Second reading – Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017

Mr PITT (Hinkler—Assistant Minister for Trade, Tourism and Investment) (10:03): Firstly, I would like to acknowledge the work of the shadow minister, who I have served on committees with previously and who certainly has a very keen interest and a lot of knowledge around the subject matter. I rise to speak on the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017. There is no doubt that the current media rules are outdated. Much of the legislative framework was developed in an analog era when the industry had only three main media platforms—newspapers, TV and radio. This was well before smartphones, social media, streaming services et cetera—it just goes on and on and on.

Australians can now access media content from a wide variety of sources: streaming on-demand services like Netflix and music services like Spotify and Pandora and, for news, the choice of online sources is almost endless—and, can I say, not always accurate. As well as the traditional metropolitan and regional newspapers, there are the likes of The Guardian, The Daily Mail and The Huffington Post all vying for your clicks. This is not surprising considering the Reuters Institute claims that close to half of all Australians identify online news and social media as their main source of news. The internet has provided opportunities for new platforms and business models and the pressure on established operators has increased significantly. Newspaper circulations have shrunk significantly in recent years, and many have introduced online digital subscriptions in an attempt to retain the readership base.

Although the majority of viewing time remains devoted to broadcast television on in-home TVs, in 2015 free-to-air audiences for metropolitan broadcasters fell by five per cent. The average number of hours people were watching broadcast TV fell below 90 hours per month, or three hours per day, in the first quarter of 2015. This is the first time that it has dropped below 90 hours since monitoring was introduced in 1991. To put this into perspective, as at November 2016 more than 5.75 million Australians aged over 14 had access to a Netflix subscription.

The legislation before us today will support the viability of our local media organisations as they face increasing global competition in a rapidly changing digital landscape. I do want to talk about what I consider to be some of the key components of this bill. Firstly, it abolishes the 75 per cent reach rule. Secondly, it abolishes the two-out-of-three cross-media rule. Thirdly, it introduces higher local content obligations on regional commercial television licensees who change their control or ownership arrangements.

The 75 per cent reach rule has the practical effect of preventing mergers between any of the predominantly metropolitan commercial TV broadcasting licensees, including Seven, Nine and Ten, and any of the regional commercial TV broadcasting licensees such as Prime, WIN and Southern Cross, because such a transaction would result in a person controlling commercial TV licences whose combined licence area populations would substantially exceed the 75 per cent threshold. This rule does little to support media diversity, as regional viewers essentially receive the same commercial TV programming as metropolitan viewers, due to affiliation of content supply agreements. In addition, two metropolitan licensees now stream versions of their services across Australia, including into regional markets. Removing the 75 per cent reach rule would, subject to competition law and, of course, other relevant law, allow consolidation within the commercial TV sector and greater scale of operations, therefore allowing commercial broadcasters to compete in an environment where audiences can readily access premium content online.

The two-out-of-three cross-media control rule prohibits a person controlling more than two out of three regulated media platforms: a commercial television broadcasting licence, a commercial radio broadcasting licence and an associated newspaper in any one commercial radio licence area. This rule regulates the traditional media platforms of commercial television, commercial radio and associated newspapers, but it does not take into consideration the changing media landscape where consumers access news content from alternative sources such as online, and they are doing that right now.

While these two measures are to be abolished, the coalition government is maintaining other diversity rules, including the five-and-four rule, with at least five independent voices in metro areas and four in the regions; the one-to-a-market rule, where a licensee can control only one TV licence in a market; and the two-to-a-market rule, where a licensee can control no more than two radio licences in a market. The Australian Competition and Consumer Commission will retain its powers to scrutinise mergers and acquisitions, and it will be asked to update its guidelines accordingly. Media transactions are also subject to regulatory assessments in relation to foreign investment under the Foreign Acquisitions and Takeovers Act 1975 and Australia’s foreign investment policy.

The third key component of the legislation is increased local programming. This is vitally important to regional communities in Australia, particularly ones like those in my own electorate of Hinkler. My electorate is fortunate to have two commercial TV networks, two daily regional newspapers, a number of community papers and both commercial and community radio stations, as well as our good friends at the ABC. Last year, Southern Cross Austereo and Nine announced that in 2017 they would broadcast 15 dedicated local Nine News bulletins to viewers in their regional markets in Queensland, southern New South Wales and regional Victoria. The bulletins will be rolled out progressively, starting in February, first in Canberra and then in Wollongong, with the other markets to follow. More than 110 staff will be employed by Nine in the regional news division. This will include Wide Bay. I believe that this new bulletin is a matter of weeks away from launching in my local region.

Ensuring local content is maintained and increased after a change of ownership or a merger was a key outcome of the Nationals media reform working party, which I was fortunate enough to chair. Local content is key to ensuring all Australians are informed, educated and entertained. Locally produced regional content ensures people are informed about what is happening in their own communities. As well as contributing to the social and economic fabric of a community, local content is particularly important when emergency services need to communicate public safety messages. Mr Deputy Speaker Mitchell, as you might know, we had very large floods in my region in 2013. During those floods the various local media organisations were an important conduit to ensure that people had up-to-date information, whether it was about road closures, river height monitoring, where to get emergency help or which evacuation centres were open.

We should not forget that some 34 per cent of Australians live outside the greater capital cities, and they deserve to have a voice. Regional Australia is the engine room of the nation’s economy, producing 67 per cent of Australia’s total export earnings. Around 45 per cent of tourism expenditure occurs in areas outside of Australia’s capital cities. Broadcasting regional stories into the capitals also helps build social cohesion and informs people about issues that affect all Australians, such as food security and water supply. Small regional businesses rely on their local broadcasters to advertise their products and services and would struggle to pay the big city advertising rates.

