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National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017



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ISSN 1328-8091

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BILLS DIGEST NO. 84, 2017-18 2 MARCH 2018

National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017 Philip Hamilton Politics and Public Administration Section

Contents

Purpose of the Bill ............................................................... 3

Structure of the Bill ............................................................. 3

Background ......................................................................... 3

Government entities’ reporting of executive remuneration........................................................................... 3

Changing annual report requirements .................................. 3

Questions about ABC and SBS executive remuneration ....... 4

British Broadcasting Corporation .......................................... 5

Committee consideration .................................................... 5

Senate Environment and Communications Legislation Committee ............................................................................... 5

Senate Standing Committee for the Scrutiny of Bills .............. 5

Policy position of non-government parties/independents ..... 5

Australian Greens .................................................................... 5

Opposition ............................................................................... 5

Cross-bench senators .............................................................. 5

Position of major interest groups ......................................... 6

Financial implications .......................................................... 6

Statement of Compatibility with Human Rights .................... 6

Parliamentary Joint Committee on Human Rights .................. 6

Key issues and provisions..................................................... 6

Reporting requirement ............................................................ 6

Commencement ...................................................................... 6

Applicable reporting threshold ................................................ 7

Coverage .................................................................................. 7

Date introduced: 6 December 2017

House: Senate

Portfolio: Communications and the Arts

Commencement: the day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at

March 2018.

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Employees ............................................................................. 7

On-air talent .......................................................................... 7

Specialist contractors ............................................................ 7

Treatment of payments for expenses ................................... 7

Attributing payments to reporting periods ........................... 8

Use of third parties may affect coverage .............................. 8

Accountability .......................................................................... 9

Government funding ............................................................. 9

Gender pay gaps .................................................................... 9

Privacy issues ......................................................................... 10

Compatibility with the Privacy Act 1988 ............................. 10

Parliamentary committees’ concerns about privacy........... 10

Consistency with public sector and broadcasting industry .................................................................................. 10

Public sector ........................................................................ 11

Broadcasting industry .......................................................... 11

Possible commercial consequences ...................................... 11

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Purpose of the Bill The purpose of the National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017 (the Bill) is to amend the Australian Broadcasting Corporation Act 1983 (the ABC Act) and the Special Broadcasting Services Act 1991 (the SBS Act) to require that, where total amounts paid exceed $200,000 annually (as adjusted by an annual indexation factor), the Australian Broadcasting Corporation and the Special Broadcasting Services (the national broadcasters) must report:

• salary and allowances paid to employees and

• payments made under contracts to ‘on-air talent’ (that is, for services that include appearing in a television program, or speaking or performing on a radio program).

The names of such employees and contractors, and the positions or services they performed, must also be reported.

Structure of the Bill The Bill is divided into two Schedules:

• Schedule 1 comprises proposed amendments to the ABC Act and

• Schedule 2 comprises proposed amendments to the SBS Act in equivalent terms.

Background In August 2017 the Government secured the support of Pauline Hanson’s One Nation Party (PHON) for passage of the Broadcasting Legislation Amendment (Broadcasting Reform) Act 2017.1 In exchange for this support, the Government agreed to initiate an inquiry into ‘whether or not the practices of the national broadcasters are breaching the general principle of competitive neutrality and that they are operating on a level playing field with their commercial counterparts’.2 Legislative initiatives arising from the Government-PHON arrangement are:

• a public register of foreign-owned media assets, and a community radio package, addressed in the Broadcasting Legislation Amendment (Foreign Media Ownership and Community Radio) Bill 2017, and a commitment to further funding in 2019-20 and 2020-21 to support community digital radio rollout

• proposals to enhance the ABC's focus on rural and regional Australia, addressed by the Australian Broadcasting Corporation Amendment (Rural and Regional Measures) Bill 2017

• a legislative requirement for ABC news and information to be ‘fair’ and ‘balanced’, addressed by the Australian Broadcasting Corporation Amendment (Fair and Balanced) Bill 2017 and

• measures to require the disclosure of the remuneration of senior staff and on-air talent at the national broadcasters (the disclosure measures), addressed by this Bill.3

