

.   . The Government is anxious that the Australian people, both in the metropolitan and rural areas should have the best of programmes available and that television, as a powerful means of mass communication, should not fall into the control of too few hands.

That was some two years ago and already we find the situation confronting us again. Steps were to have been taken to prevent this occurring in the future but this legislation preserves all the advantages that have obtained over the past two years.

As I have said, the situation was evident to the Australian Broadcasting Control Board and to the Postmaster-General soon after the 1960 legislation was enacted but for some unknown reason, the Government has permitted this state of affairs to proceed on its own merry way. This has been to the advantage of the powerful friends of the Government - the owners of the licences of commercial stations - as is shown in the report for 1964 of the Australian Broadcasting Control Board. One has only to refer to that report to see what happened. In paragraph 99, the Board recorded changes in shareholdings in television stations. We find that TCN in Sydney which relates to Channel 9 acquired the following shares as reported by the Board -

Consolidated Press Holdings acquired an additional 175,800 stock units formerly held by Philips Electrical Industries Pty. Ltd. making its total 444,325 stock units. A total of 1,321,475 stock units are held in the licensee company by Consolidated Press Holdings Ltd. and associated interests.

The report deals with the issued capital of the company and then with Channel 10 in the Sydney area, which is owned by United Telecasters (Sydney) Ltd. There follows station CBN, owned by Country Television Services Ltd., in which A. & F. Sullivan Pty. Ltd. acquired 175,700 shares. Similar conditions apply to the Upper Namoi area, where we find that Breeza Investments Pty. Ltd. acquired a large number of shares in the licensee company. In the Newcastle area we find Newcastle Morning Herald and Miners Advocate Pty. Ltd. indulging in the acquisition of a large number of shares. We come next to station WIN in the Illawarra area, and to Ballarat and Adelaide.

In paragraph 100 of its sixteenth annual report the Broadcasting Control Board had this to say -

Paragraph 111 of the Board's Fifteenth Annual Report contained a statement by the former Postmaster-General, the Honorable Sir Charles Davidson, on transactions in the shares of Newcastle Broadcasting and Television Corporation Ltd., licensee of commercial television station NBN Newcastle, in which it was indicated that the Government had " decided that there should be a detailed review of the shareholdings and voting arrangements which have developed in relation to television stations and of the difficulties being experienced in connexion wilh the availability and control of programme material, with a view to considering whether, and if so what, amendments need to be made to the existing legislation in order to ensure that the policies of the Government are implemented." These matters were still under consideration by the Government al the time of preparation of this Report.

That was in 1964. The matter was first mentioned in the 1962-63 report. We find that on 17th December of last year the PostmasterGeneral made a statement in which he said that he hoped he would be able to introduce legislation of this nature, tightening up the voting arrangements and the control of these stations, in the present session of the Parliament. Now we find this legislation, made retrospective to 17th December last. In other words, all the things about which the Government has been so concerned and which have been made the subject of comment in the annual reports of the Broadcasting Control Board, have been allowed by this Government to continue.

Let me now say something about the networks. In his second reading speech the Minister said -

Another aspect of this matter which requires some comment, at this stage, is the proposal to repeal section 16 (3.) (e) of the Act which empowers the Board to regulate the establishment of networks of stations and the making of arrangements by licensees for the provision of programmes or the broadcasting or televising of advertisements. There has always been doubt regarding the application of this provision and it is, in fact, difficult to say precisely just what a " network " is.

The Minister said that it is difficult to say precisely just what a " network " is, but apparently this has not given the Broadcasting Control Board any trouble in nine years of association with this industry. In its report and recommendations to the PostmasterGeneral on applications for commercial television licences in provincial and country areas in 1960, the Board said -

It was put to us during the inquiry that the development of associations or networks of stations will become an integral part of television services in Australia and that the Board should at this stage, for the purpose of preventing the development of undesirable practices in respect of network operations, exercise its powers under section 16 (3.) of the Broadcasting and Television Acts to regulate the establishment and operation of networks.

That was the submission made to the Board at the time of the applications for licences. The Board came to this conclusion -

That rules to regulate the establishment and operation of networks are not necessary at present. For this purpose more information would be required as to actual proposals for the operation of country and provincial stations on a network basis, and this cannot be obtained until the licences are granted. However, each network arrangement should be subject to the approval of the Board and contain the essential conditions necessary to secure the independence of the member stations.

Apparently at that time the Board realised what a network was. In another place on 27th April last the Postmaster-General answered a question asked of him by Mr. Buchanan, relating to Austarama Television Pty. Ltd., holder of the licence of Channel O in Melbourne. Mr. Buchanan directed the attention of the PostmasterGeneral to the facts that in its application to the Broadcasting Control Board this company had promised a 58 per cent. Australian content in its programmes and that it was then barely achieving a 15 per cent. Australian content. He suggested that the station was not living up to the undertaking which it had given to the Broadcasting Control Board. In reply the Minister said -

The matter is constantly under inquiry and supervision by the Board and I hope that when other new stations in Sydney, Adelaide, Perth and Brisbane come into operation - the Sydney station has already commenced operation - the new network facilities will then enable the company referred to by the honorable member to carry out the obligations required of it by the Australian Broadcasting Control Board.

