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Monday, 7 November 2016
Page: 2015

Senator FIERRAVANTI-WELLS (New South WalesMinister for International Development and the Pacific) (17:15): I move:

That this bill be now read a second time.

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

Leave granted.

The speech read as follows—


The Broadcasting Legislation Amendment (Television and Radio Licence Fees) Bill 2016 will implement a 25 per cent reduction in the licence fees payable by the commercial television and radio broadcasters by amending the Television Licence Fees Act 1964 and the Radio Licence Fees Act 1964 .

Commercial television broadcasters are the largest funders of Australian content and remain a key source of news for Australians. The reduction in broadcasting licence fees contained in this Bill will allow commercial broadcasters to effectively meet the challenges of an increasingly competitive global environment and continue to invest in high quality content.

The Government's decision to reduce the fees recognises that the Australian media market has changed significantly since broadcasting licence fees were first introduced. In the current media environment, the move to online and on-demand content is fragmenting the market for media services and increasing competition for audiences and advertising dollars. In turn, this is placing increasing financial pressure on Australia's commercial broadcasters whose main competitors, including online operators such as Netflix and Apple, pay no licence fees.

Commercial television and radio broadcasters are required to pay broadcasting licence fees, which are levied as a sliding percentage of their gross earnings. The formulas for calculating the relevant percentages are set out in the Television Licence Fees Act 1964 and the Radio Licence Fees Act 1964.

In relation to television, the maximum rate of licence fees payable is 4.5 per cent of gross earnings applicable to licensees with earnings in excess of $100 million. The current rate of television licence fees was set following an amendment to the Television Licence Fees Act 1964 in 2013, which provided a permanent 50 per cent reduction in commercial television licence fees.

In relation to radio, the maximum rate of licence fees payable is 3.25 per cent of gross earnings applicable to licensees with earnings in excess of $11.5 million. There have been no changes to the rate of radio licence fees since 1991.

The 2016-17 Budget included a measure to permanently reduce the rate of broadcasting licence fees by 25 per cent per annum, effective from the licence fees payable for the 2015-16 financial year. The Bill will give effect to this Budget measure by amending section 6 of the Television Licence Fees Act1964 and section 6 of the Radio Licence Fees Act 1964. These amendments will provide that commercial television and radio broadcasting licensees must pay a fee that is 75 per cent of the amount otherwise due to be paid for a given year.

The Bill will also introduce a measure to address an anomaly between the two licence fee Acts relating to the making of regulations. Subsection 5(2) of the Television Licence Fees Act 1964 specifies that regulation made by the Governor-General under section 8 of that Act may make provision for the rebate of licence fees. This rebate provision was introduced in 1987 to allow the Government to offer a rebate on television licence fees as a financial incentive for television licensees to meet the Government's desired policy outcome of television market aggregation.

However, the Radio Licence Fees Act 1964 does not permit regulations made under that Act to make provisions for rebates. The Bill will amend the Radio Licence Fees Act1964 to address this inconsistency, and provide flexibility in the future administration of the licence fee regime as it applies to commercial radio broadcasters.

The measures contained in this Bill will build on the Government's media reforms contained in the Broadcasting Legislation Amendment (Media Reform) Bill 2016, which will repeal redundant media control rules and enhance local content obligations on regional commercial television broadcasters.

The Australian public is best served by a strong and vibrant free-to-air commercial broadcasting sector. These reforms provide tax relief to assist Australian broadcasters so they can be better positioned to invest in Australian content and local jobs.

Debate adjourned.