Government entities’ reporting of executive remuneration The inclusion of the disclosure measures in the Government-PHON arrangement was preceded by developments in relation to Government entities’ reporting of executive remuneration, and a new requirement for the British Broadcasting Corporation (BBC) to disclose the names and salaries of its highest-earning actors and presenters.4

Changing annual report requirements The annual reporting obligations of government entities, including the national broadcasters, are established by:

• section 46 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), which provides that each Commonwealth entity must give an annual report to the entity’s responsible Minister for presentation to the Parliament

• section 80 of the ABC Act and section 73 of the SBS Act, which list matters that must be included in each entity’s annual report and

1. P Hanson (One Nation Senator for Queensland), One Nation gives conditional support to media reform, media release, 15 August 2017. 2. M Fifield (Minister for Communications), One Nation support for media reform package, media release, 15 August 2017. 3. Ibid.

4. L Battersby, ‘One Nation wins ABC reform changes in reform deal’, The Sydney Morning Herald, 16 August 2017, p. 1.

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• the terms of the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (Financial Reporting Rule) issued by the Minister for Finance under the PGPA Act.

Under the Labor Government, government entities’ reporting of executive remuneration disclosed the benefits received by individuals.5 From 2014-15 that changed, because a Coalition Government Financial Reporting Rule stated the intention that entities ‘report the cost to the Commonwealth of employing senior management personnel for the reporting period, as opposed to reporting the individual benefits received by those persons’.6 The reduced detail prompted interest in executive remuneration at government entities, most notably that of Ahmed Fahour, the former CEO of Australia Post.7

Questions about ABC and SBS executive remuneration At a Senate Estimates hearing in May 2017, PHON posed a number of questions about the remuneration of ABC and SBS employees.8 In July 2017 the ABC’s answers to Questions on Notice provided information about the ABC’s twenty highest-paid on-air presenters, and other matters, without disclosing details about individuals.9

In August 2017 the Government stated that it would write to the ABC and SBS to request regular disclosure and advise that ‘in the event either broadcaster does not agree to implement this policy, the Government will introduce legislation before the end of 2017 to … give effect to this policy’.10 In October 2017 the ABC’s Managing Director, Michelle Guthrie, told a Senate Estimates hearing that ‘we were advised by the Department [of Communications and the Arts] and by the Department of the Prime Minister and Cabinet that listing individual names on the website would breach the Privacy Act’.11 In the same month the Chairman of the SBS Board, Dr Bulent Hass Dellal, was quoted as saying that ‘SBS is unable to comply with the proposed increased disclosure—principally because, in the absence of consent, disclosure would breach the Privacy Act 1988’.12

In a subsequent development, in December 2017 the ABC published a table that details the remuneration and names of Key Management Personnel for the year ended 30 June 2017. The ABC states that the table is ‘part of the ABC’s commitment to align remuneration disclosures with standards in the private sector for Key Management Personnel’.13 The information complements two other tables published as the ABC‘s Remuneration disclosure log, in which:

• Table A includes, in $25,000 increments, the average reportable remuneration paid to the Leadership Team (excluding the Managing Director) at 30 June 2017 and

• Table B provides, in $25,000 increments, aggregate information about other employees including former employees (excluding the current Leadership Team), whose average annual reportable remuneration was more than $200,000 for the year to 30 June 2017.14

In its Annual report 2016-17, SBS published tables similar to the ABC’s tables A and B.15

5. Section 23, Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 1 July 2010). 6. Section 27, Public Governance, Performance and Accountability (Financial Reporting) Rule 2015, issued February 2015 and deemed to have commenced 1 July 2014. The current compilation of the Rule (May 2017) includes the same statement of intent. 7. Arrangements for the setting of remuneration for CEO positions include a degree of public transparency. Remuneration for Principal Executive

