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Monday, 27 February 2012
Page: 801

Senator LUDLAM (Western Australia) (15:39): I present the explanatory memorandum and 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—

I am pleased to introduce this bill which seeks to reverse the commercialisation of SBS.

Established in the 1970s, our second national broadcaster was the first multicultural broadcaster in the world. Australia's relative success as a multicultural society is owed in part to institutions such as SBS which tell the stories of our cultural diversity and reflect a uniquely Australian experience back to those who have made a home here.

From the outset, SBS was a publicly funded broadcaster and advertising was not permitted. It wasn't until the Special Broadcasting Service Act of 1991 that advertising was permitted during periods before programs commence, after programs end or during natural program breaks for a maximum of five minutes.

Over 7 million viewers and listeners who enjoy SBS in 60 languages per week have consistently lamented that their news, drama, sport and content that portrays and appreciates our multicultural society is interrupted by advertising

In 2007, due to financial pressures the station moved - arguable in contradiction of its Act, in spirit if not in letter - to full in-program advertising. This has degraded the SBS viewing experience. As long as advertising revenues continue to rise, the danger is that successive Governments could get away with the structural under-funding of the station.

This Bill seeks to wind back this trend so that SBS enjoys adequate funding to take full advantage of the education, employment and creative opportunities provided by digital multi-channeling and the NBN.

Considering it operates on less than a quarter of the budget of the ABC, SBS provides an extraordinary service of which we can all be proud. However, the troubled history of its hybrid funding model has reached a dangerous new stage.

Senators will be aware that this is the second iteration of a bill to remove advertising during programs from SBS. In the first iteration, I did not deprive SBS from revenues from advertising per se, rather I simply proposed the abolition of advertising on SBS during 'natural program breaks', in other words, restricting advertising to before and after programs.

Schedule 1 of this new bill clarifies the definition of 'natural program break' to bring advertising practices at the station back into line with the Parliament's original intention when debating the Special Broadcasting Service Act (1991).

Schedule 2 of the bill proposes a staged approach in which a proportion of additional funding in the forthcoming triennium will be set aside to retire advertising. How much is retired is at the discretion of station management. The bill proposes to allow the Minister by regulation to set aside a proportion of SBS funding for this purpose. In this sense the bill does not appropriate funds, it merely sets up a scheme whereby the station can use a proportion of future funding increases to wind back advertising that runs during programs.

Schedule 3 of the bill holds that by the funding triennium after the one commencing in 2012, advertising within programs will have been phased out altogether.

SBS radio will not be affected by this Bill .

The Greens are on the record as supporting an increasing in base funding to support the health of the station and to reduce the amount of television advertising it carries. The 2012-15 triennial funding round provides an opportunity to reset the course of SBS and cement its position as one of Australia's most important cultural assets.

Competitive pressures have now sharpened with the introduction of digital multi-channels, cannibalising advertising revenues and bidding up the price of appealing content. Since FY 09-10, advertising revenue growth rates have stagnated and are predicted to fall steeply into decline as highly profitable commercial broadcasters with thousands of hours of airtime to fill hoover up all available content and heavily dilute the value of advertising.

Ironically, the arrival of the commercial multi-channels was smoothed with a surprisingly generous public subsidy to the tune of $250m in waived licence fees for two years.

The Australian Greens believe it is essential in the next funding triennium to reverse the tide of commercialisation, before declining advertising revenues and rising viewer discontent force a crisis on the broadcaster. In addition, to thrive in an increasingly crowded and converging media market, SBS requires an injection of funds above and beyond that sufficient to end in-program advertising.

Analysis of answers requested at successive budget estimates sessions reveal that additional public funding of $45 million per year would be required to achieve this (see answer to Question 60 from Budget Estimates Hearings May 2011). This estimate is difficult to verify and does not necessarily model the increased 'scarcity value' of more restricted advertising timeslots at the top and tail of programs.

Withdrawing advertising could be achieved in a phased manner across the triennium, allowing the station in the short term to use the funding increase to address urgent priorities including first-run Australian content, expanded online services and an expanded slate of Aboriginal content through a proposed tie-up with NITV.

In framing this Bill, great regard has been given to do so in a manner that does not harm SBS. The Bill does not direct SBS to stop placing advertisements in television programs. It merely provides station management with an option to do that in exchange for monies already appropriated by the Parliament for SBS. If SBS exercise that option, it would be akin to the government buying out all the breaks in a program, while still allowing the station to top and tail programs with advertisements.

The challenge in putting this Bill together, was to make it workable in a tight funding situation, without tying the hands either of Government or of station management. In the event that SBS receives a substantial increase in their funding, which we hope is the case, the station will be required to use a portion of this funding increase to retire advertising during in-program breaks .

The Bill has been constructed to avoid a heavy handed approach. It's an attempt to achieve an outcome that will meet community expectations while allowing maximum flexibility. I commend it to the chamber.

Debate adjourned.