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Environment and Communications Legislation Committee
30/05/2013
Estimates
BROADBAND, COMMUNICATIONS AND THE DIGITAL ECONOMY PORTFOLIO
Special Broadcasting Service Corporation

Special Broadcasting Service Corporation

[10:00]

CHAIR: I now call officers from the Special Broadcasting Service. Mr Ebeid, would you like to make an opening statement?

Mr Ebeid : Just a brief one. Given that we have just been through the federal budget, I just want to say that SBS is very grateful for the support of the government and the minister through our triennial funding bid. SBS received a $20 million increase over the next three years, which will assist us in maintaining the services we have and, hopefully, better meeting our charter. We are still obviously a long way short of what we would like, but, given the environment of the budget at the moment, we recognise the difficulties that the government would have had and are very appreciative of the increase. Also, since the last committee hearing SBS has now fully implemented the radio schedule review, which has resulted in new languages being added. We have now implemented it, as at 29 April, and it has gone reasonably well. We are now broadcasting in 74 languages across three networks: two on analog and one on digital. So far, it has been going really well and has been received well by the majority of our communities that we serve. That is all for the opening statement; I welcome questions.

Senator BIRMINGHAM: I welcome officials. Could I start with that additional funding and the $10 million that SBS has received over five years to meet increased costs of acquiring local content. How much of this will be spent on in-house production and how much will be used to commission content?

Mr Ebeid : Local content is something we are constantly talking to the government about. We are hoping to get more funds for Australian content. That money that was given to us for this year is only $1 million in this year. It is, as you say, spread over five years. It is not allocated to any one program; it has just gone into our general commissioning budget. We have increased the overall budget by several million dollars this year, mostly because of the funding increase we received in last year's federal budget. So it is not tied or allocated to any one program.

Senator BIRMINGHAM: To what extent does SBS TV commission content versus engage in in-house production? Do you do any significant levels of in-house production outside of news and current affairs?

Mr Ebeid : Outside of news and current affairs, we have basically one program, which is Destination Flavour, a food program. We obviously have our sports programs as well. They are all in-house productions. So I would say that the large majority of all our documentaries and drama et cetera is commissioned with the independent production sector.

Senator BIRMINGHAM: Is it envisaged that any of this $10 million in funding will be able to be invested in new content, or will it simply be used to maintain existing content commitments?

Mr Ebeid : As I say, it is $1 million this year and $1½ million next year, so it is not a lot of money. It would be half a drama series, for example. So it is adding to our content budget; it is not going to a specific program.

Senator BIRMINGHAM: Do you believe that there will be any capacity to increase the level of domestic production activity that SBS undertakes as a result of this, or will it simply maintain existing operations?

Mr Ebeid : Overall this year we will increase the number of hours that we are producing for Australian content; so I guess the answer to your question is that it will increase the overall pot. Most of that is also as a direct result of the increased funding we received in last year's federal budget. So, between the two funds we got—that $10 million and last year's money—overall SBS is increasing the amount of Australian production and content this year, and indeed next year as well. We have a lot of things on the slate at the moment that will be delivered next year as a result of this money.

Senator BIRMINGHAM: Is any of this funding likely to see its way into NITV, or is that operating largely under a separate budget allocation?

Mr Ebeid : That is operating on a completely separate budget, yes.

Senator BIRMINGHAM: You also received funding for an undisclosed amount to increase terrestrial coverage of television services to an additional 39 regional areas and to convert up to 54 self-help television transmission sites. Are you able to provide us with a list of sites that you are upgrading?

Mr Ebeid : Not at the moment. We are currently still in discussions with our service provider, Broadcast Australia, on those sites. We hope to be able to make an announcement about that soon. We are currently still in discussions with them about which sites, how many and the timetable of when. All that will be announced in due course. The minister will probably announce that in the coming two months.

Senator BIRMINGHAM: Can I be clear there, in terms of ongoing discussions with Broadcast Australia about that delivery? The budget papers are fairly specific in their advice that this is funding to an additional 39 areas in regional Australia, ensuring that viewers in these areas will be able to receive the full range of free-to-air digital multichannels. Funding will also be provided to convert up to 54 self-help television transmission services currently managed and paid for by local community. I will accept that the 54 is an 'up to', so there might still be some room for negotiation—although it would still suggest that there is obviously 54 that have been identified fairly specifically; that is a pretty specific number. It is very clear and fixed in the language in the budget papers that it is an additional 39 areas in regional Australia. Do you know specifically what all of the 39 areas and all of the 54 areas in the budget papers are; and is there a reason why that cannot be shared with the public now?

Mr Ebeid : As I have said, we are still in discussions and negotiations with BA on that. We are trying to increase that, as you rightly point out. We are trying to increase that and discuss that with BA to get the best outcome for Australians. We know roughly, as you suggest, the areas. But within those areas we are still working out which towns and which communities are going to be serviced. So we are trying to maximise that as much as possible, which is why we have not announced it yet.

Senator BIRMINGHAM: Is there a timetable for when those sites are due to be upgraded?

Mr Ebeid : That is also part of the discussions we are having with BA. So that will be part of the announcement and the timetable.

Senator BIRMINGHAM: The estimates—in terms of not publishing the budget figures—do not publish them for each of the forward years, so there are four years worth of 'not for publication' notes. So this is at least a four-year exercise to cover off on these 39 and 54 different transmissions? Is it four years or longer?

Mr Ebeid : I think it would be, hopefully, significantly shorter than that. The hope is that we would be doing it in the next 12 to 18 months. That is part of the discussions we are having with them, to do it as fast as possible, particularly as we switch to digital. The intention is that as many as possible of the homes that are not receiving SBS services today do receive them going forward.

Senator BIRMINGHAM: But the funding profile then is longer because additional recurrent costs come with having additional broadcasts.

Mr Ebeid : Absolutely. So the money is recurrent cost for the maintenance of those sites and of those services. But that does not mean that they will not be rolled out until years 3 or 4; we want to roll out all those services in the next 12 to 18 months.Senator BIRMINGHAM: I know these things are always subject to commercial discussions; but for an average broadcast tower, if there is such a thing, are you able to give us what the annual operating maintenance type cost is? What does it cost to have ABC and SBS broadcasting out of one additional tower around Australia each year?

Mr Ebeid : I will happily take that on notice and get those figures to you, but I could not tell you off the top of my head. From what I have seen, those figures do vary greatly, depending on the remoteness of the sites to larger towns and whether those sites are manned or unmanned et cetera. They really do vary from town to town and site to site.

Senator BIRMINGHAM: Thank you. I have other questions, Chair.

CHAIR: Senator Abetz.

Senator ABETZ: I will be brief because I understand that Senator Cameron has a bracket of questions as to why you are not appointing a fact checker.

Mr Ebeid : If the minister would like to give me $60 million, I would be happy to have a department; but we will not go there.

CHAIR: Mr Ebeid, do not go there.

Mr Ebeid : No.

Senator ABETZ: Can I ask about the answer that was provided to me to question No. 2545. It relates to the previous answer I got to question No. 2165, which relates to the unhappy Dateline program.

Senator Conroy: Again?

Senator ABETZ: We canvassed that, you may recall, on the last occasion.

Senator Conroy: We canvassed that the time before and the time before that.

Senator ABETZ: We got the indication in the written answer to question No. 2165, at the bottom of the answer to question 2: 'Dateline apologises to Hydro Tasmania and to Ta Ann Tasmania for these inaccuracies.' I then asked how many complaints had been received, and we were told there were two and two apologies. Yet, when I asked again, I was told that it was Hydro Tasmania, Ta Ann Tasmania and Sarawak Energy Berhad. Have we apologised to Sarawak Energy Berhad as well?

Mr Ebeid : I believe we have, yes. I think the apology was, in general, to the three—

Senator ABETZ: No, it was not: 'Dateline apologises to Hydro Tasmania and to Ta Ann Tasmania for these inaccuracies.' You specifically mentioned two—not mentioning the third. At all times we had been told that two formal complaints had been dealt with. It is quite clear that there were three. All I want to check up on is that the third one has, in fact, been apologised to.

Mr Ebeid : If you give me one second—

Senator ABETZ: Or do you say that their complaint was not a formal complaint? If so, what is the difference between a 'complaint' and a 'formal complaint'?

Mr Ebeid : A formal complaint is when the complainant refers to our codes—that we have actually breached our codes—and an informal complaint is one where they are just unhappy about something that is not necessarily breaching our codes.

Senator ABETZ: So, when I ask about 'complaints' and you answer 'formal complaints'—

Mr Ebeid : There is a difference.

Senator ABETZ: Yes, to the unsuspecting punter. I would have thought, for transparency and accuracy, you might have told us upfront that there were, in fact, three complaints and then three apologies. I just wonder why I had to find this out by asking further questions. I fully accept that mistakes and oversights occur. But, when you do realise that two becomes three, is there not a duty to then inform the committee as soon as possible that there was this error?