Officers (for example, the CEOs of many Commonwealth corporate entities such as Australia Post and the national broadcasters) is set by the independent Remuneration Tribunal. The Tribunal assigns each Principal Executive Officer (PEO) position to a classification band that prescribes a Total Remuneration Band Range within which an Employing Body (typically, an entity’s board), may determine a specific level of remuneration. Consequently, the Tribunal’s determination provides an indication of the level of remuneration for a CEO. Specific details of CEO remuneration may be released by an employing entity on an ad hoc basis (for example, in a media release at the time of her appointment in December 2015, the ABC disclosed that the remuneration for incoming Managing Director, Michelle Guthrie, would be $900,000 per year). As noted above, depending on the requirements of rules issued by the Minister for Finance under the PGPA Act, entities have also disclosed in their annual reports specific information about CEO remuneration, or sufficient detail that the remuneration for a CEO may possibly be deduced. 8. Senate Environment and Communications Legislation Committee, Official committee Hansard, 24 May 2017, pp. 176, 189, 190. 9. Senate Environment and Communications Legislation Committee, Answers to Questions on Notice, Communications and Arts Portfolio,

Budget Estimates 2017-18, Questions 115, 116, 131, 132, 133, 134 and 135; T Minear, ‘Aunty’s big wages bill’, The West Australian, 21 July 2017, p. 14. 10. M Fifield (Minister for Communications), One Nation support for media reform package, op. cit. 11. M Guthrie (Managing Director, Australian Broadcasting Corporation), Evidence to Environment and Communications Legislation Committee, Official committee Hansard, 24 October 2017, p. 104. 12. M Mason, ‘ABC, SBS refuse to disclose staff paid over $200,000’, The Australian Financial Review Weekend, 11 November 2017, p. 8. 13. ABC, ‘Remuneration disclosure log’, ABC website. 14. Ibid.

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British Broadcasting Corporation From 2016-17, the BBC has been required to publish, on an annual basis, information (including names) about senior BBC executives, and other people working for the BBC, who have been paid more than £150,000 from television licence fee revenue in a financial year.16 The BBC published the first such list in July 2017.17

Committee consideration Senate Environment and Communications Legislation Committee The Bill has been referred to the Senate Environment and Communications Legislation Committee for inquiry and report by 26 March 2018.18 Details of the inquiry are at the inquiry homepage.19

Senate Standing Committee for the Scrutiny of Bills In its consideration of the Bill, the Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) expressed a concern that the Bill ‘may unduly trespass on personal rights and liberties’.20 The Committee’s views are discussed under the heading ‘Key issues and provisions’ (below).

Policy position of non-government parties/independents Australian Greens In October 2017, the Australian Greens (the Greens) initiated a motion proposing that the Senate ‘will not support legislation that forces the ABC or SBS to publicise the salaries of its staff, breaching their right to privacy’.21 The motion was passed 34 to 27.22

Opposition The Senate motion was co-sponsored by the Australian Labor Party.23 Opposition senators supported the motion. 24

Cross-bench senators PHON senators and Senators Bernardi and Leyonhjelm opposed the motion, thereby indicating that they are likely to support the Bill.25

Senator Hinch voted for the motion, stating that:

I think it will be enough for the ABC to publish the total money paid to their staff, otherwise it will inhibit ABC staff members who might want to move into the commercial area … As long as we're told the total money spent on journalism and staff, that is enough for us to know. I think individually those contracts should be protected. 26

15. SBS, Stories worth talking about, annual report, SBS, Sydney, NSW, 2017, p. 164. 16. The BBC differs from the ABC and SBS in relation to its funding. The BBC is established by a Royal Charter and its role is elaborated in an accompanying Agreement. The BBC receives over 75 per cent of its revenue from a television licence fee payable by all households and other residences in the UK. In contrast, the ABC and SBS are established by legislation that includes functions specified in charters. The ABC and SBS

are mainly funded by the Budget. 17. BBC, Annex to the BBC annual report and accounts 2016/17, BBC, 2017. On page 6, the BBC noted that the list excluded ‘amounts from: commercial investments into programmes; any payments made by our commercial entities, such as BBC Worldwide; payments made by independent producers; royalties; and repeat fees. Expenses are also excluded’. 18. Senate Standing Committee for Selection of Bills, Report, 1, 2018, The Senate, Canberra, 7 February 2018. 19. Senate Environment and Communications Legislation Committee, National Broadcasters Legislation Amendment (Enhanced Transparency) Bill

2017, The Senate, Canberra, 2018. 20. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 1, 2018, The Senate, 7 February 2018, p. 81. 21. S Hanson-Young, ‘Motions: Australian Broadcasting Corporation, Special Broadcasting Service’, Senate, Debates, 18 October 2017, p. 7909. 22. President of the Senate, ‘Motions: Australian Broadcasting Corporation, Special Broadcasting Service’, Senate, Debates, 18 October 2017,

p. 7909.

