Mr SMITH(5.05 p.m.) —-This is a resumption of debate on the Special Broadcasting Service Bill which was brought to the House a little while ago by the Government. I indicate on behalf of the coalition that we will be supporting the Bill but there will be some amendments which I understand were circulated in my name earlier in the day.

This is a very significant Bill, for many reasons. I will canvass some of those later on but, broadly speaking, the SBS, which was established some considerable time ago, on 1 January 1978, has always been administered under the Broadcasting and Television Act 1948. The current Prime Minister (Mr Hawke) made a commitment in July 1989 under the national multicultural Australia agenda that the SBS would be covered by its own Act, and this is what this proposal does. The Bill gives the SBS greater freedom to manage its own affairs. It provides a new charter for the SBS, making it a statutory authority with similar powers and operational structure to the ABC but, unlike the ABC Act, it allows limited sponsorship and advertising, which I will come to directly.

As I said, the SBS was established as an independent statutory authority by a coalition government back in January 1978 under the then Broadcasting and Television Amendment Act 1978 in response to a need by Australia's ethnic communities for a more comprehensive broadcasting service and to provide services not otherwise available through the national, commercial or public broadcasting sectors. The Act empowered the SBS to fund its operations by the broadcasting of sponsored programs, by charging for the provision of services and facilities and by the sale of programs and rights or interests in programs in addition to moneys appropriated annually from the Parliament. It was not, however, to derive revenue by means of normal commercial advertising, and therein lies a major change in this proposal. As I have indicated, the coalition will support the legislation but we do have some amendments which I will come to directly.

As I have said, the Bill establishes the SBS as a separate statutory authority. It defines the charter of the SBS to reflect its primary role as Australia's multicultural broadcaster, and sets out its structures, powers and responsibility. It allows the SBS to borrow money from the Commonwealth or other sources with ministerial approval and confers powers to enter into hedging contracts and to invest surplus funds subject to the Treasurer's approval. It enables the SBS to generate off-Budget revenue through permitted business activities and gives the SBS the opportunity to increase revenues through advertising and sponsorship. The board is required to develop and publish guidelines on advertising and sponsorship announcements.

The Bill increases the size of the SBS board from seven to nine. It states in the Bill that at least one of those new board members ought to have an appropriate understanding of the interests of employees. Only the managing director will be a full time member. I would have thought that all board members ought to have an appropriate understanding of the interests of its employees. Whilst I can understand the rationale, from the Government's point of view, of wanting to so nominate such a director, I think that each and every member of the board should have the welfare of its employees as a pre-eminent concern. To dress up the Act, as has been done, so as to have a union representative formally on the board is unnecessary, in my view, but we will not be moving an amendment to delete it.

The Bill contains provisions setting out the duties of the board of directors and the managing director and provides for their appointments, remuneration and leave arrangements. It empowers the SBS to engage staff in accordance with terms and conditions determined by the SBS, with the provision that they be developed in full consultation with the unions and that they adhere to the Government's policies on industrial relations matters.

I might just say in passing that the problems that arm's length GBEs and government instrumentalities have in meeting all of the requirements of the Federal Department of Industrial Relations have been exhibited more recently in regard to Telecom, where I understand there have been great difficulties in determining arrangements for employment and, of course, redundancy. We have to be careful, when saying to these bodies that they should act in a commercial way, that we do not restrain them with the limitations imposed by the Department of Industrial Relations. I think there is ample evidence of that. Certainly, having talked to some of the GBE managers, I can say that they are frustrated quite often with the role that the Department plays vis-a-vis the charge to manage effectively and commercially that which they are supposed to proceed with.