Mr Ebeid : I am just looking at my notes of the time line; I think that the letter we received from the Sarawak Energy board came in after we spoke at the October Senate estimates. So, at that point, it would have been two.

Senator ABETZ: Right.

Mr Ebeid : I will confirm that that was the case.

Senator ABETZ: That is a very fair explanation—

Mr Ebeid : I am just looking at the time line.

Senator ABETZ: At the time, there was the view that all three had been hardly done by. But take it on notice. If that complaint came in afterwards, that is more than fair enough, and fully understandable.

Mr Ebeid : I do have in my time line that we also definitely responded to the letters for Sarawak, and that is right.

Senator ABETZ: Did you then put that up on your website?

Mr Ebeid : No, we have not done that. That is not normally our practice. But the reason we put up the letters for both Ta Ann and Hydro Tasmania is that they had published their letters of complaint on their website. Therefore, they had made them publicly available. Normally, complainants would be complaining in their letters to us and we would be treating those as confidential. So, unless we get their permission, we would not put their letters up.

Senator ABETZ: Turning to another topic, it has been asserted—and I do not put it any stronger than that—that SBS had a tape or film of the then Mufti of Australia praising suicide bombers. This was in his mosque. Then, after the September 11th attacks, SBS destroyed the tapes. The chances are that you would not know anything about it, but I do ask you on notice but also publicly to ascertain whether that actually occurred.

Senator Conroy: Is this in 2001? Michael was not at the company in 2001.

Senator ABETZ: No. If so, why they were destroyed? Did it ever enter anybody's mind that that sort of film might be fairly important potentially evidentiary-wise?

Mr Ebeid : I would be more than happy to look at it. I do find it very far fetched. We do not—

Senator ABETZ: Let us hope so.

Mr Ebeid : Yes. I do find it far fetched, but I would be very happy to look into it, if we can actually find anything out going back that far.

Senator ABETZ: If you can and, if you cannot, let us know and I will go back to the source.

Mr Ebeid : In fact, even our news director was not around back then; so it might be difficult.

Senator ABETZ: I accept what you are saying. I would be interested to ascertain the veracity of that assertion.

Mr Ebeid : If you do have any details, I would be happy to get them from you off-line and I can follow them up, if I have them.

Senator ABETZ: Yes, I do, in fact. I will pass that on to your good government affairs adviser, indeed.

Mr Ebeid : I would be happy to.

Senator Conroy: He was not at SBS at the time.

Senator ABETZ: Nor was he at the time.

Senator Conroy: No.

Senator ABETZ: Thank you.

CHAIR: Senator Birmingham, do you want to continue your line of questioning?

Senator BIRMINGHAM: I have other issues. I am happy to go to other issues. If you want to share the time around, I will give somebody else the chance as well.

CHAIR: Let us finish off this one and then we will move to Senator Ludlam.

Senator BIRMINGHAM: Could I go to answers to a couple of questions on notice relating to the extent of in-language broadcasting. Firstly, in relation to question on notice No. 151, the answer provided a detailed breakdown of the in-language broadcasts, both on radio and on television, and the different languages that the broadcasts occurred in. Firstly, on the radio platform, can you explain to us why it is that the NRN, the National Radio Network, as such, appears to have a significantly lower number of hours of in-language content broadcasts compared with the Melbourne or Sydney radio networks?

Mr Ebeid : I am sorry, can I have that question again?

Senator BIRMINGHAM: There is the table that is there that details the National Radio Network, Melbourne and Sydney. If you sum it all up, the totals show the National Radio Network broadcast 108 hours of in-language content—you did not put totals at the bottom, but we added it up—the Melbourne station, 220 hours; and the Sydney station, 220 hours.

Mr Ebeid : Yes.

Senator BIRMINGHAM: So why is it that Melbourne and Sydney are broadcasting more than twice as much in-language content as the National Radio Network is?

Mr Ebeid : I understand why you would be confused by that. I think, when you look at those three columns, you would be comparing apples, oranges and bananas because they are different networks, in that the NRN is effectively an AM service and Sydney and Melbourne are two FM services—so they are only metro based—whereas the national network is an AM national base. We repeat some of the hours, where we can, on the national network. But what we try to do is get a fill or a good representation of the various language programs on the national network for as many Australians to hear as possible. But our FM network is only available in Sydney and Melbourne and we do not have spectrum for the rest of the country. So what we try to do is share the content across the networks as much as possible to get the best outcome. So they are not additives, if you like.

Senator BIRMINGHAM: Perhaps you can tell me whether this table is telling me the figures are for one year or for more than one year or exactly what the 108 hours adds up to. When this table says that there is one hour of Armenian on the National Radio Network, is that one hour per week?

Mr Ebeid : Yes. That would be the same one hour that would be repeated across the Sydney, the Melbourne and the national networks at different times.

Senator BIRMINGHAM: So is 108 hours over the course of one week satisfactory, in terms of what the National Radio Network broadcasts in in-language services?

Mr Ebeid : We broadcast from 6 am to about 11 pm every day. So I am not sure what your concern is. We cannot squeeze more hours in the day. I am not sure what your concern is, to be honest.

Senator BIRMINGHAM: You can squeeze 220 hours of in-language content into the Melbourne and Sydney markets. They might be different stations but they still have the same number of hours in the day.

Mr Ebeid : No. In Sydney and Melbourne, as I have said, they are on the FM network and so they have unique content. Let me give you an example. Let us take, say, the Arabic program, which might have 14 hours a week on FM. But what we do is take one hour out of the two hours a day and repeat that on the national network. So you would only get one hour of Arabic on the AM network, where you would get two hours a day on the FM network. Does that make sense?

Senator BIRMINGHAM: It does. So the other hours on the AM network are filled with English language content?

Mr Ebeid : No, they are all in language. We do two hours a day of world news, radio news, one hour in the morning and one hour in the afternoon. That is two hours a day in language. The rest is all in language.

Senator BIRMINGHAM: Then the discrepancy in the number of hours broadcast in language does not make sense. If you have for the National Radio Network 108 hours broadcast in language, for the Melbourne FM station 220 hours broadcast in language and for the Sydney FM radio station 220 hours broadcast in language, how is it that the National Radio Network has half the number of hours broadcast in language across the week?

Mr Ebeid : I think I know what you are getting at now. I am going to need to take that on notice and have a look at these figures and see where the duplication is because I cannot answer that question now.

Senator BIRMINGHAM: If you could, thank you. I go to the television figures that have been provided. We got a breakdown over three years—2011­12, 2010-11 and 2009-10—in terms of the number of hours of in-language television content provided. There are a few that struck me as surprising as to the significant decline over that time, given their importance in a regional context.

Mr Ebeid : I am sorry, what page are you on now? Are you still on 151?

Senator BIRMINGHAM: Still the same question, 151, but the answer stretches over the remaining pages. You have provided three different tables, one for 2009-10, one for 2010-11 and one for 2011-12—

Mr Ebeid : Yes, I am with you.

Senator BIRMINGHAM: It sought to break down the languages and the hours of broadcast content. Cantonese, for example, has gone from 347 hours in 2009-10 to 328 hours in 2010-11 to 310 hours in 2011-12. Why is it that a language like Cantonese would be seeing a significant decline over that period of time?

Mr Ebeid : A lot of the in-language TV content would be made up of two things: firstly, the daily news bulletins that we bring in and, secondly, most of it would probably be film and drama that we would have. Each year it really also depends on the content that is available. Some of these countries have very good production industries; some do not. Some years they will produce good content that we will carry and in other years they may not have content that we have purchased, because of quality or availability. So it does vary from year to year. It is not that we try to maintain levels of language program year to year; it really does depend on what is available and what we purchase from each country.

Senator BIRMINGHAM: How about Indonesian, which has gone from 215 hours in 2009-10 to 156 hours in 2010-11 to 155 hours in 2011­12? Our nearest neighbour, a country with which we should be pursuing as close as possible ties, and we have seen a 25 per cent or more reduction in Indonesian broadcast content over the last two years.

Mr Ebeid : But, as you would also appreciate, over the past two years Australia has become far more complex in terms of the number of cultures that we need to serve. So we need to spread our hours across a lot more languages as well. We are finding that, as we move from year to year, more and more countries are developing their production facilities; they have more content and you will see that the number of languages has probably increased over that time as well. But I certainly cannot talk today about why we have increased one language over another. It would not be a specific policy or strategy that we are trying to drive there; it really comes down to quality content in each year and what is available.

Senator BIRMINGHAM: We have been around this before, I guess, as well. Given significant drops in languages like Indonesian and Cantonese, shouldn't we be sacrificing some English language content to maintain that in order to stay true to the SBS charter?

Mr Ebeid : I am sorry, you want more English language content, did you say?