Some of the stations - namely, those of the Packer group in Sydney - refer to themselves as The National Television Network. " Network " is a common term in the industry, or it appears to be. It has been used by the Minister himself, by the Broadcasting Control Board and by licensees of commercial television stations. If the Minister now says it is difficult to define precisely what a network is, I will tell him some of the networks now operating nationally in this country. Firstly, there is the PackerMurdoch network which takes in TCN 9 Sydney, GTV 9 Melbourne, NWS Adelaide - a Murdoch station - and QTQ in Brisbane. There are Wollongong and Newcastle stations as well, connected with the Packer-Murdoch group.

Then there is the Channel 7 network, which seems to incorporate the Melbourne " Herald " group and the Fairfax group in Sydney. That network consists of ATN in Sydney, HSV in Melbourne, which is the Melbourne " Herald " station, ADS in Adelaide, which again, I understand, is a Melbourne " Herald " station, and BTQ in Brisbane. 1 also understand that the Melbourne " Herald " group has a very solid link with the Hobart station because of Sir John Williams' link with the Hobart " Mercury ".

The effect of this legislation, of course, will be to preserve the Packer, Murdoch, Fairfax and Williams network for all time, thus making it practically impossible for all others to operate competitively with them. Prior to 17th December last, dominating the main centres of population were 24 commercial television stations and 19 national television stations. Of those located in the State capital cities, 1 1 were commercial and six were national, No organisation, other than the wealthy, powerful and commercial interests, particularly those in the newspaper field, has really any influence in the control of television stations at all. As a member of the Senate Select Committee that inquired into and reported to this chamber Upon the encouragement of Australian productions for television, I was astounded to learn from the Australian Broadcasting Control Board that at that time, two years ago, no orders or directions had ever been given by the Board to any of these commercial television stations.

Senator Wright - Why does not the Board inquire into these companies before it issues a licence?

Senator MCCLELLAND - That is another matter that could well be opened up. The whole subject is one that is worthy of close consideration by the Parliament. The Australian Broadcasting Commission has a national network. It has one television station in every major centre.

In short, this legislation leaves two-thirds of the capital city stations completely in the hands of private commercial interests, particularly those engaged in newspaper ventures, hooked up in many cases with networks of broadcasting stations. One has seen day after day since 1960 this great medium of mass communication, along with other mediums, becoming controlled by a privileged few. I believe, as I am sure all honorable senators in this chamber believe, that this certainly is not in the interests of a healthy democracy. But the difficulty is that whilst this legislation is intended to look into the future and to see that no breaches of Government policy occur in the future, it is giving, in effect, so far as the Government is concerned, laissez-faire to those who have operated in this industry in the past.

I suggest that the lofty attempt of the Government to control this most powerful form of mass communication has been a complete and abject failure. The Government's alleged policy to encourage Australia productions to raise the standards of programmes and to present programmes of reasonable intelligence and social values certainly has not been implemented. Although the Australian Broadcasting Control Board might not like to say so, that situation certainly is highlighted by the annual reports of the Board year after yeal.

The Government so far has completely ignored the recommendations of an all party Senate Select Committee which dealt with this matter of Australian programmes for about 12 months in 1963. Although the report of that Committee was presented to the Parliament in October 1963, we find on pursuing the notice paper that the debate has not yet been concluded.

Commercial licensees year after year are allowed to break all the rules laid down by the Broadcasting Control Board, in complete disregard of the requirements of the Board and of the stated policy of the Government, and certainly against the best interests of the general public. We of the Opposition believe that this industry should be completely investigated by a Senate select committee, such as has been suggested in the amendment that I have moved. If this proposal is rejected, we of the Opposition certainly will move in the Committee stage to date this legislation retrospectively to a time when all operators, present and future, will be roped in by the Bill now before the Senate. 1 believe that it is in the interests of the Parliament and of the people of Australia to have a general inquiry into the ownership and control of these stations. We have already had a Select Committee inquire into programmes. I am sure that honorable senators on the Government side who were members of that Committee will agree with me that even in the limited and restrictive field in which we operated over a period of 12 months, serious deficiencies and anomalies were thrown up to us.

A gentleman named Lee De Forest, the inventor of the Audion tube which was the main technical element of radio, on the occasion of the 40th anniversary of its discovery, in a letter to the American National Association of Broadcasters wrote something which is certainly pertinent to the television industry of Australia today. He wrote -

What have you gentlemen done to my child? He was conceived as a potent instrument for culture, fine music, the uplifting of America's mass intelligence. You have deposed this child, you have sent him out onto the streets to collect money from all and sundry. You have made him the laughing slock of intelligence, surely a stench in the nostrils of the gods of the ionosphere.

I suggest that those remarks are very apt to the television industry in Australia today because of the negligence of this Govern ment to cater for the welfare and wellbeing of Australians generally and because the vested interests, which have been given licences by the Government to control this industry, are controlling it in their own interests and not in the interests of the Australian public.

Australians generally can ask the same question about their television industry as Lee De Forest asked the Americans about the radio industry. I believe that if they ask the question they certainly will receive the same answer. I suggest that the amendment to establish a select committee of this Senate is in the interests of this nation and certainly in the interests of the Parliament. I commend the amendment to the Senate.

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