The Bill also requires the Board to develop and publicise the SBS's programming policies and its policies on handling complaints. The Board is to describe the consultative mechanisms for gauging community needs and opinions in the corporate plan and, in the first instance, to establish an interim community advisory committee, which I will come to later. I might just add with regard to complaints that the Minister for Transport and Communications (Mr Beazley) indicated in his second reading speech that the Government was looking in detail at what it was going to do with regard to public accountability arrangements for both the SBS and the ABC. He indicated that the Government would be making some decisions about how complaints might be handled and whether or not that would be an appropriate role for an external body such as the office of the Ombudsman--which I think would be a sensible and the most appropriate route for thorough investigation--and the Australian Broadcasting Tribunal. We wait with interest to see what the Government will do with regard to that matter. Certainly the Gulf crisis brought to a head the whole question of how we deal with public accountability with regard to the broadcasting media funded by the Government, those being the ABC and the SBS.

The financial impact on the Commonwealth expenditure is neutral, although I did notice the other day that a motion came before the Parliament to refer to the Parliamentary Standing Committee on Public Works an application for $35m to purchase and refurbish a new headquarters for the SBS. It is currently in leased premises. That $35m is equal to 50 per cent of the total Budget allocation for the SBS. Whilst I recognise that that move is necessary, I hope that it is being done on the basis that there will be greater economies in the longer term. Indeed, as I recall, there was some excess capacity in that building which would probably generate some revenue for the SBS as well.

Broadly, the Opposition has been very happy and satisfied with how the SBS has been run. I can truthfully say that in the short time that I have held the position of shadow Minister for communications, I have been very impressed with the way that it has conducted its programming and, more particularly, its commercial operations. It is very conscious of its budget limitations and it is always striving to deliver programming that is relevant to its target audience. I think that those who enjoy the SBS applaud what they are able to see. One will always have difficulties at the margin--and do we not have them in every sphere--but certainly SBS is doing a very good job and it needs to be congratulated in that regard. Indeed, we have great hopes for SBS in the future. Whether it remains in government ownership, of course, remains to be seen in the longer term. In any event, as it becomes more commercial, it is certainly exhibiting its capacity to do so.

I might say that not all Australians enjoy SBS. That is a real sadness. Some regional areas have been denied the facility to watch SBS. As I sit in my own electorate and know that the SBS signal flies past and goes down to Hobart, I often wonder why it is that the people of northern Tasmania--Tasmania being the most decentralised State in the Commonwealth--are denied the services of SBS. I hope that one day that will be corrected. I certainly think that the timetable that has been announced for the provision of SBS services to regional areas needs to be considered regularly, and we need to keep the pressure on for the delivery of SBS. I know that in my own area there is a great sadness that we do not receive SBS, because we believe that the additional choice ought to be available to us, and, for a very modest outlay, SBS could have been made available to the whole northern area of Tasmania. But that is all tied up with the conversion from VHF to UHF and a whole range of other technical matters that it is not appropriate to raise here.

Coming back to the matter of the SBS's budget, in 1991 SBS had a total of $66.41m available from government, projected revenue of $3.7m and cash on hand at the year's start of $2.097m. Expenditure by functional areas was estimated at $12.24m for radio and $28m for television programming, plus $18.72m for infrastructure and publicity and $6.755m for the corporate area. In a 1988 policy discussion paper, the Department of Transport and Communications estimated that $70m would be necessary if SBS television was to incorporate local content in accordance with ABT requirements. The SBS has translated this to mean that $90m would now be needed to make a `proper effort in innovative, high quality, locally produced material'.

We now come to the crux of this issue, that is, sponsorship and advertising. Sponsorship has yielded modest results--$0.85m in 1990-91--and experience elsewhere in the world shows that it will never cover the cost of local production. Apart from news, current affairs and sport, SBS television currently has only some $4m to commit to Australian production initiatives. SBS estimates that advertising could yield $5m per annum in the early years, thus adding nearly 20 per cent to its television budget. Honourable members will recall that that is the largest part of its budget. Newspaper reports in June 1991 refer to papers before Cabinet suggesting that, based on a 2.5 per cent rating estimate--the current figure--and a total television advertising pool of $1.36 billion, some $30m could eventually be raised through advertising. This is disputed by advertising and media consultants Mitchell and Partners, who believe that SBS could expect between $10m and $15m advertising revenue a year. Media consultant George Patterson Pty Ltd calculates a potential revenue of $26m, based on an average rating point during one survey period of 1.3--that is, 11.2 for the three commercial channels--and advertising costs of $402 per second. This assumes that every spot is sold and that the network is fully booked every week--a somewhat unrealistic assumption.