Senator BIRMINGHAM: No. Shouldn't we be sacrificing some English language content to maintain hours of languages like Indonesian and Cantonese?

Mr Ebeid : We have a goal to maintain non-English language programs at about one-third of our schedule. Of course, the reason for a lot of that is that we do try to ensure that we are available for all Australians. Particularly in prime time, we ensure that all Australians can enjoy the SBS services. That is why, in prime time, we do tend to have more English language programs. I am just looking at our language broadcast here. Of the total number of hours, almost 50 per cent is English and 48, or49 per cent is non-English language programming across the whole network—just on SBS One—throughout the year.

Senator BIRMINGHAM: Has the board reviewed those targets, in terms of language content?

Mr Ebeid : We do regularly; yes, absolutely. We discuss it regularly at the board, particularly at the beginning of each year when we set out our goals. In fact, we are doing that right now for the next financial year—

Senator BIRMINGHAM: How at all have the targets for English content, as a proportion of SBS One's content, changed over the last few years?

Mr Ebeid : It has definitely decreased, I would say, over time, particularly in prime time, as we are doing more English language content to try to appeal to more Australians, to grow our audiences. One of our goals is clearly to grow our audiences. We have been doing that successfully by having broader appeal programs that actually touch on different cultures and appeal to broader audiences.

Senator BIRMINGHAM: How would you rate the goal of growing your audiences against the goals of providing a niche service to parts of the Australian community?

Mr Ebeid : I think it is about balance and I think we do that. As I say, if you look at last year on SBS 1, it was almost 50-50 across the whole schedule, which is, I think, a good number. On SBS 2 last year, 77 or 78 per cent was non-English language. I think that is a pretty good balance.

Could I just go back to Senator Birmingham's questions on the hours. I have just received a bit more information and I might be able to answer one of the questions about the hours. I neglected to say that the Melbourne and Sydney FM radio networks are actually two channels, where the national network is one. That is why there is a doubling of the hours on the Melbourne and Sydney network versus the AM national radio network. So it is actually two channels versus the one.

Senator BIRMINGHAM: There are two separate FM channels.

Mr Ebeid : That is correct, yes.

Senator SINGH: You probably would be aware that the Victorian Liberal Party launched a campaign, ahead of the federal election, to privatise the ABC and SBS. What effect would full privatisation have on SBS? Does this talk of the Liberal Party's campaign to sell off SBS affect the morale of staff?

Mr Ebeid : I do not think it does affect the morale of staff because I do not think anyone at SBS could possibly take it seriously.

Senator SINGH: That is a very good answer.

Senator Conroy: That is a succinct answer.

Mr Ebeid : It certainly is not in my top 100 concerns.

Senator SINGH: But, clearly, there would not be that extra $20 million of funding over three years if it were privatised.

Mr Ebeid : No, I would suspect not; nor do I think SBS, with its unique charter, could ever be operated as a commercial enterprise. You would certainly have to remove a lot of its charter obligations for it to ever become a commercial enterprise. You certainly could not do it on five minutes an hour; you certainly could not do it with the amount of in-language content that we have just been talking about. I do not think it would be feasible at all.

Senator LUDLAM: How much of a profit does SBS make?

Mr Ebeid : Last year, we ran at a deficit.

Senator SINGH: Clearly, the whole charter of SBS with the remit of what it provides to a multicultural Australia, the broad Australia, means that it needs to stay in public hands.

Mr Ebeid : Absolutely, without any hesitation.

Senator SINGH: I would like to know how NITV is going and whether you have had any feedback in relation to that channel thus far.

Mr Ebeid : I am incredibly pleased with the integration of NITV into SBS and, indeed, with the launch that we had late last year, in December. The channel has been well received by the community. We have now bedded down a lot of the implementation—the move, the processes. I am constantly getting feedback from NITV staff about their happiness and morale levels within the organisation and that they are being well supported by the rest of the organisation. So far, the content has improved as well. I know that they are working really hard on commissioning new programs with Indigenous producers over the next 12 to 18 months. Now that we have bedded down a lot of the implementation or integration into the organisation, I am really confident that we have identified significant savings in the process, which will all go towards more Indigenous content in the next 12 months. So that is another terrific thing that I am looking forward to seeing on screen for NITV next year.

Senator SINGH: Finally: you say that, regardless of the $20 million of additional funding over three years in this budget, you will not be able to increase local content. When do you think you will be in a position to increase local content—which I think is currently about 19 per cent, isn't it?

Mr Ebeid : Local content at the moment is sitting at around 15 per cent of our schedule. As you know, the convergence review had recommended that around 28 per cent of our schedule would be Australian content, so we are a long way short of that recommendation. We are constantly in discussions with the minister and the government about further increases in our Australian content levels. I think it is really important for SBS to meet its charter to be able to tell more Australian stories and contribute to the production sector, particularly with regional stories. There are more and more diversity and multicultural stories in our regions that I am really keen to get out there and share with the rest of Australia, but they are more expensive to produce. I am forever hopeful, in working with the minister and the government, to increase our funding on Australian content.

Senator SINGH: On that, regarding the SBS program Go Back To Where You Came From, which is the series that won the journalism award at the inaugural Australian Migration and Settlement Awards, are there any plans to make another series?

Mr Ebeid : We are currently in discussions with the production company on a third series and looking at what that subject would be. I think we have done justice to the asylum seeker and refugee debate in series 1 and 2. We are trying to now work up series 3 to be a whole new subject, something that would be of relevance and importance and topical for Australia. We are working through that at the moment. I am forever hopeful that it will be just as exciting as series 1 and 2, because series 2 was actually even better received than series 1 in terms of our audience numbers and it was very successful.

Senator LUDLAM: Thank you for coming, Mr Ebeid, and thank you for your answers to questions that I put on notice about the transition of NITV into SBS, among other things. That looks to me like it has been a very successful transition. What can you tell us about the trends in the number of viewers that NITV has had since being brought into the SBS stable?

Mr Ebeid : Obviously, going from a pay-TV-only channel to a free-to-air channel has increased their viewership significantly. I do not have the reach figures with me at the moment. I think the reach figure is around 1.1 or 1.2 million, but I will have to check that. We know that we are appealing certainly to the broader community as well, which is one of our hopes—that it is a channel not just for Indigenous Australians but for all Australians to really get a good view, a window, into Indigenous culture and stories; and that has been working well as well.

Senator LUDLAM: Great. Would you check those figures and provide them to us?

Mr Ebeid : I will get them to you, yes. I know that the channel does vary from evening to evening in terms of its share, depending on its content, obviously. It does range sometimes up to about 0.6 per cent of a share, which is terrific for the channel.

Senator LUDLAM: It would be good to see it benchmarked against the SBS main channel. How many staff in total does NITV have on board? I think you said 43 in your answer to my question.

Mr Ebeid : That sounds about right.

Senator LUDLAM: So no changes since then. I think it is nearly six months since the transition occurred and your answer to my question referred to a review. Would you update us as to what form that review will take.

Mr Ebeid : Just to clarify, regarding the six months, the actual integration happened last July—it started on 1 July last year—but the channel did not launch on the free-to-air network until 12 December. So it has been on air for six months, but NITV as a group have been collocating and working within SBS for coming up to 12 months.

Senator LUDLAM: That is a useful clarification. My six-month figure was more for when they actually went live on the free-to-air channel.

Mr Ebeid : Yes.

Senator LUDLAM: What is the status and the structure of the review?

Mr Ebeid : As a normal part of our budgeting cycle, as we do with the rest of the areas of SBS, we are having a review of how they have gone for the last six months. Just before we launched the channel, we spent quite a bit of time getting right around the country and talking to a lot of the community and stakeholders of the channel to understand some of their thoughts, concerns and hopes of the channel. We will be doing that again in the coming months—going back around to see how we are doing and what the feedback is from the community and the production sector and working out what we can do better with the channel. We are also looking to do some audience research work around what our audiences are thinking and feeling about the channel. That audience metric work is something that we would also do with SBS 1 and 2 and our radio networks—we do that from time to time. That will all form part of the review of NITV, to work out what we need to do better going forward.

Senator LUDLAM: Will there outside evaluation rather than just an internal review?

Mr Ebeid : It is an internal review that will be taking in a lot of external thoughts, opinions and input.

Senator LUDLAM: I turn now to what is probably one of your least favourite subjects—but I guess that is what I get to do—which is in-program advertising on the station. When SBS introduced in-program advertising in late 2006, SBS justified the disruption of programs with the commercial breaks on the basis that the revenue from in-program ads would be used to commission Australian content. In a media release issued by your predecessor on 1 June 2006, in notice of that particular change, it was stated:

Since advertising was introduced in 1991, SBS has directed all advertising revenue to program making and the commissioning of programs from independent Australian filmmakers.

It has been revealed within the last financial year that only 37 per cent of television advertising dollars were used to make Australian programs. I just wonder when that policy changed.

