James Paterson (Victoria, Liberal Party) Share this | Hansard source

I am very pleased to have the opportunity to rise tonight, even at this late hour, to contribute to the debate on the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017. One of the first inquiries that I sat on when I first joined the Senate a little bit over a year ago was the Environment and Communications Legislation Committee inquiry into a previous iteration of this bill. I participated with Senator Urquhart and enjoyed listening to her questions. I noted some of the themes of her questions about that package back then being reiterated in the contribution by Senator O'Neill tonight, which I will come to in a moment. I am also now a member with Senator Ludlam on the Senate Select Committee on the Future of Public Interest Journalism, which I think should be described, in the fairest way possible, as the most elaborate fig-leaf exercise for the Labor Party to cover up their lack of support for media reform. Nonetheless, hopefully, it will despite that still produce some positive and useful outcomes.

Firstly I want to acknowledge Senator Ludlam's contribution to this debate because it was a thoughtful and nuanced contribution. Unlike Senator O'Neill's contribution, the words 'Fairfax' and 'Ten' did pass Senator Ludlam's lips. It was as if Senator O'Neill were commenting about the Australian media landscape as it was five years ago, as if she is unaware of all the developments that have happened in the media industry in recent years, how dire things are for media companies and how vital and urgent action now is. I want to particularly single out and recognise a comment that Senator Ludlam made towards the end of his contribution, where he admitted not only that the 75 per cent reach rule is clearly outdated in a modern media landscape and that we should move on from it but also that he could envisage a time—I think he said it might only be five to 10 years away—where the two-out-of-three rule will also become redundant. I agree with him; although I think that time is now. I worry that had Senator Ludlam been here in this parliament when the transition from the horse and buggy to the motor car was taking place he would have said, 'We can't remove the regulations protecting horses and buggies yet. They might still be around for another five or 10 years, so we had better wait until they are really off the scene before we change the regulations.' But I will come to more substantive comments about that in moment.

I want to return to Senator O'Neill's contribution to the debate tonight, because I think it was extraordinary in a number of ways. One of the ways in which she characterised this media reform package was as a 'pro-industry package'. I agree: this is a pro-industry package. What Australia needs is a pro-industry package. If we follow her contribution to its logical conclusion, the Labor Party, in proposing to vote against this package, is anti media industry. They do not want a pro-industry package to pass through this parliament. It echoed the spectacular contribution made by the shadow communications minister, Michelle Rowland, in an interview with Kieran Gilbert on Sky News earlier this week. When it was put to her that all the media organisations in Australia were in favour of this bill and was that not a reason why Labor should consider supporting it, she said, 'They are only supporting it because there is something in it for all of them.' Well, yes, indeed, there is something in it for all of them. It will improve their ability to compete with their new and international competitors. It will improve their viability, and it may stave off or even prevent the collapse of a number of media companies. Indeed it is a pro-industry package and it is indeed true to say, as Michelle Rowland did, that all the media companies will get something out of it.

Senator O'Neill also said that the Labor Party was willing to support this bill on the condition that the two-out-of-three rule abolition was removed from the bill. It is an interesting position to take for a party that is complaining that the media reform package is not sufficiently comprehensive and is piecemeal. The Labor Party's only suggestion to improve a package that they think is not sufficiently comprehensive and is piecemeal is to make it less comprehensive and more piecemeal by removing a fairly fundamental part of the package. It said what it wants is true media reform, and, over and over again, comprehensive media reform, and yet it proposed absolutely nothing that would fit that definition—nothing that would resemble that in any way. The truth is that the only media reform package that is on the table in this debate and in this parliament is the one that the government has proposed. There are no alternatives. None have been provided. We were promised that there might be some alternatives in the future, but the time to act is now. The time to act is not going to be in a few months time or a few years time when one of the Australian media companies that we have all come to love and cherish falls over.

Senator O'Neill and other Labor speakers in this debate are concerned about the impact of the two-out-of-three rule on democracy and diversity and how it may lead to consolidation. They are right. It is true. If the two-out-of-three rule is removed, there may be consolidation in the Australian media industry. In fact, it is quite likely that there will be some consolidation in the media industry. But if I had to choose between consolidation in the media industry that took place because all the outdated regulations were removed and companies that had common interests chose to merge or take each other over and restructure their affairs, thereby making them more efficient and allowing them to continue operating, or the alternative, which would be consolidation by collapse or consolidation by media companies in Australia falling over, I know which choice I would make. It is a fairly easy choice to make.