So the advertising revenue that is being sought and will be permitted under this Bill is a significant change, and those revenue projections need to be kept in mind, because I do not believe that the revenue from advertising will be as great as some believe it will be.

Referring again to the charter, we have indicated, by our support for the Bill, that we do support the charter. But, clearly, I want to indicate that, in agreeing with the charter, we do not envisage a guarantee of continuing rapid increases, or indeed any increases, in funding for the SBS. I think it has to be accepted that public broadcasting has done reasonably well over recent years and that, with the economic constraints that confront all governments of whatever complexion, the rapid increase in funding is something of the past, certainly in the foreseeable future with the economic climate the way it is.

In terms of our current policy, we have a proud record of supporting the SBS. Indeed, at the time when it was mooted that the SBS be merged into the ABC it was this side of the House that said, `No, it should continue to be a distinct entity'.

Mr Ruddock —-Who wanted to get rid of SBS?

Mr SMITH —-I think it was the other side of the House. I am sure that the honourable member for Dundas will get the opportunity to tell honourable members opposite in chapter and verse what a folly that was. In any event, we have always taken the view that SBS has established a sound reputation as a lean and efficient organisation providing a highly regarded service to viewers and listeners extending well beyond the initial client audience of the ethnic communities. It has justifiable pride in cost efficient performance and values its independence. It has, in the process, made an important contribution to the enrichment of Australian culture. The coalition parties will maintain it as a separate entity and support its continued development and access, within the confines of economic restraints.

Its principal function, of course, is to provide multilingual and multicultural radio and television services which inform, educate and entertain all Australians and, in so doing, reflect Australia's multicultural society. The charter, as such, is not contrary to anything that we state in our ethnic affairs policy.

I come to the matter of advertising and sponsorship. The relevant part is clause 45, subclause (2) of which stipulates that advertisements or sponsorship announcements may be broadcast only between programs or during natural program breaks and restricts them to a maximum of five minutes in any 60 minutes of broadcasting. The commercial equivalent is 12 to 13 minutes under a self-regulation regime. There is no definition of natural program breaks, but the SBS provides an example of such as being the half-time in a soccer match. So in effect what will happen is that advertising will top and tail programs, but it will be broader advertising than under the existing guidelines, which were ministerial guidelines, which provide a limitation on what can be shown by way of advertisement.

I indicated in my earlier press releases, and I do so again by way of the amendments circulated, that I believe that the guidelines that are to be developed by the board under subclause 45(4) ought to be subject to the Acts Interpretation Act so that they become a disallowable instrument. It would be appropriate, given the concern and the major change that is taking place in permitting advertising, that there be some ongoing parliamentary scrutiny. I do not envisage that that would be intrusive in any way but I believe that it would be appropriate for that to take place.

There are many arguments about whether or not there should be advertising and the extent of advertising. Some have put forward views that it ought to be limited to sponsorship or a form of underwriting. But in any event the two major parties have now decided that we will proceed down this path and advertising in the generally accepted form or meaning of the term is to be appropriate for the Bill. I indicate that there was some concern that the interpretation of the second reading speech led to the view that the advertising would not be required to adhere to the Australian Broadcasting Tribunal's standards and industry codes and rules. I am grateful to the SBS for providing me with a letter today clarifying that matter. It clearly is to be the case that it will be treated just like any commercial advertiser. I am sure that that gives some relief to the other commercial advertisers, but also it makes it quite clear that the advertising that we talk about is the normal commercial advertising that will appear on the SBS. I will move that amendment at the committee stage.