Mr Ebeid : Where did the 37 per cent figure that you have quoted come from?

Senator LUDLAM: An answer to question No. 2386, subquestion 11, from 19 October 2012, I think in response to the last estimates round or the one before last. That would have had the minister's name on it, I suspect, rather than yours. The figure that actually came out was TV advertising revenue of $46 million, of which $17.4 million was used to commission Australian content. So clearly there has been a bit of a shift over time.

Mr Ebeid : I will have to take it on notice and come back to you on that. From our accounting perspective, we certainly do not divide up our commercial revenues to say what percentage of that goes to television production. I will need to have a look at where that came from.

Senator LUDLAM: That is okay. It is question No. 2386 and, if you do not have that in front of you—

Mr Ebeid : Yes. It does sound odd to me.

Senator LUDLAM: What sounds odd to me is that there was clearly a policy and the policy has clearly changed. Whether there is direct hypothecation or not, the station is clearly not spending anything like its total advertising revenue on Australian content production.

Senator LUDLAM: Having now together outlined this issue, my question is whether SBS would be willing to revert to its former policy. You might like to take that on notice as well.

Mr Ebeid : Yes. What I would say on that as a general thing is that, over the last five years or so—or I suppose more than that; since that policy was made, it would be nine years—our costs across the business have increased dramatically. We have also invested in new online and digital services which have needed to be funded. I dare say that a fair percentage of our advertising revenues have also had to be diverted to fund our digital and online platforms. So it would be almost impossible to revert to that 2006 policy of saying a blanket 100 per cent of all TV advertising would go to Australian production. I do not think that is realistic, because our costs have increased dramatically across the board. For example, taking on the additional languages in radio has cost the organisation a couple of million dollars more a year. That all needs to be funded. The revenue that we get from advertising goes towards all parts of SBS; it is not specific to just TV production.

Senator LUDLAM: I am certainly not contending with you that SBS is not facing funding pressures—everybody in the room agrees with that—although the lift in the last budget was extremely welcome. It is just that there was a policy expressed and at some point it changed. I wonder whether there was an announcement that perhaps we have missed or whether it has just quietly slipped over time.

Mr Ebeid : Certainly, as I say, it is not a policy decision since I have been there, but I will have a look at what has changed.

Senator LUDLAM: I suspect it would have predated your arrival. If we go back through successive budgets, we will find it has been slipping probably since that first year. If it is of value, I have a copy of the question that I can table for you.

Mr Ebeid : I will grab that at the end, thank you.

Senator LUDLAM: My next question is really around the March amendments to the SBS Act, in which advertising for SBS digital media services was deregulated. There do not appear to be any restrictions there. I wonder what policy SBS is applying to digital media streaming, catch-up programming and that kind of stuff and whether ads are only placed in natural program breaks, or whether the same logic that is applied to your scheduled programming also applies to your streaming service.

Mr Ebeid : You are absolutely right; there is nothing in our act that does limit our advertising on our online services. However, we have taken a view internally to apply similar guidelines for our TV as we do for our online. In fact, it would be less at the moment. We would have only a couple of pre-rolls, for example, and mid-rolls of programs in our online service, whereas we would have more than that on our television service.

Senator LUDLAM: Is it likely to be less overall?

Mr Ebeid : Yes. Overall, I think it would be less because when you are sitting in front of a mobile device or a PC, that time is obviously exaggerated. Sitting through five minutes of ads, I think, would be a bad service for our audiences. We obviously do not want to be providing a bad service, so we have taken a view internally that we would certainly not exceed—and we are using the same rules that we are applying on TV to online.

Senator LUDLAM: If there are any metrics lying around that you could provide to us on that—

Mr Ebeid : Yes, that is easy. We do have metrics on that and I can provide them to you.

Senator LUDLAM: I will leave it there; thank you, Chair.

CHAIR: Mr Ebeid, I thank you and your officers. We will now suspend until 11am for a short break.

Pr oceedings suspended from 10:46 to 11:03

CHAIR: We will now move to 1.3—broadcasting and digital television.

Senator BIRMINGHAM: Can I start by asking how many households in Adelaide applied for assistance under the Household Assistance Scheme?

Ms O'Loughlin : I do have that detail, if you could give me a moment. There were 25,628 installations in metro Adelaide, and that would have been pretty much everybody who applied.

Senator BIRMINGHAM: Are you able to give me a breakdown of how many of those installations occurred before the switchover date and how many occurred after the switchover date?

Ms O'Loughlin : In Adelaide, I do not have the breakdown of numbers at the moment but—

Senator Conroy: Explain the process for when you register.

Ms O'Loughlin : The provisions were, and the agreement we had with our service contractors was, that if people applied three weeks before the switchover date then they would be serviced by the switchover date. In Adelaide, everybody who applied three weeks before the switchover date was serviced under the Household Assistance Scheme.

Senator Conroy: It was advised to residents that if they applied later than the three weeks, it was possible they could not be guaranteed that it would be done beforehand. That was all made very clear in all of the letters that went out.

Senator BIRMINGHAM: Ms O'Loughlin, are you able to ascertain for us a breakdown of those numbers who applied three weeks, less than three weeks before the switchover date, as well as those who then saw an installation occur after the switchover date?

Ms O'Loughlin : I may need to take that on notice. I may have information in the room that I can get from other officers, but I do not have it in my pack at the moment.

Senator BIRMINGHAM: If those officers are able to look it up and hopefully bring it to the table, that would be greatly appreciated. Can you give me an update on the percentage of households in the Brisbane, Gold Coast and Noosa areas that have switched over at present?

Ms O'Loughlin : Brisbane, Gold Coast and Sunshine Coast switched over on 28 May. So that was on Tuesday, at nine o'clock in the morning. We do a post-switchover survey on the same day and the following day. Our initial response to that survey was that 99 per cent of households across those regions were converted on the switchover day. That was up from about 95 per cent when we did our testing back in March.

Senator BIRMINGHAM: Were there any significant issues experienced during the switchover in Brisbane?

Ms O'Loughlin : There were a couple of issues. The Gold Coast area in particular has always had very difficult reception issues. It is a combination of factors, as we have discussed previously in these committees, where signals may be overlapping, signals may be being changed from one tower to another. We have been doing quite a lot of work in that Gold Coast area. I would have to say there are still some ongoing reception issues that we are working with the local community on and we are working with the local broadcasters to resolve. That is resulting in some pixelation and signal loss. It is a very similar circumstance to what people in those areas had in analog; it just demonstrates a bit differently in digital. A lot of that is really about talking to the local community about correct antenna placement, correct antenna installation. It is not really a transmission issue; it is basically a reception issue. That is the first issue.

There have been some households that have not been converted under the HAS that were signed up three weeks out. We are working through those at the moment. With respect to the reason for that, for Adelaide, for Tasmania and for Perth, in each of those areas the service providers have met our targets and everybody who signed up three weeks before was serviced by the switchover date, unless of course they had gone on holidays and selected another date. We did have about 700 people who were not serviced and had signed up three weeks before, which was disappointing. The circumstances were that Brisbane has had the highest HAS rollout of all our areas to date. We have done about 37,000 installations across the Brisbane, Gold Coast and Sunshine Coast areas. The 700, while a small percentage, were mainly in areas where we went out to install a set-top box and we found that people needed a much more complex installation. Predominantly, they needed a satellite installation. We are working through those issues at the moment. Our suppliers have been in touch with every person who has not been serviced. My expectation is that they will be settled in the next week or so.

Senator BIRMINGHAM: Why would there be a more significant number requiring a satellite service or having a more complex issue to address?

Ms O'Loughlin : Usually it is because of terrain in the area. The Gold Coast is a beautiful part of the country but it does have quite a lot of hills, ravines and high trees, and they are the types of things that really affect local services. As much as the broadcasters have put in additional infrastructure to improve digital reception across the areas, sometimes we do run into some complications.

The Gold Coast has three transmission sites, at Mount Tamborine, Currumbin and Springbrook. It does have very mountainous terrain and topography which obstruct signals from the local transmitters in the Gold Coast area. That is what we are working with. Around that area we find, as with a lot of coastal areas, that people's antennas are subject to much more wear and tear because of the proximity to the coast, salt build-up and those types of things. Some of it is the ability for people to improve reception in the home; some of it is just caused by the complex transmission arrangements and the terrain.

Senator BIRMINGHAM: Most of those issues sound somewhat predictable, though, in terms of obviously the terrain issue; the coastal proximity issue you have experienced before. The impact of hills on digital signals has been well known since before you even started this process, and no doubt the technical knowledge has improved. Couldn't more have been done to address and alleviate those issues in advance?