23. S Hanson-Young, ‘Motions: Australian Broadcasting Corporation, Special Broadcasting Service’, Senate, Debates, 18 October 2017, p. 7909. 24. President of the Senate, ‘Motions: Australian Broadcasting Corporation, Special Broadcasting Service’ , Senate, Debates, 18 October 2017, p. 7909. 25. Ibid., p. 7909. 26. D Hinch, ‘Motions: Australian Broadcasting Corporation, Special Broadcasting Service’, Senate, Debates, 18 October 2017, p. 7910.

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The circumstances of other cross-benchers have changed since they voted for the motion in October 2017. Skye Kakoschke-Moore, Jacqui Lambie and Nick Xenophon are no longer senators, and Senator Gichuhi has joined the Liberal Party.

Position of major interest groups Commenting on the Government-PHON arrangement that facilitated passage of the Broadcasting Legislation Amendment (Broadcasting Reform) Act 2017, the Media, Entertainment & Arts Alliance stated that ‘the Government’s grubby deal with One Nation is beneath contempt. Facilitating baseless attacks on our public broadcasters is disgraceful and we will be lobbying Senators to reject any legislation when it is presented’.27

Financial implications The Explanatory Memorandum states that ‘the measures in this Bill are expected to have no financial impact’.28

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.29 The Explanatory Memorandum states that:

The Bill is compatible with human rights because to the extent that it may limit or restrict the right to privacy, those limitations are reasonable, necessary and proportionate. 30

Privacy issues are discussed under the heading ‘Key issues and provisions’ (below).

Parliamentary Joint Committee on Human Rights In its consideration of the Bill, the Parliamentary Joint Committee on Human Rights (Human Rights Joint Committee) questioned whether the approach taken in the Bill is the ‘least rights-restrictive way to achieve the stated aim’ and sought advice from the Minister on this issue. The Committee’s views are discussed under the heading ‘Key issues and provisions’ (below).31

Key issues and provisions Reporting requirement The Bill inserts proposed section 80A into the ABC Act32 and proposed section 73A into the SBS Act.33 The provisions require that, where total amounts paid exceed the applicable reporting threshold annually, the national broadcasters’ annual reports which are given to the Minister in accordance with the PGPA Act must disclose the salary and allowances paid to employees34 and payments made under contracts to ‘on-air talent’.35 The names of employees and on-air talent, and the positions held or services they performed, are to be specified.36 Amounts of foreign currency are to be translated to Australian currency at the exchange rate applicable at the time of payment.37

Commencement Proposed section 80A of the ABC Act and proposed section 73A of the SBS Act apply in relation to annual reports for a period beginning after Royal Assent.38 If the Bill receives Royal Assent by 30 June, the first reporting

27. Media, Entertainment & Arts Alliance, Media diversity and jobs to be lost under ‘reforms’, media release, 14 September 2017. 28. Explanatory Memorandum, National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017, p. 4. 29. The Statement of Compatibility with Human Rights can be found at page 5 of the Explanatory Memorandum to the Bill. 30. Ibid., p. 7. 31. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 1, 6 February 2018, p. 53. 32. Inserted by item 3 in Part 1 of Schedule 1 to the Bill. 33. Inserted by item 3 in Part 1 of Schedule 2 to the Bill. 34. ABC Act, proposed paragraph 80A(1)(a); SBS Act, proposed paragraph 73A(1)(a). 35. ABC Act, proposed paragraph 80A(1)(b); SBS Act, proposed paragraph 73A(1)(b). 36. ABC Act, proposed subsection 80A(1); SBS Act, proposed subsection 73A(1). 37. ABC Act, proposed subsections 80A(4) and (5); SBS Act, proposed subsections 73A(4) and (5). 38. Item 4 in Part 2 of Schedule 1 to the Bill and Item 4 in Part 2 of Schedule 2 to the Bill.

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period would be the 2018-19 financial year, and relevant annual reports would be published around October 2019.