I would perhaps understand the concern about diversity if we had had this debate in the late 1990s. But the truth is that we are living in a golden age of media diversity. The diverse sources of news in the media and comment and information that I can access now are better than any human has had at any point in history. I can get every opinion under the sun at the click of a button. The perspectives and takes on Australian politics, international affairs and business are more varied than they have ever been. To hold up the two-out-of-three rule as the great protector of media diversity in a golden age of media diversity is, I think, incredibly naive and out of touch with reality. It is so perverse that if you were a media company today, or if you were advising a media company today—let's take Fairfax as an example—and the two-out-of-three rule was an obstacle to you structuring your company in a more efficient way that would allow the ongoing viability of your company, the best advice you could give them would be to stop printing newspapers. If I were advising The Ageif it were my commercial duty to advise them—I would tell them: 'Stop printing newspapers. Deliver The Age on an iPad or deliver The Age online, and you will be able to arrange your affairs in any way you see fit. You will be able to merge with a television company or any other company in the media industry. But if you continue to print the daily newspaper—which is of great value to some people still in this day and age, and which employs many people—all you are doing is tying your own hands behind your back and preventing yourself from structuring your affairs in the most efficient way.' The truth is, of course, that it is not The Age or any other media business that is tying their hands behind their back; it is the parliament and the laws of this nation that are tying their hands behind their back. We have the capacity to address that in this bill.

It is often said that the internet—particularly the arrival of Google and Facebook—is destroying the viability of traditional media. That may be true to some extent. It certainly has taken away what once were the so-called rivers of gold in terms of classified advertising that propped up the media model for many years. But we in this place are aiding and abetting that, wittingly or unwittingly, by allowing companies like Google and Facebook—who, by the way, I think make wonderful companies and excellent services; I am not a constant critic like some in this debate—to have an extraordinary commercial advantage granted to them by the regulatory holiday we effectively give them at the expense of Australian media companies. We tie up Australian television networks, Australian print media companies and, of course, radio businesses with regulation that we could never and would never apply to these companies. The only thing we can really do, if we wish to give them the best fighting chance and the most even playing field, is to remove this outdated regulation.

There are those who come to this place and say, perhaps posturing to the press gallery or their friends in the gallery: 'Gee, isn't it terrible what Google and Facebook are doing to you? I'm on your side. I'm here for you.' Doubt their sincerity and doubt it greatly because if they do that at the same time as opposing this package, what they are doing is voting to make, in relative terms, the Googles and Facebooks of the world much stronger in contrast to Australian media companies.

Also doubt the sincerity of people who come into this place and say that they really, sincerely want stronger controls on gambling advertising and to make sure children are not exposed to gambling advertising during live sport. It is only through this package that that issue will be addressed. Important features of this package have been subject to some criticism in earlier contributions to this debate—particularly the licence fee reductions which allow that to happen. Given that we know the strains and stresses television companies in particular are under, if we remove from them gambling advertising, which is a significant source of revenue, and do not compensate them in any way by also removing or reducing licence fees we would put them under even greater strain and risk their collapse even sooner than perhaps might otherwise be the case. If they are sincere about ensuring gambling advertising does not take place or that children are not exposed to it, it only logically flows that they must make it possible for that to happen by supporting licence fee reductions, which are a key feature of this bill.

Also doubt the sincerity of people who come into this place and say they are friends of regional media. I remember very well participating in the environment and communications committee's inquiry into a bill like this a bit over a year ago. The regional media companies in particular were crying out for legislation to fix the situation they were in. They were desperately asking us to act to help them stave off their financial difficulties. We still have not done so, and the pressure continues to mount on those businesses. For people who say that they want viable local regional media to continue to exist there is really only one option for them today, and that is to support this bill. In the absence of doing so they will perhaps ensure that they do not merge with a larger metropolitan ally or competitor, but they will also ensure that they close on their own terms in just a matter of months.