Ms O'Loughlin : The task force spends considerable time at the outset of going into an area doing a full analysis of the transmission issues in that area. We conduct that analysis in cooperation with the regional broadcasters or the local broadcasters, as we did in this case. Certainly, some of the Gold Coast issues were predictable. We provided significant information to that local community about what to expect. We have a large amount of information on our website, specifically through our mySwitch program, which will tell people what sort of reception they should be able to expect when they convert to digital.

But, that said, sometimes there are local conditions which are more evident when you go out for an installation. What we wanted to make sure with those installations was that what we did put into those homes would be the right solution for those households into the future. For example, the installer might go out and put in a set-top box, get a good signal on a couple of channels, not so good on another couple of channels, take some signal measurements, which is what they are required to do, and then in their professional judgement they come to the conclusion that it would be a better solution in the longer term for those households to have a satellite solution. The aim of the program is to give the best solution on the ground for people. A lot of that we can predict in advance, but sometimes in these complex areas it is a bit more difficult.

Senator BIRMINGHAM: Brisbane, Gold Coast, Noosa was obviously the largest switchover undertaken to date. What lessons are there out of the experience with the operators for the Household Assistance Scheme and so on that you will now take to ensure that some of those problems do not occur once we get to Sydney and Melbourne?

Ms O'Loughlin : That is an ongoing conversation we have with our contractors. I would note that we put in place very strong provisions in the contracts to provide incentives for all installations to be completed three weeks out. So there are some provisions that will come into play when those performance indicators are not achieved in this case. We have learned a lot through that. We will also be doing what we have done in previous areas, which is working very closely with the broadcasters so that each of those reception issues and as much of the reception landscape as we can possibly understand, and transmission landscape, are well known upfront. I might ask Ms Cullen if there is anything else she wants to add to that.

Ms Cullen : In Brisbane one of the big issues was the number of installations of the VAST, the satellite scheme equipment. With respect to one thing we have learned today with the main service contractor in the Brisbane region, the process for installing a VAST application under the Household Assistance Scheme is that the installer goes out for a first visit and determines that the adequate digital reception cannot be received terrestrially. That then needs to be quality assured. Part of the reason for that is to make sure that we are not overservicing or providing the wrong service for the customer. Once the quality assurance has taken place, a conditional application for VAST is made and an installer has to return to the customer's premises. So it takes two visits.

One of the things we have uncovered as a result of the issue that we have had with delayed VAST installations is that their IT system records the job as being completed at the end of the first visit. So they had underestimated the number of jobs that had follow-up visits. We are working with them today to make sure that there is a change to their system so that a VAST is not recorded as outstanding. So the number of outstandings looked less last week than what it actually has transpired to be.

The other thing that we are doing, and that the service contractor has accepted, is we cannot be leaving known VAST applications so late in the piece. We do not expect the issue to the same degree in Sydney and Melbourne. Because Brisbane is such a spread out area and it includes the Sunshine Coast, the Gold Coast and the Hinterland areas, it does have characteristics more like a regional area for people living in those places. We are not expecting the same issue in Sydney and Melbourne, but we will be making sure that the VAST applications are processed and attended to earlier, rather than being left in the last week. We have learned some lessons and we will work with the service contractors to make sure that they are addressed for those regions. They are certainly being addressed. Regional and remote Western Australia is obviously a much higher area of VAST installation in any event because it covers a big part of remote Western Australia. We are progressing those now.

Ms O'Loughlin : What was pleasing was that it is the largest HAS rollout we have done—36,000 in an area. It is a significant improvement over time of getting deliveries on the ground and done and dusted by switchover. While we did have some issues in this, which we will always learn from, we are very pleased that the huge majority of people were serviced well in advance of the switchover day. That was mainly because of the improvements we have made in the program over particularly the last 12 months.

Ms Cullen : I think the service contractors have done a very good job as well in terms of contacting all of the customers and walking them through the process and giving them a very clear idea of what is going on. That certainly has assisted in minimising any complaints or concerns.

Senator BIRMINGHAM: Credit where it is due in this case—the switchover task force has managed something which had the potential to be quite difficult, generally speaking, quite smoothly. There can be arguments at the margins about various issues. I think that from what has occurred in switchover locations to date it is a credit to the task force and the work with the industry and contractors. Perhaps it is a happy coincidence that the one side benefit of the high dollar over the last couple of years has been that it has helped the transition a little.

Mr Clarke : Senator Birmingham, Ms Cullen can give you an update on those Adelaide numbers you were looking for earlier.

Senator BIRMINGHAM: Thank you.

Ms Cullen : I understand you wanted to know how many people in Adelaide had opted in between the post three weeks before switchover and the four weeks after switchover, which is when the application date closes. There were 2,919. There are currently 130 jobs outstanding. Just to put that into context, 141 of the applications were received in the last week before applications closed. Although I cannot exactly guarantee that it was one-for-one correlation, the process that we have in place is that, once we reach three weeks out from switchover, people get serviced generally in accordance with the date that they opted in. So the 130 that are outstanding basically opted in in the last week—that is, four weeks after switchover.

Ms O'Loughlin : As much as we change our processes, we still get people who come in very late.

Senator BIRMINGHAM: In Brisbane, in addition to the 700 who got in before three weeks outstanding, how many are still outstanding?

Ms Cullen : I have an up-to-date email and I can tell you that, if you just give me a minute.

Senator Conroy: While we are doing that, could I thank you, Senator Birmingham, for your comment on the running of the program by the task force. I concur heartily, Senator Birmingham. This is an incredibly complex task made to look relatively simple by the officers at the table. There are a lot of people behind the scenes who have worked long and hard over the last two or three or four years. I endorse your comments and add to them on the public record.

Ms Cullen : In the last three weeks before switchover we have received another 2,500 applications, which are being progressed as well. We have already installed 23 of those. We have another 117 scheduled. As I say, our priority is on servicing those people who opted in three weeks beforehand and the backlog will be cleared as quickly as possible. The service contractor's current advice is that most of those should be serviced by the end of June.

Senator BIRMINGHAM: So, proportionately, the Brisbane people are far more timely than the Adelaide people in getting their applications in.

Ms Cullen : We have not gotten to that four-week post-switchover period. Surprisingly, we get quite a number of applications in that four-week post-switchover period.

Senator BIRMINGHAM: I go to the Hunter issues which we discussed in the last February estimates hearings. As I understand it, the task force was convening a number of meetings with the ACMA, broadcasters and possibly NBN to try and come up with a common solution to the problems. What has been the outcome of those discussions?

Ms O'Loughlin : As you mention, we have had quite a number of sessions with the ACMA and also the broadcasters about the issues around Port Stephens and the Hunter. The ACMA did go out and do some field surveys on our behalf to have a deeper look at what was happening across the Hunter region. We have mentioned before, and we have discussed before in this committee, the issue of atmospheric ducting in the Hunter, which is a particular transmission issue in those areas close to the coast. But the field surveys from the ACMA also discovered some things which were extremely interesting for us, which were that some of the reception problems in the Hunter were either directly attributable to, or exacerbated by, things like the antennas in people's homes pointing in the wrong direction, or inadequate or compromised antenna systems. The ACMA observed quite a wide range of antennas which were not in good repair or not positioned well or falling off roofs, et cetera. There were other issues. The ACMA with their field surveys also talked to a lot of local people and they found that there were some TVs and set-top boxes in the region that were retuning automatically to incorrect channels, which would not provide the best reception for them. There was also, in some cases, the obstruction of signals by foliage or terrain—the thing we have discussed previously—that often happens in these areas.

We have been looking at stepping up our efforts around communications in those areas so that we can assist people to better understand the reception issues and get to a point where their reception is as good as humanly possible in that area; so then we are only dealing really with atmospheric ducting. We have been working very closely with the ACMA, Free TV and the broadcasters. We are going to undertake a series of additional activities in the area, which are about developing fact sheets about how you can improve your reception in the home, and making sure that people understand where their local transmission towers are and in what direction their antennas need to be pointed. We are also going to do some work—and we have commenced this—with the local antenna installers, making sure that they have the correct technical information to assist households. The antenna manufacturers themselves are going to do some industry workshops probably around late June, early July to make sure that the installers in that area are fully equipped to assist people. That is what the task force is doing. Alongside that, the ACMA and the television broadcasters are doing further investigations between them about what else can be done to improve transmission in the area. One of the issues being considered collectively at the moment is whether the broadcasters should build new transmission infrastructure. The proposal at the moment is probably around Peppers Mountain and Wallaroo Hill and Nerong State Forest, which may assist with the co-channel interference and improve local reception.

So it is a two-sided attack at the moment. We want to get more information out to improve those things about antennas pointing in the wrong direction, inadequate or compromised antenna systems, and advising people about how to avoid having their set-top boxes autotuning to channels that do not provide adequate services—so that is on the reception side. On the transmission side, the ACMA and the broadcasters—which is sort of business-as-usual for them—are working with the broadcasters to come up with proposals to improve transmission in the area. I do not have a definitive answer, but I can assure you that we are working very hard on improving reception and transmission for people in the Hunter.