I come back to some of the issues regarding advertising because they are particularly significant. The SBS has argued for advertising to help to fill the gap between the funding it gets and what it wants to do. What it wants to do is to offer a double benefit to the SBS and Australia as a whole--accessible and relevant programming that will lead to greater audiences. The SBS claims that it will give a major boost to the creative and cultural well-being of this country and that every dollar that SBS puts towards Australian production has a potential to draw another $3. Admirable though that be, that remains to be seen. I have the view that the revenue that it intends to generate will not be as high as it thinks. But, if one of the consequences of going down this path is to provide greater Australian production, that certainly would be welcomed by me and the Party that I represent.

The SBS claims that it is `a long way towards achieving our multicultural objective of a service to all Australians'. I have made a comment about that already. I point out that there are some concerns that, with the SBS pursuing advertising, we will see fewer programs covering the multilanguage groups and that we will see more English groups as it compromises on seeking advertising. That is a fear that has been expressed. It remains to be seen whether it will be fulfilled, but it is certainly something that the SBS has indicated that it is aware of and will be addressing in the programming and advertising arrangements that it puts forward.

The SBS also maintains that limited advertising opens up much wider potential than sponsorship, which generally has limited runs, which operated under the ministerial guidelines. Apart from the limits on advertising imposed by the legislation, SBS also points to the limit imposed by its audience reach of 75 per cent of the population, which is further limited to 68 per cent of homes that receive a viewable picture from its UHF transmission. SBS states that it will not seek regional and local retail advertising. So it will be a national advertising target.

I want to talk more about the advertising issue, but I think time will be against me. It is important to mention some of those issues on the contrary side--whether or not advertising will threaten the independence and integrity of SBS. Those matters were considered carefully by us, as was whether or not its quality would be compromised; whether or not the legislation lays the groundwork for further commercialisation--the SBS has been somewhat mediocre in how it has handled that; and whether, once advertising is accepted, the pressure will be on to raise greater and greater percentages of its budget that way. Those are all legitimate concerns and it remains to be seen whether those fears will be fulfilled.

A further point was made that, having established the principle that the SBS will be able to advertise, what will happen with the ABC. We now have a contradictory policy in a sense. We are saying to the SBS that it can advertise in the full commercial sense but with a limitation of 5 minutes per hour; yet recent decisions with regard to the ABC went 100 per cent in the other direction. Of course, many take the view that we should be consistent with both. It will be interesting to see what will happen ultimately with the ABC and advertising.

I have indicated already on behalf of the coalition that I believe that sponsorship in the form that we know it at present is appropriate for the ABC and ought to be continued. I refer to things such as the Esso Night at the Opera, the NEC marathon and so on. But we certainly have a contradictory policy at present with regard to how that might be implemented.

One of the other points that were raised with me is that it will reduce the funding base of ethnic print media. Depending on what happens with cross-media ownership rules in this country in the longer term, perhaps the ethnic print media will be able to take a position at some future time in the broadcasting facility provided by the SBS. I do not believe that that will cause great concern for them in terms of their revenue.

I raised the matter of the application of ABT standards and commercial codes to the SBS and the SBS has indicated to me today that it certainly would meet those codes. I welcome that.

Of course, there are some other issues that I ought to raise with regard to the amendments that I have proposed. They relate primarily to the corporate plan. Under the proposals in the Bill, the corporate plan is not subject to any overall ministerial review other than in a very limited form. The only express power given to the Minister to vary the corporate plan relates to the community consultative arrangements. My amendments change that to give the Minister, under clause 49, a power to vary the corporate plan. There may be an argument that the Minister's very wide powers under clause 11 could be used to alter other parts of the corporate plan. Clause 11(1) states that the Minister may give to the board such written directions in relation to the performance of the SBS's functions as appear to the Minister to be necessary in the public interest. The corporate plan could easily be covered by this clause, but the Minister may only give the directions for prescribed matters or in prescribed circumstances. Prescribed matters may be prescribed only by regulation which means that they may be disallowed by Parliament. No regulations have been formulated yet and the Department envisages doing so only when, or if, the Minister requires it.