Regional communities must be encouraged to shop local rather than buy online and to support the local economy and local jobs. Every Christmas, I run my own Shop Local campaign to encourage the community to support those local businesses during the festive season. There are approximately 8,541 small businesses within the Hinkler electorate. Small and medium businesses contribute some $340 billion to the economy and, across Australia, small businesses employ more than four million people. Regional newsrooms are also an important training ground for young media professionals. Many of Australia’s most talented reporters attribute their success to having been thrown in at the deep end, at the start of their career, in a regional newsroom.

The media reform bill will introduce high local-content obligations on regional commercial television licensees who change their control or ownership arrangements. These new obligations would apply to the majority of regional free-to-air commercial TV broadcasters who, as a result of a change in control known as a ‘trigger event’, become part of a group of commercial broadcasting licensees whose combined licence area populations collectively exceed 75 per cent of the Australian population. This ensures that there are minimum local content requirements in nearly all regional areas following a trigger event, including those where there are none currently.

The Broadcasting Services Act currently requires regional commercial television broadcasting licensees in aggregated markets and Tasmania to provide approximately 120 points of material of local significance per week to local areas within the licence area. Material of local significance is material that is broadcast to a local area and relates directly to either the local area or the licence area. The aggregated markets include the following licence areas: northern New South Wales, southern New South Wales, regional Victoria, eastern Victoria, western Victoria and regional Queensland. Under the current system, one minute of material of local significance is worth one point and one minute of news that relates directly to the local area is worth two points.

In the absence of a trigger event, the practical effect of these provisions—including the existing 720 point requirement over a six week timing period—will be maintained under the amended local programming obligations contained in the bill. Six months after the occurrence of a trigger event, the bill will increase local programming requirements for affected regional commercial television broadcasting licensees in aggregated markets and Tasmania by 30 points per week and introduce local programming requirements for affected regional commercial television broadcasting licensees in non-aggregated markets. These include the following licence areas: Broken Hill, Darwin, Geraldton, Griffith and the Murrumbidgee Irrigation Area, Kalgoorlie, Mildura, Sunraysia, Mount Gambier south-east, Mount Isa, remote and regional Western Australia, the Riverland, South-West and Great Southern, and the Spencer Gulf.

The new section will require licensees to provide approximately 60 points of material of local significance per week to each local area, with a minimum of 45 points per week. Information supplied to the Australian Communications and Media Authority by relevant licensees up until 2014 indicates that many licensees significantly exceed their programming requirements and some broadcasters operating in the non-aggregated regional markets provide local programming despite no regulatory obligation to do so.

This bill will also introduce a new local programming points system for licensees affected by a trigger event, and each minute of a legislated amount of local programming that relates to the licence area would accumulate one point. Each minute of local programming that comprises news specific to the local area would accumulate two points, and each minute of local programming that comprises news specific to the local area and is filmed within the local area would accumulate three points. This proposed point system is the most straightforward method of incorporating an incentive for filming in local areas into the local programming obligations. It is based on a similar points system that commercial broadcasters in aggregated markets are already familiar with. The proposed arrangements will also militate against overly centralised approaches to local news—for example, news broadcasts being filmed out of central locations without significant engagement with the local area in which it is broadcast.

The bill will require licensees to provide the Australian Communications and Media Authority, ACMA, with an initial report on their compliance with the obligations 18 months after a trigger event and a second report one year later. In order to evaluate the extent to which the bill achieves its objectives, the ACMA will review the operation of the new local program provisions within two years following the commencement of those additional obligations. Changes to the antisiphoning scheme will ensure that iconic events, such as the Olympics, the Commonwealth Games, NRL and AFL premiership matches and the Ashes, remain on the list. The number of events on the current antisiphoning list is between 1,200 and 1,300 per year. Many of these events are no longer broadcast on free to air and only attract a small audience, so no longer warrant being on the list.

The bill will abolish licence fees, recognising that the Australian media market has changed significantly since broadcasting licence fees were introduced. Fees and charges placed on commercial broadcasters are no longer warranted or sustainable, particularly as their competitors do not face the same fees. The introduction of a transmitter licence tax and the abolition of broadcasting licence fees and datacasting charges will result in the vast majority of broadcasters paying considerably less in terms of their overall fee and tax burden. A small number of broadcasters in regional areas are projected to experience an increase in their tax liability. To provide these broadcasters with time to adjust to the new tax arrangements, the government will provide transitional support payments over five years. The proposed payments are based on the difference between broadcasting licence fees paid through the 2015-16 financial year and the amount of tax projected to be paid under the proposed new interim tax.

In closing, under the current rules, established media operators do not have the flexibility to respond to increasing financial pressures by adapting to the changing media landscape, including through mergers with other TV broadcasters or other associated newspaper or radio broadcasters. This legislation will allow media businesses to gain the scale necessary to compete in an increasingly fragmented and global media environment while ensuring that Australians continue to have access to a diversity of sources of news and information. Most importantly, it retains, and in some cases increases, local program content for regional communities. In the final seconds, can I acknowledge the former member for Hinkler, Paul Neville, who was extensively involved in the original legislation during the nineties. I would say to Paul, as he is well aware, that the world has moved on and we do need to make changes in the best interests of the people. We want to be broadcasting things that are important to our community. I commend the bill to the House.