Senator BIRMINGHAM: I understand the desire to get everybody on the reception side of the equation receiving the best possible signal they can. Is there anything specific on the transmission side of the equation that the department has identified as a solution or improvement to the atmospheric ducting issues?

Ms O'Loughlin : The atmospheric ducting phenomenon is pretty much here to stay. I do not think there is any resolution of that. As you will know, across the switchover conversion process broadcasters in some areas have needed to build new infrastructure—what we call 'gap fillers'—to improve reception in pockets of areas where reception is not optimised. The ACMA and the broadcasters are looking at whether there is more infrastructure build required by the broadcasters, not to completely overcome the atmospheric ducting issue but to bolster up the signal in those areas so that it limits the impact of that ducting when it occurs.

Ms Cullen : That is right. That is really a broadcaster-led proposal. The ACMA is investigating it from the point of view of what other issues it might give rise to. I think they are progressing quite well with those proposals. It is about improving and increasing the number of transmission sites so you reduce the opportunity for the atmospheric ducting to occur.

Senator BIRMINGHAM: Have any external consultants or advisers been engaged by the department or ACMA?

Ms O'Loughlin : The ACMA are pretty much the specialists in the field. They have undertaken the field surveys. As I mentioned, they have made sure when they have gone into the region that they talk to local people, the local antenna installers, people in their homes, so they get a better understanding of not just what they are testing outside in the van but what is actually occurring in people's houses.

Senator BIRMINGHAM: Are there any other regions where you are aware of similar problems?

Ms O'Loughlin : There are some regions across Australia that are subject to atmospheric ducting. Usually it is the east coast. There are some regions where there are terrain issues and different signals coming from different directions, which can confuse equipment. The Hunter has always been a little unique in this area because it has such a big combination of these things. The atmosphere up the east coast is such that signals bounce right across Sydney and right up the north coast. They have terrain issues and they have quite a lot of different signals going in. It is a bit unique. The ACMA is probably better placed to talk about where there are ongoing transmission issues of this type. I think it is probably the only intractable one that the task force is working on at the moment.

Ms Cullen : The other significant area where we have been working is on Lancelin in Western Australia, near Perth. It is an atmospheric ducting issue. The broadcasters are working to resolve that issue by installing a new gap-filler transmission tower at a place called Two Rocks. They have been very active about engaging very closely with the community. The ducting issue there does not affect nearly as many people as it does in the Hunter. They do not have the same sort of issues around incorrect antenna set-ups. It has not been as significant. The broadcasters are expecting to have the new gap filler at Two Rocks—which should resolve the problems completely at Lancelin—operating by the middle of June.

Senator BIRMINGHAM: What is the communications strategy and approach for residents in the Hunter region, particularly those in affected areas?

Ms O'Loughlin : What we are looking at at the moment is updating the material that we have available through our mySwitch tool on the website, updating our information and facts sheets, using our call centre, which can provide information when people call through. The message we are trying to give to the Hunter is that, if you are having issues, do not feel that just because the switchover has occurred in that area you cannot contact us for additional information. So we will have a range of facts sheets available.

Ms Cullen : Sorry, can I just interrupt. What we are doing with the facts sheet is we are being very specific. We have had a range of general facts sheets about antennas and tuning to the right channels. What we are now doing is we are matching up where we have had the significant complaints from with the work that ACMA is doing. We are doing very targeted facts sheets, down to specific individual suburbs. They are being put on mySwitch. Where we have actually received complaints either through members of parliament's offices or through calls directly to the information line or through other sources, we are contacting all of those people with specific advice for their address.

We are also promoting it through the local media. We are working very closely with local media. We are monitoring how we are going with that and, if we need to, we will run local community workshops on what we need to do. As Ms O'Loughlin mentioned, we are also working very closely with the antenna manufacturers who will also be running workshops in that region to make sure that the installer community has a good understanding of the best antennas to be installing. We are obviously promoting the Australian-endorsed antennas in the area.

Senator BIRMINGHAM: How many households in the region access the VAST service and how many of those were eligible for or have claimed the satellite subsidy?

Ms O'Loughlin : I do not think we have that information with us down to the Hunter region. We are happy to take that on notice.

Senator BIRMINGHAM: If you could. Again, if it can be provided while we are still going today, that would be great. Thank you.

Ms O'Loughlin : We may need to do a bit of analysis by postcode. We will come back to you on that.

Senator BIRMINGHAM: Can I shift over to the Bathurst area? Has the department been made aware of concerns that installers responsible for installing satellite dishes have told residents they must have a pole installed on their roof as the current pole is not strong enough? The installer then apparently goes through a process of getting approval from Skybridge, who need to get approval from the government, and there can be delays of up to three months before a satellite dish is installed.

Ms O'Loughlin : There are two processes for getting VAST. In some areas VAST is almost automatic because it is very clear that there will be no terrestrial reception available in that area. So people need to go to VAST. The Satellite Subsidy Scheme is a good example of that. Where a local transmission tower is being turned off and not converted to digital, we know that in those areas it is highly likely that most of that entire community will not be able to get a digital television signal from anywhere else. So they convert to VAST. That is the first circumstance.

The second circumstance is in those areas where it is not clear that the householder may be able to get a good local signal from a local transmission tower. We have approached that with the broadcasters, the commercial broadcasters and national broadcasters. Particularly the commercial broadcasters have of course been very keen to make sure that in those areas people just do not convert to VAST because they think it is—how can I put this?—a good idea. They would prefer that people in those areas are receiving from a local transmission tower because, of course, they may have local inserts, local advertising. So we have put in place a process to test in those areas where it is a little unclear as to whether people need to go to VAST or whether they can get a good signal from a local tower. There is an approval process.

In regard the approval process, as you mentioned, Skybridge go out and they do their signal measurements. They might try things to get a good local terrestrial transmission signal in. If, at the end of the day, they do not think they can, they go back to Skybridge and they say, 'We think this has to go to VAST.' VAST is a much more expensive installation for people. Therefore, it is more expensive for the government as well. We get Skybridge to test that and make sure that that is an accurate assessment. Then they go through the approval process. It does take sometimes longer than we would like it to but we think that it has got the right checks and balances, again, to make sure that people get the right result for their households.

Senator BIRMINGHAM: Is that process able to be expedited as it gets closer to a switch-off date?

Ms O'Loughlin : We try very hard to make sure that that is expedited as it gets closer. Some people get concerned about the delays because we are expediting in some areas over other areas.

Senator BIRMINGHAM: I need to shift on because I suspect I am about to get that nod very quickly.

CHAIR: Senator Xenophon is seeking the call. I am happy to go to Senator Xenophon and come back to you, or do you want to continue?

Senator BIRMINGHAM: Can I just try what will probably only be one or two questions, which I suspect will lead in to where Senator Xenophon is going anyway.

CHAIR: Okay.

Senator BIRMINGHAM: Minister, I asked last night in relation to government policy on television advertising of live odds gambling.

Senator Conroy: I vaguely recall it, yes.

Senator BIRMINGHAM: You are vaguely recalling. We went through the process that the free-to-air networks will undertake any deadline that had been set and the process they go through with the ACMA.

Senator Conroy: Oh, yes.

Senator BIRMINGHAM: I did ask whether you had had any discussions with Premier Weatherill about this issue.

Senator Conroy: I am sure my office will send me a message to update you on that right away.

Senator BIRMINGHAM: Thank you. On the presumption that Senator Conroy will get his message soon, I am happy for Senator Xenophon to probably go to that very issue.

CHAIR: Senator Xenophon.

Senator XENOPHON: Minister, in relation to Senator Birmingham's question about discussions you have had with the South Australian government in relation to this, is it your understanding that if the South Australian code of practice for advertising was changed, that would actually mean that South Australia would have a much more rigorous code of practice or regulations in place compared to what the government is proposing? My understanding from my discussions with the South Australian Premier directly and with the Independent Gambling Authority is that you will not be able to actually show any gambling ads during a game because under the definition of gambling under the South Australian code it would mean even an ad for a betting agency to have a bet during a game would be in breach of the South Australian code.

Senator Conroy: I would have to look exactly at what the final position of South Australia was.

Senator XENOPHON: It is subject to consultation.

Senator Conroy: No. My understanding—and I say this with nothing other than it is my understanding—is that the changes we have made have incorporated and gone further than the proposal that was put forward—

Senator XENOPHON: By free TV.

Senator Conroy: No, by South Australia. The way you described gambling is probably where there would be not a misunderstanding but I will have to check on the exact use of the definition of gambling as to whether it was live odds only or broader. That is simply a little bit of confusion, I suspect. My understanding is, because we go later than 8.30 or 9 o'clock, that we go further. Our position was children will keep watching the footy after 8.30 or 9 o'clock. By definition, they will watch to the end of the match in most cases, and therefore we wanted to ensure that they could not see any live odds whatsoever for the whole match and no gambling advertising during play for the whole match.