The ABC does not have to submit its corporate plan to the Minister, although it does do so. There is no obligation under its Act. However, it is understood that the Minister wrote to the ABC earlier this year saying that he might like to alter the ABC's Act to include a corporate plan requirement. Clause 50 does appear to be a standard in corporate plans, but in my view Telecom Australia has similar requirements to clause 50, as does the Australian Postal Commission. Given that the Minister has already indicated to the ABC that he wants an ability to review its corporate plan, I will assist him by moving the amendments to the Bill, and I hope that the Government will support them. I envisage that a Minister, in reviewing a corporate plan, would be reviewing it in terms of its commercial content and not entering into any arrangements with regard to programming, which is truly a function of those in charge of managing an organisation, and their independence to do so needs to be assured.

The other matter I want to raise before concluding my remarks is the Community Advisory Committee, which I understand is a somewhat contentious matter. I have had representations from the ethnic community wanting to have some longer term input into the programming arrangements. With all the furore that we saw over changes in the programming for radio, I think this matter has heightened their concern.

In passing, I welcome a remark of the Minister, as reported in the Age today, that a second frequency for the SBS, at least in capital cities, will be considered. Whilst he cannot guarantee funding, he has indicated that he does now at least agree with us that this might be a solution to the problem of meeting the community's needs. Whilst I am unable to say yes, we support it--I have been asking for a long time for some costing details--in principle, it would seem to be a possibility.

I also mention in passing that if it means that the broadcasting of Parliament is to be in any way compromised in trying to meet the needs of the new SBS signal that the Minister is proposing, I think the Parliament needs to be very cognisant of that issue, which relates to the power of transmitters, the fact that we are on half power now and that it was envisaged that we would get the additional vacant capacity. It would now seem that that might be going to SBS in Sydney and Melbourne, but I am sure that the Minister--and indeed, the Speaker--will give details of those proposals.

I come back to the community advisory process. Under the Bill, an interim advisory committee is established for the purposes of assisting SBS in the formulation of its first corporate plan, and then it becomes disbanded. It is a matter of judgment, but I take the view that the involvement of the community in an active, ongoing way, with all the problems that generally brings from time to time, is a preferable route to take than establishing something and then saying, `No, we don't want you any more'. I think a small advisory committee of people on the board to work in an ad hoc advisory role would give comfort to those who watch and listen to the SBS. I think it would be a positive thing to do. It would signal to the audience that they do have an input into the SBS and the running of it in a positive form other than having an input only to the board. In that sense, we will be moving the amendments. I am not sure what the Government's response will be with regard to that--I do not even know what the Australian Democrats' response will be--but in the circumstances it would seem to be a reasonable proposal.

One of the other amendments that I will be moving deletes a clause which exempts the SBS from paying sales tax. I think the SBS is becoming more and more commercial. If it is given the ability to enter into advertising arrangements, I think we should take the necessary steps to impact upon its management. It is entering into a commercial environment and, therefore, I think the exemption from sales tax ought to be removed and there should, accordingly, be a proposed amendment.

I again point out that we support the legislation. We accept the charter and the limitation on advertising that is proposed in the legislation--that is a very significant change. There is now a contradictory approach to the ABC and the SBS, which is a matter for the Government to determine or at least justify. The amendments that I will be moving relate primarily to setting up an advisory board which requires the advertising guidelines to be subject to parliamentary scrutiny by making it a disallowable document and requiring or allowing a Minister to overview the corporate plan. The concept of the corporate plan is very important.

In the recent annual report, the mention of the discussions with staff about the development of the corporate plan gives one a great deal of confidence in the ability of the SBS to develop that. So the intervention of the Minister, I would imagine, would be minimal, if not nil. Finally, if the SBS is going to be commercial, it ought to pay sales tax as do other GBEs. The other matter I mentioned during my remarks was that there is a special reference made to a board member who must have as a concern the interests of employees. I hope that all board members of all GBEs would not need that type of reference in an Act; that they would have as a pre-eminent concern not only the market they are serving but also the welfare and concern of their employees.

Mr DEPUTY SPEAKER (Mr Dubois) —-The Chair understands that the amendments will be formally moved in the committee stage.