Applicable reporting threshold The applicable reporting threshold for the first reporting period is $200,000.39 The Explanatory Memorandum states that for subsequent years ‘this reporting threshold amount will be indexed annually in line with the Consumer Price Index (CPI) figures published by the Australian Statistician’.40 Proposed section 80B of the ABC Act and proposed section 73B of the SBS Act set out how the indexation of the applicable reporting threshold will be calculated. Definitions which are relevant to the amendments being indexation factor, index number, and reporting period are inserted into existing subsection 3(1) of the ABC Act and section 3 of the SBS Act.41

Coverage

Employees Proposed paragraph 80A(1)(a) of the ABC Act covers employees whose salary and allowances during a reporting period exceed the applicable reporting threshold. Proposed subsection 80A(2) exempts lump sum payments paid on termination for unused leave entitlements. Proposed paragraph 73A(1)(a) and proposed subsection 73A(2) of the SBS Act are in equivalent terms.

On-air talent Proposed paragraph 80A(1)(b) of the ABC Act and proposed paragraph 73A(1)(b) of the SBS Act cover a party to one or more on-air talent contracts. In relation to on-air talent, the Explanatory Memorandum states:

‘On-air talent’ is intended to have broad meaning and be platform neutral, in recognition of the changing media landscape. The proposed reporting measures are intended to capture on-air talent (above the specified monetary reporting threshold) across all platforms used by the national broadcasters including online and podcasting services such as ABC iView and SBS On Demand.

42

However, in contrast to that apparent intention, the Bill captures only individuals who perform services that consist of or include:

• appearing on a television program or

• speaking or performing on a radio program.43

Consequently, it is unclear whether the Bill would apply to individuals who perform in content that is available exclusively on an online platform, as distinct from individuals who perform in content that originally appeared on television or radio, and is subsequently made available on an online platform.

Specialist contractors In addition to employees and on-air talent, the BBC reports on ‘specialist contractors’ who perform a range of production roles, but apparently do not appear on-air. Roles include: writer; casting director; programme manager; IT programme manager; technical project manager; identity architect; analytics architect; service architect; and integration lead.44 Unlike the position in the UK then, the Bill is specifically focused on employees and on-air talent, so payments to specialist contractors are not within the scope of the proposed disclosure regime.

Treatment of payments for expenses In relation to specialist contractors and on-air talent, the BBC specifically noted that its list excluded expenses.45 In contrast, the Bill does not address the treatment of expenses. It may be intended that expenses will be dealt

39. ABC Act, proposed subsection 80A(6); SBS Act, proposed subsection 73A(6). 40. Explanatory Memorandum, National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017, p. 3. 41. Inserted by item 1 in Part 1 of Schedule 1 to the Bill and item 1 in Part 1 of Schedule 2 to the Bill respectively. 42. Explanatory Memorandum, National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017, p. 3. 43. ABC Act, proposed subsection 80A(3); SBS Act, proposed subsection 73A(3). 44. BBC, Annex to the BBC annual report and accounts 2016/17, op. cit., p. 6. 45. Ibid., p. 6.

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with in the context of the allowances provided for in proposed section 80A of the ABC Act46 and proposed section 73A of the SBS Act,47 but this is not clear.

Attributing payments to reporting periods In relation to specialist contractors and on-air talent, the BBC specifically noted that its list excluded royalties and repeat fees.48 In contrast, the Bill does not address the treatment of royalties and repeat fees. This could affect the transparency of the disclosure regime because royalties and repeat fees are a form of payment for work performed in previous reporting periods.

In compiling its list, the BBC appears to have been afforded some discretion in the classification and presentation of payments, particularly in relation to attributing payments to the reporting period in which work was performed.

This table is based on monies paid in the financial year 2016/17. For four individuals, the timing of cash payments made in the financial year materially distorts their banding. We have therefore fairly reflected the substance of these payments in the table. In the case of two of these individuals, material payments that took place between the end of the financial year and the date of this report which relate to work done in 2016/17 have been included. In the case of the other two individuals, payments in relation to long-term agreements have been apportioned evenly over the contract term.

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However, the Bill requires the national broadcasters to report on the basis of the timing of payments, rather than when the work for which the payment is being made was performed.