Senator XENOPHON: Sorry, during breaks, quarter-time—

Senator Conroy: No. I said during play.

Senator XENOPHON: During play?

Senator Conroy: I said during play. We believe we went further in ensuring that kids did not see both live and gambling ads during play after 8.30 or 9 o'clock, whichever was the latest in the two or three proposals.

Senator XENOPHON: Rather than getting tied up in knots, perhaps the department could take on notice whether they have analysed the South Australian proposals—I think there is a draft code that is out—as to whether they consider that definition of gambling ads, given the discussions I have had with the South Australian Premier and checking with the Independent Gambling Authority's secretariat, and the South Australian proposals go further than what is being proposed by the government. But can you confirm, minister, that the government's proposal will not prevent gambling advertising in scheduled breaks—that is, quarter-time, half-time, three quarter time—in relation to what is being proposed and that you can still have generic gambling advertising during those scheduled breaks in play?

Senator Conroy: No. That is our stated policy. I just got a note. We believe that South Australia's proposals refer only to live odds. I am not disagreeing with you. I am saying that is our understanding.

Ms O'Loughlin : That is correct.

Senator Conroy: You said the draft code is out, Senator Xenophon?

Senator XENOPHON: Yes. My understanding is that there is a draft copy.

Ms O'Loughlin : On our reading of it, it would appear that the wording only applies to live odds. It may be that there are some definitional issues that we are unsure of.

Senator Conroy: Our understanding is we have gone further. We have picked up the proposal as we understood it and have gone a bit further than South Australia so that there would be no inconsistency across the country.

Senator XENOPHON: I have some other questions to put to you. Rather than getting bogged down on these technical issues, perhaps I could have a briefing with the department about various understandings in relation to that.

Senator Conroy: Yes, sure. If I could just update Senator Birmingham, I think my office had two phone calls with the office of the South Australian Premier. He should be roundly congratulated that South Australia is proposing restrictions on gambling advertising in sporting grounds. I would encourage everybody to pursue this and adopt this also.

Senator XENOPHON: Further to that, Minister, the Commonwealth could say that it is a condition of a broadcast not to transmit any images of gambling advertising on grounds. The Commonwealth clearly would have a jurisdictional basis to do so.

Senator Conroy: I am not sure what the technical capacity is. I am not saying it could not be done. I would imagine you could, in a digital broadcast, wipe out in the same way you could superimpose an image onto a pitch—I am sure you could—in a technical sense, superimpose a blank space over an advertising hording in the grounds. The actual in-ground advertising is not a Commonwealth jurisdiction.

We are not proposing to intervene and force television stations to digitally alter the picture to eradicate gambling advertising within the ground. We have taken the banners off that they run across the bottom 'go to' X website. That is removed during play also. A family can sit down and from the moment the players run on the field until they run off, the family will not see any gambling advertising while the play is on.

We will disagree about whether that goes far enough. But be very clear, families sitting down to watch the Friday night footy or the Saturday arvo footy will not see any ad in live play. For instance, in the AFL when a goal is scored, previously there could have been an ad from a gambling company, there could have been a promotion of live odds, there could have been anything. We have now removed that. The scheduled breaks in play are defined. The scheduled breaks in play for football are quarter-time, half-time and three quarter-time. When goals are kicked or in the NRL sometimes when a try is a scored, you break away for an ad. It could have contained a generic ad versus a live-odds ad or you cross to somebody that is a sponsor perhaps of the program that could have jumped in and given a live odd or talked about something. So all of that is removed.

Senator XENOPHON: You acknowledge the research of Associate Professor Samantha Thomas from the University of Wollongong? She provided a submission and gave evidence to the Joint Select Committee on Gambling Reform which reveals that adolescent children have a high recall of gambling brands, advertising slogans and key messages during sports broadcast. She says—

Senator Conroy: That is why we have taken out the advertising—

Senator XENOPHON: Sorry, you did not let me finish my question. Again, Minister, you did not let me finish my question. She says that banning live odds is only about, I think, five per cent of the total amount of gambling advertising.

Senator Conroy: I probably would disagree that Australians who have been watching the NRL particularly, and you are probably like me and do not watch a lot of NRL—I would probably say to you I think that it has exploded massively in the last 18 months, I think even in this year's NRL contract. The company that took over sponsoring the NRL had substantially more advertising of live odds than had previously been the case. I think overwhelmingly that was the reaction of the Australian public. The Prime Minister shared that. I suspect those figures are probably reasonable figures from the past. If you looked at what was going on this year, particularly in the early rounds of the NRL, it was far more prevalent than five per cent. That is also why, as I said, we have banned gambling ads generic during play.

Senator XENOPHON: There is some controversy and, dare I say his name, Tom Waterhouse—

Senator Conroy: I have been trying to avoid referring to any individual company to give them publicity, Senator Xenophon.

Senator XENOPHON: I think young Tom needs to realise that absolute privilege applies. Tom, if you are thinking of—

Senator Conroy: Yes, but publicity is publicity, Senator Xenophon. I was avoiding trying to draw any company—

Senator XENOPHON: But the issue has been raised. I mention him because he has been a lightning rod for this. The code also states at the moment that 'commentator' means each sport broadcast host and its guest participating in a broadcast based sporting event, but does not include other contributors who are clearly distinguishable, such as representatives of gambling organisations—

Senator Conroy: I think what happened, particularly in the early parts of the season on the NRL, was they were indistinguishable. There is a very famous photo of the person you mentioned standing there holding a Channel 9 microphone on the side of the pitch.

Senator XENOPHON: You can say his name.

Senator Conroy: I am not giving anybody any publicity. I think that where Channel 9 went badly wrong in the first part of the season was that they immersed the spruiker sponsor into the commentary team sitting at the table, walking around the ground and at one stage holding a Channel 9 microphone. That broke even the remotest part of the code that you could describe that they were putting forward. They then morphed that and they took the said individual and separated them. But we have gone further. We have said, 'Out of the ground. It has got to be a clear cross. If you are going to do this to a representative who is clearly not within the ground, standing outside the footy stadium, it has got to be clearly delineated.'

Senator XENOPHON: Can you advise, or can the department advise, that what is proposed will not prevent generic gambling advertising during scheduled breaks in play? You are saying that a sporting betting agency cannot go and say, 'Go online now. Bet now. We can give you great odds'? Can they do that?

Senator Conroy: That would probably be defined as a generic ad rather than—

Senator XENOPHON: Rather than saying—

Senator Conroy: Live odds are relatively straightforward; it is the odds on this match. The loophole that people were exploiting, even on the old proposed code, was they were not giving a live odd on the match in play; they were giving a live odd on the match that followed or the ones over the rest of the weekend. There were even people skating on the old proposed thing. So there is none of that; no live odds promotions—no live odds of three to one on that Senator Xenophon will score the next goal.

Senator XENOPHON: It would be more like 100 to one on, I think.

Senator Conroy: I am trying to give you a bit of a boost. There is an election coming, Senator Xenophon. I am trying to get you to the football!

Senator XENOPHON: I can do without the help, thank you, Minister.

Senator Conroy: Definitionally, we might include that, if you like, when we do the briefing with you so you get an understanding of the difference between a generic ad versus a live odds ad.

Senator XENOPHON: At the moment there is an exemption in the commercial television code of practice which allows any form of gambling advertising during G rated periods because sporting programs, news and current affairs are exempt. Will there at least be a complete ban on any form of gambling advertising during a G  rated period?

Senator Conroy: As I have said, we have gone further than these proposals.

Senator XENOPHON: But there is an exemption in the code at the moment.

Senator Conroy: There will continue to be generic gambling ads in the scheduled breaks—whichever matches, at whatever stages of play.

Senator XENOPHON: Even during a G rated period when kids are watching?

Senator Conroy: As I said, Saturday afternoons, Sunday afternoons, whenever the matches are being played, those are the rules. We have gone further at the other end.

Senator XENOPHON: It is a G rated period, though.

Senator Conroy: We have gone further so that after G rated periods we are also banning live odds and also—

Senator XENOPHON: Yes, but during G rated periods you will not ban gambling advertising.

Senator Conroy: We took an approach differently than just simply a time of day.

Senator XENOPHON: Why is there an exemption? Why does the commercial TV code of practice say, 'No gambling ads during a G rated period but, by the way, we are exempting news, current affairs and sports'?

Senator Conroy: As I have said a number of times, and I think you watched my interview on Lateline, as I think you have indicated earlier—

Senator XENOPHON: I have replayed it many times, Minister.

Senator Conroy: You did not need to replay it many times. You just have to watch it once and you get the same answer a lot of the time: same question, same answer.

CHAIR: Senator Conroy, I was just thinking 'deja vu', actually.

