Paul Fletcher (Bradfield, Liberal Party, Minister for Urban Infrastructure) Share this | Hansard source

I move:

That this bill be now read a second time.

The Commercial Broadcasting (Tax) Bill 2017 implements a key component of the government's Broadcast and Content Reform Package—the introduction of tax on the use of broadcasting spectrum. Along with the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 (the Broadcasting Reform Bill), this bill will help to modernise media regulation and position the Australian media industry to deal with existing and future challenges more effectively.

With the abolition of broadcasting licence fees and datacasting charges contained in the Broadcasting Reform Bill, the new taxation arrangements in this bill will provide significant overall fee relief for broadcasters as part of an integrated package of reforms. This relief will enable broadcasters to better compete with online competitors, invest in their businesses and produce Australian content.

The bill recognises that spectrum is a valuable resource, essential to a digitally networked economy and a critical enabler of services. Like all scarce public resources, it needs to be managed and its commercial value recognised. The bill balances industry concern about remaining competitive, the obligations placed on them by government, and the need to value spectrum appropriately. These tax arrangements complement the longer term reform to the spectrum management framework the government committed to in the 2015 Spectrum Review.

Importantly, the government's Broadcast and Content Reform package—including the new spectrum tax—has the unanimous support of all sectors of the media industry. To ensure these important reforms are implemented as a cohesive package, the commencement of this bill will be contingent upon the enactment of the Broadcasting Reform Bill.

I now turn to the substantive measures in this bill.

Spectrum tax

The new tax structure set out in this bill is intended to provide certainty to broadcasters while the government implements longer-term reform to the spectrum management framework. The bill is intended to implement key reforms in the overall media package. As such, the tax, as proposed under this bill, would come into legal operation on 1 July 2017, but only if the Broadcasting Reform Bill is also passed and receives the royal assent. In the event the bill is not enacted by 1 July 2017, the tax will come into effect from that date on a retrospective basis. The retrospectivity of the tax in that event ensures that it is payable from the commencement of the 2017-18 financial year and is consistent with the removal of the existing apparatus tax imposed on broadcasters and the abolition of broadcasting licence fees and datacasting charges, as proposed by the Broadcasting Reform Bill. This is intended to provide for a clean switchover from the old fee and tax arrangements to the new tax structure.

The bill sets out upper caps for the tax which are based on classes of transmitters, and also includes a ministerial determination power to set lower tax amounts and provide for rebates.

The new spectrum tax for television and radio is expected to raise a total of around $40 million in revenue per annum. Unlike the antiquated broadcasting licence fees, the spectrum tax is not based on revenue. Rather, the amount takes account of the power level of the transmitter, the particular band of spectrum used and the amount of spectrum used. The use of parameters to determine a tax is a similar approach to that which applies to a number of other spectrum users, such as land mobile operators.

The tax methodology also supports regional broadcasters with the use of the power parameter. Generally, lower powered transmitters are situated in regional Australia, as distinct from high powered transmitters in metropolitan areas. Given that there is less demand for spectrum in regional Australia, use of this spectrum attracts a significantly lower fee. For example, a broadcaster in regional Queensland would pay 99 per cent lower taxes for their use of the same amount of spectrum than a broadcaster in Brisbane.

Overall, the vast majority of broadcasters will pay considerably less in spectrum tax than they currently pay in broadcasting licence fees and charges. This fee relief will enable broadcasters to better manage their business operations and compete in this rapidly evolving market.

However, a small number of broadcasters will face a net increase in overall charges. Through the broadcasting reform bill, the government will support these broadcasters to ensure that they are no worse off by providing a five-year transitional support package ending 30 June 2022.

This bill is an essential plank in the government's overall media reform package, unabashedly designed to support the Australian media industry. The government has also kept its eye on the long game, making sure spectrum is recognised as a valuable resource. As technology advances we will no doubt draw more heavily on this resource.

Changing taxation arrangements is rarely an easy path, yet industry has done its part by engaging constructively and in good faith to help shape this package. These reforms have the unanimous support of industry and are the end result of extensive consultation with the sector. The package provides certainty for five years on the taxation arrangements, and beyond that this government does not expect large increases in taxes for broadcast spectrum.

Together with the broadcasting reform bill, this bill will secure a strong and viable future for the media industry in Australia. Parliament has before it an historic opportunity to deliver comprehensive and holistic reform for the Australian media to ensure that strong Australian voices continue to be heard.

I commend this bill to the chamber.

Debate adjourned.

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