Use of third parties may affect coverage The Bill refers to individuals, specifying that ‘an on-air talent contract is a contract (other than a contract of employment) entered into between the Corporation and an individual’.50

However, when publishing its disclosure of remuneration, the BBC specifically noted that the list excluded payments made through independent production firms.51 As a result, some high-profile presenters were not included in the BBC’s list because the individuals were not paid directly by the BBC—the individuals were paid by production companies that had contracts with the BBC. It was reported:

Graham Norton’s stated earnings of £850,000-£899,999 make him the third highest-paid star on the list, but they cover only his work on Radio 2, Eurovision and the BBC One Saturday night show Let It Shine. His main entertainment programme, The Graham Norton Show, is made by his own production company, So Television, and the money he earns from that is not covered in the BBC report …

Independently-made shows include Question Time, The Apprentice, University Challenge and MasterChef, meaning the salaries of David Dimbleby, Lord Sugar, Jeremy Paxman, John Torode and Gregg Wallace do not appear in the published accounts. Instead, the BBC pays an overall sum of money to the programme-makers, who decide what proportion of it is paid to the stars …

The list of highest-paid actors is dominated by the cast of EastEnders, Holby City and Casualty. But it is unlikely that they out-earn the Hollywood stars who have graced BBC One dramas in the past year: Tom Hiddleston in The Night Manager and Benedict Cumberbatch in Sherlock. Both were co-produced with independent companies. 52

The BBC experience suggests that the existence of disclosure measures could provide an incentive for payments through third parties such as production companies. If third parties were used in contractual arrangements for on-air talent, it could have the effect of placing some payment arrangements outside the scope of a disclosure

46. Inserted by item 3 in Part 1 of Schedule 1 to the Bill. 47. Inserted by item 3 in Part 1 of Schedule 2 to the Bill. 48. Ibid., p. 6. 49. Ibid., p. 10. 50. ABC Act, proposed subsection 80A(3); SBS Act, proposed subsection 73A(3). 51. BBC, Annex to the BBC annual report and accounts 2016/17, op. cit., p. 6. 52. A Singh, ‘BBC pay list: the hidden names the corporation does not want you to see’, The Telegraph, 20 July 2017.

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regime that is focused only on remuneration provided directly by the national broadcasters to individuals as envisaged by the Bill.

The UK Telegraph newspaper/website also anticipates another possible use of third parties that could impact on a disclosure regime.

The situation will become more opaque in the 2017/18 accounts because the corporation’s in-house production unit, BBC Studios, became an independent commercial entity at the beginning of this tax year. 53

Accountability

Government funding The Explanatory Memorandum states that ‘the measures will complement the Government’s existing policy that public agencies and entities should be transparent in how Commonwealth funding is allocated and spent’.54

However, the Bill does not limit reporting on the remuneration of individuals to positions that are funded by appropriations from the Budget. Revenue from sources other than Government is significant for the ABC and particularly for SBS.55 Portfolio Budget Statements indicate that in 2017-18:

• approximately 7.8 per cent of the ABC’s total revenue will come from non-Budget sources ($1.043 billion from the 2017 Budget, and a forecast $88.7 million from other sources)56 and

• approximately 26.6 per cent of SBS’s total revenue will come from non-Budget sources ($280 million from the 2017 Budget, and a forecast $101.6 million from other sources)57

Accountability for public funding would be improved if the reporting regime focussed on positions funded by Government, and did not include positions funded by revenue from sources other than Government. This approach would be comparable with the arrangements applicable to the BBC, where the intention has been to improve accountability by reporting on positions funded by licence fee revenue, excluding positions funded by revenue from other sources.58

Gender pay gaps Following publication of the BBC’s inaugural list in July 2017,59 commentators noted a lack of ethnic diversity on the list, and a gender pay gap. Of the 96 actors and presenters paid more than £150,000, 62 were men and 34 were women. The seven highest earners were all men.60 It has been reported that at least one prominent female staff member has resigned and lodged an equal pay complaint.61

The Explanatory Memorandum states that measures in the Bill will ‘allow the public to [identify] … if there is a gender salary gap across similar roles or level of talent [and] how proactive the national broadcasters are in closing any identified gender salary gaps’.62 However, at a Senate Estimates hearing in October 2017, the Managing Director of the ABC, Michelle Guthrie, gave evidence that ‘49 per cent of our senior executive is female and 51 per cent of the general workforce is female. This is also the case in relation to pay. There is no pay