Senator Conroy: Thank you. That is probably a better way to describe that interview. As I said, we sought to strike a balance between a whole range of stakeholders. We are very conscious that the Australian public had reacted and been clear during the consultation process on the revised code. The Australian public had overwhelmingly sent the message to the TV stations that they wanted tougher standards than were being proposed. We got a sense from the discussions that that was not going to happen, so the Prime Minister, as you know, on the weekend, made her announcement. We believe we have massively reduced the amount of gambling advertising right across that period—

Senator XENOPHON: Five per cent.

Senator Conroy: when the matches are on.

Senator XENOPHON: It would be five per cent.

Senator Conroy: No. We believe that we have got rid of, completely, 100 per cent live odds from times when they were allowed before. That is a 100 per cent reduction in live odds. We have also massively reduced, when you add the two together, the generic gambling ads. They were occurring regularly as well as the live odds. We believe we have got a massive reduction: 100 per cent of live odds gone.

Senator XENOPHON: No. Can we just go back to the question I asked. There is a ban on having any gambling ads broadcast during G rated television periods, but there is an exemption for sporting programs. Why is that?

Senator Conroy: As we said, we took a different approach and we have gone further than the G rated period.

Senator XENOPHON: No, you have not. You are still exempting—

Senator Conroy: From when a match is kicked off—

Senator XENOPHON: No.

Senator Conroy: to when a match ends, there are no live odds—

Senator XENOPHON: No, I am not talking about live odds; I am talking about—

Senator Conroy: even if a match goes to 11 o'clock at night. That is longer than the G rated period.

Senator XENOPHON: Minister—

Senator Conroy: The proposal you seem to be advocating would allow children to be exposed—

Senator XENOPHON: No, I am not.

Senator Conroy: to live odds after—

Senator XENOPHON: No. No. No. No. No.

Senator Conroy: nine o'clock at night. That is the proposal you seem to be advocating.

Senator XENOPHON: No. You are not listening.

Senator Conroy: Live odds were going to be allowed under these proposals—

Senator XENOPHON: I am saying get rid of it all.

Senator Conroy: and we went further.

Senator XENOPHON: Do not show gambling ads during sporting programs.

Senator Conroy: No. That might be your proposal now. That was not the proposal being put forward by a range of people. It was to stop at 8.30, 9 o'clock. We are saying that did not go far enough. We have gone further. Kids, under those proposals, would have been able to see live odds and more generic gambling ads if they watched the footy to the end on a Friday or Saturday night, or Sunday or Monday, as they are shown in some states.

Senator XENOPHON: My bill that has been—

Senator Conroy: We have gone further.

Senator XENOPHON: Okay. My bill has been in since 20 June. You can come along to the birthday party for my bill on 20 June. There will be a nice cake there that day. You are welcome to come along. My position is that if it is a sporting program, because so many kids watch them, you should not have gambling advertising. Can you, on notice—I know that the chair has been very indulgent and has given me a lot of time on this—provide details of the representations that the government and the department have received from the industry, such as Sportsbet, Centrebet, Tom Waterhouse and other gambling agencies and the networks in relation to this in the lead up to the decision being made?

Mr Clarke : We will take that on notice.

Senator Conroy: I am not sure there was a lot in the last few weeks, but we are happy to take it on notice.

Senator XENOPHON: You do not see a parallel between tobacco advertising and gambling advertising? We managed to get rid of tobacco advertising from broadcasts.

Senator Conroy: I have heard that argument put forward in terms of junk food advertising, I have heard it put forward in terms of alcohol advertising and I have heard it put forward in terms of gambling advertising. I have had passionate people say to me, 'Junk food advertising is the next smoking ban'. You are now advocating gambling. Others, and Senator Fielding before you, advocated alcohol. I have heard all of those arguments. We have to reach a balance between different stakeholder interests. This is the balance we believe we have reached.

CHAIR: Senator Conroy, as you are aware, I have some sympathy with the issues that Senator Xenophon is raising. I accept the party has made a decision about the way forward, but do you expect these generic ads to dominate the advertising during half-time in Rugby League and quarter-time in AFL? Is that the case now?

Senator Conroy: Because I was talking about what is being imposed I had not raised that point, so I appreciate your raising that. Let me be very clear. We have said that we expect to see reasonable behaviour by the TV stations. It has been demonstrated that they do not always act reasonably. We have made it very clear that if they start to abuse the half-time or quarter-time and three quarter time breaks and start showing wall to wall generic gambling ads, we will intervene. We will not accept that. I do not believe the Australian public will accept that.

A break in the NRL is 10 minutes for half time. I think it is at least 15 in the AFL and the other codes as well. If we suddenly found that they were doing 10 minutes worth of gambling ads there would be a huge response. I would be leading it, along with the Prime Minister, and, I suspect, almost the entire caucus. We have made it very clear that if they abuse their position, there will be swift action. We are not going to have 10 minutes of generic gambling ads to try to make up for the gambling ads that they have lost during play generically and the live odds that they have lost completely. If anything begins to look unreasonable, I think there will be a huge outcry and there will be very swift action from the government.

Senator XENOPHON: Are we legislating or is it by consent, Minister?

Senator Conroy: No. I think what we said was that if people behave reasonably, and we expect them to behave reasonably—without wanting to say 'one ad in 10 minutes'. We want to avoid getting into a situation where we are trying to dictate—

Senator XENOPHON: The live odds ban, is that going to be done by regulation or by consent?

Senator Conroy: There has been a lot of confusion. The ACMA have legal underpinning. Once a code is registered, the ACMA police it. The ACMA then have enforcement powers. There is a large debate, and I am very sympathetic to the points that ACMA make about wanting what they call mid-tier powers. I have said this publicly.

Senator XENOPHON: I am sorry, mid-tier?

Senator Conroy: Mid-tier. At the moment some would say that you can cancel their licence or they get a slap on the wrist. I think that is a simplistic description of the powers, but that is what some would describe it as. ACMA have been campaigning for some mid-tier powers. Ms O'Loughlin, you would probably be more immediately familiar with that.

Ms O'Loughlin : The ACMA have a number of powers under the code. As the minister said, the process at the moment is that the minister has written to the free-to-air broadcasters—that is, the commercial radio, commercial television and the subscription broadcasters—and requested them to come forward with a code that reflects the Prime Minister's decisions. The government has given them until 10 June to submit those codes to the ACMA. The ACMA is required to consider those and either register them or reject them. The government has indicated that if the industry does not submit their codes by 10 June then it will move to legislation. But, in the first instance, it is putting the pressure back on the industry to come up with a code that reflects the government's decisions. Once the ACMA registers that code it will then, of course, go into taking complaints against the code and investigating where things have not complied with the code. It opens up the capacity for people to complain to the ACMA against the provisions that the government has agreed. The ACMA has a number of powers that it can use for breaches of the code, but there is also a committee looking at the moment at whether or not the ACMA's powers should be expanded to include things like on-air corrections and on-air statements of findings of their investigations. That is in play at the moment.

Senator XENOPHON: Does that have to be done legislatively or can it be done through the code?

Senator Conroy: That would be a legislative matter.

Ms O'Loughlin : Legislatively.

Senator Conroy: I have indicated on a number of occasions that I am sympathetic to the mid-tier powers that the ACMA have been talking about.

Ms O'Loughlin : It could be included in a code, but that of course would require agreement by the industry and the industry have not agreed to those sorts of powers previously. It would be something the government would need to consider—

Senator XENOPHON: Are you saying that even if the industry agrees to what is being proposed by the Prime Minister—

Ms O'Loughlin : No, I misspoke. I was only talking about the additional on-air corrections power. They have not agreed to that.

Senator XENOPHON: There are sufficient powers contained in the legislative framework at the moment to enforce the live odds ban?

Ms O'Loughlin : Most things that are watched on commercial television and heard on commercial radio are actually covered by codes of practice. That is very effective in delivering community standards.

Senator XENOPHON: Thank you.

CHAIR: Thanks very much. We will all watch this with interest because you have got a cashed-up gambling industry and a cash-strapped media industry. There are still pressures there on the advertising area. I certainly would be really concerned about wall-to-wall advertising.

Senator XENOPHON: Chair, just think of all the revenue that the networks will get from the election campaign ads.

CHAIR: Senator Xenophon, I have been very patient with you.

Senator Conroy: He is just cheeky!

Ms O'Loughlin : Chair, could I add something to respond to Senator Birmingham's question earlier. There have been 2,051 installations of VAST in the Hunter region. With Booral, which is a town which has brought it in through the satellite subsidies scheme, there are 101 installations in Booral supported by that scheme. People in the Hunter are well aware that moving to VAST may present an optimal solution for them. We have helped some of them and some of them have gone across on their own volition.

Senator BIRMINGHAM: Thanks, Ms O'Loughlin.

CHAIR: My thanks to the officers. I now call officers from Australia Post.