53. Ibid.

54. Explanatory Memorandum, National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017, p. 3. 55. Subsection 29(2) of the ABC Act permits the ABC to determine charges payable in respect of a range of activities ‘with a view to raising as much net revenue as is practicable’, and section 57 of the SBS Act allows SBS to receive money from sponsorship, advertising and other activities. 56. Australian Government, Portfolio budget statements 2017-18: budget related paper no. 1.3: Communications and the Arts Portfolio,

Commonwealth of Australia, Canberra, 2017, p. 71. 57. Ibid., p. 285. 58. The BBC’s list excluded payments from the profit-making, wholly-owned subsidiary BBC Worldwide. 59. BBC, Annex to the BBC annual report and accounts 2016/17, op. cit. 60. A Santos, ‘BBC’s list of top-paid stars sparks controversy over pay gap, lack of diversity’, NBC news, 19 July 2017. 61. M Whyte, ‘How women in media won some pay equality in the 1970s, and why they’re still fighting today’, The Conversation,

15 January 2018. 62. Explanatory Memorandum, National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017, p. 6.

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gap unfavourable to women at any level in the ABC’.63 More detail was provided in the ABC’s 2016-17 annual report.64

Speaking in relation to the Bill, Senator McGrath stated:

The national broadcasters assert that no pay gap unfavourable to women exists within their organisations. That is to be commended. The additional transparency measures proposed by this Bill will ensure ongoing scrutiny and visibility to the Australian public of the performance of the national broadcasters in this regard. 65

The Scrutiny of Bills Committee66 and the Human Rights Joint Committee questioned whether there are ‘less rights restrictive ways’ to achieve the objective, such as ‘requiring the ABC and SBS in their annual reports to disclose the number or proportion of female employees and on-air talent earning over $200,000 compared to male employees and on-air talent in the same position’.67

Privacy issues

Compatibility with the Privacy Act 1988 The Privacy Act 1988 contains the Australian Privacy Principles (at Schedule 1) which set out rules for the handling of personal information. APP 6 is relevant here—it provides that entities can only use or disclose personal information for the particular purpose for which it was collected. In this context, the managing directors of the national broadcasters have stated that, in the absence of consent from the individuals who would be affected, disclosure of remuneration under current arrangements would breach the Privacy Act.68

However, APP 6 includes a number of exceptions, including where the use or disclosure is authorised by an Australian law (see APP 6, clause 6.2(b)). That being the case, passage of the Bill would allow disclosure of the information required to be made public under the amendments.

Parliamentary committees’ concerns about privacy The Scrutiny of Bills Committee expressed its concern:

in publishing the names and remuneration details of ABC and SBS employees and contractors receiving more than $200,000, the bill impacts on the right to privacy of such persons and may unduly trespass on personal rights and liberties. The committee draws these scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of publishing such details.

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In seeking to balance enhanced accountability for public spending ‘without limiting the right to privacy of employees and on-air talent’, the Human Rights Joint Committee suggested the option of ‘disclosure of de-identified or anonymised information as to the number of employees and on-air talent earning over certain amounts (as specific figures or in pay bands)’.70

Consistency with public sector and broadcasting industry Passage of the Bill would clear a legal path for the disclosure of remuneration. However, the disclosure arrangements would not be entirely consistent with current arrangements for the disclosure of remuneration either in the public sector or in the broadcasting industry.

63. M Guthrie, Environment and Communications Legislation Committee, op. cit., p. 103. 64. ABC, Investing in audiences, annual report, 2017, vol. 2, p. 49. 65. J McGrath (Assistant Minister to the Prime Minister) ‘Second reading speech: National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017’, Senate, Debates, 6 October 2017, p. 9915.

66. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, op. cit., p. 81. 67. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, op. cit., p. 53. 68. M Guthrie (Managing Director, Australian Broadcasting Corporation), Evidence to Senate Environment and Communications Legislation Committee, Official committee Hansard, 24 October 2017, p. 104; and M Mason, ‘ABC, SBS refuse to disclose staff paid over $200,000’, op.

cit., p. 8.

69. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, op. cit., p. 81. 70. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, op. cit., pp. 52-3.

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Public sector Senator McGrath’s second reading speech in relation to the Bill makes the point that ‘the concept of reporting on employee salaries is not a new one … members of parliament, ministers, judges, senior public servants and military officers all have their salaries publicly released’.71

The Remuneration Tribunal determines, reports on or provides advice about remuneration, allowances and entitlements for senior public offices such as those listed above.72 The Tribunal publishes its determinations and advice, so the processes are relatively public for the senior and prominent positions within its jurisdiction. However, there are key differences between the Tribunal’s processes and the provisions provided for in the Bill, namely:

• the Tribunal operates in relation to specified offices (generally the one or few most senior positions in each organisation) without a focus on the individuals who may occupy those offices from time to time and

• in contrast, the Bill will require reporting on remuneration above an arbitrary dollar threshold, with a specific focus on the naming of individuals regardless of their responsibilities (except in relation to performance on-air).

In relation to other less prominent and less senior public sector positions, rules issued by the Minister for Finance under the PGPA Act state that ‘the intention … is to report the cost to the Commonwealth of employing senior management personnel for the reporting period, as opposed to reporting the individual benefits received by those persons’.73 The Bill’s focus on the naming of individuals is therefore not consistent with established practice in the Commonwealth public sector.

Broadcasting industry Senator McGrath also makes the point that ‘private companies, including commercial broadcasters are required to include similar information in annual reports, provided for under the Corporations Act 2001’.74 However, it is not clear that the measures in the Bill are comparable to current requirements applicable to commercial broadcasters.

By way of an example, the 2016-17 annual report of Nine Entertainment Co includes information about the remuneration of directors and the company’s most senior executives, but does not base this reporting on a threshold of any particular dollar amount. The report does not include information about the remuneration of on-air presenters.75

Possible commercial consequences At Senate Estimates in October 2017, the Managing Director of SBS, Mr Ebeid, recounted that ‘the BBC told me that, since they published names and salaries, all it has done at the BBC is increase salaries right across the board as employees then started asking questions about why they were earning less than colleagues’. For this reason, Mr Ebeid’s view is that disclosure ‘doesn't make a lot of commercial sense and it's not in the public interest for us to do so because it will drive costs up’.76 Supporting this assertion, at least one contract renegotiation at the BBC has been reported.77 It has also been reported that at least one prominent female staff member has resigned and lodged an equal pay complaint.78

Commenting in August 2017 on the BBC’s disclosure of remuneration for on-air talent, Australian journalist Dennis Atkins observed that the disclosure of remuneration ‘led to a lot of people leaving and going to

71. J McGrath (Assistant Minister to the Prime Minister) ‘Second reading speech: National Broadcasters Legislation Amendment (Enhanced Transparency) Bill 2017’, op. cit., p. 9915. 72. Remuneration Tribunal, ‘About us’, Tribunal website. 73. Financial reporting rule, section 27. 74. J McGrath (Assistant Minister to the Prime Minister) ‘Second reading speech: National Broadcasters Legislation Amendment (Enhanced

Transparency) Bill 2017’, op. cit., p. 9915. 75. Nine Entertainment Co, Create: distribute: engage, annual report, Nine Entertainment Co, 2017, pp. 36-43. 76. M Ebeid, (Managing Director, Special Broadcasting Service), Environment and Communications Legislation Committee, Official committee

Hansard, 24 October 2017, p. 152. 77. G Ruddick and N Khomami, ‘Emily Maitlis offered new BBC contract amid row over pay and sexism’, The Guardian, 21 July 2017. 78. M Whyte, ‘How women in media won some pay equality in the 1970s, and why they’re still fighting today’, The Conversation,

15 January 2018.

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commercial networks because those networks knew how much they were earning and offered a few more dollars to poach them’.79 No examples were provided, but a possible unintended consequence of the Bill may be that the national broadcasters lose some highly talented individuals through poaching.

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79. D Atkins, S Johnson and F Whiting, ‘Should the ABC have to reveal the salaries of its highly paid talent?’, The Courier Mail, 19 August 2017, p. 61.