I have two final points in this vein. Certainly doubt the sincerity of someone who says they are a friend and a fan of the Australian media landscape and uniquely Australian voices in the media landscape. We know that one of the potential buyers for Fairfax Media is a foreign company—a foreign investor. Who knows what they would do with Fairfax Media if they were successful in taking them over? I should say again that I am not a critic of foreign investment in any sphere of the Australian economy; I think it is an overwhelmingly positive thing. I can envisage foreign investment in Australian media which would be very positive. However, there are other people in this chamber who would swear black-and-blue that foreign investment in Australian media is a very dangerous thing. But by blocking this legislation all they are doing is ensuring that the only viable potential bidders for a company like Fairfax are those foreign bidders who are not encumbered by the fact that they already have an Australian presence in other media industries here. If you want to ensure that a company like Fairfax ultimately is taken over or merged with another Australian player, rather than a foreign investor, then the best thing to do is to support this bill.

Finally, I doubt the sincerity of people who come into this place and say that they are fans of private media and that they want to see a healthy commercial media landscape in Australia, because the effect of this bill not passing will be the continued consolidation and shrinking of that private media, and the only thing that will exist in its place, or the only thing that will become much more relatively large in that space, is of course the state funded, government funded media. So when people come in here and use their maiden speeches to rail against the ABC or SBS and use estimates to be critical of those organisations but at the same time fail to support this kind of legislation, all they are doing is aiding the continual decline of private media and effectively increasing the influence of state media.

I would now like to turn to some of the key provisions of this bill. The key elements of the package are, as I have mentioned: the abolition of broadcast license fees for television and radio, which allows them to better compete with other media platforms; the introduction of a price for the use of spectrum by broadcasters that better reflects its use; protecting Australian children by banning gambling advertising during sports broadcasts in children's viewing hours; amendments to the antisiphoning scheme and list; a broadranging and comprehensive review of Australian and children's content; and a $30 million funding package for subscription television to support the broadcasting of women's sports. These reforms will ensure the ongoing production of high-quality Australian content and also strengthen the competitiveness of Australia's broadcasting sector.

The bill also acknowledges the increasing competition the broadcasting sector is facing and that important new measures such as new gambling advertising restrictions will place pressure on broadcasters and must therefore be compensated for. The government's decision to abolish broadcast licensing fees, as I mentioned earlier, and to also make sure that the new restrictions on gambling advertising apply to all platforms—free-to-air, subscription and online—are a recognition of the pressure that broadcasters are under. These changes in fees are significant reforms for the broadcasting industry, and they build on the media reforms that we have already announced and are currently before the parliament that look to abolish the two-out-of-three rule and 75 per cent reach rule.

I would like to particularly single out in this area a point that has been really well made in current and previous inquiries by the TV broadcasters—that is, the license fees they pay in Australia, by world standards, are incredibly high. It is certainly true that prior to what will hopefully be the passage of this bill they have not paid anywhere near a market rate for the spectrum that they use, but they have paid very significant licence fees, far in excess of most similar countries. In fact, many countries in the world have no licence fees at all. It is important that we recognise that these licence fees are in fact a relic of an analog media era and can no longer be justified in an increasingly competitive media environment. The idea that a television station should pay a licence fee for the privilege of reaching Australians when a company like Facebook can and does stream live content to Australians and pay no licence fee is obviously incredibly anachronistic and out of date.

Broadcasters are effectively caught in this pincer movement. Their revenues are flat or declining in real terms, as many advertisers are migrating online, and the on-demand services, which again I think are a really positive development that most Australian consumers are very pleased about, also draw audiences away from traditional broadcast content. Simultaneously costs are rising, and the capacity of broadcasters to contain that further cost growth will be severely limited given their need to invest in programming and technology across multiple media platforms. That is why the government is moving to abolish broadcast licensing fees, which amount to about $130 million per year, starting with the payment that would have been payable in December 2017. But importantly they are a key element of this comprehensive package of reforms, and in the absence of support for the full package of these reforms those licence fee reductions may not be able to happen.

Spectrum pricing is, I think, a really important improvement in the way in which television stations pay for the actual public resource that they us, which is, of course, spectrum. The new spectrum price for television and radio will be set at a total of around $40 million, and the first payment is due to be made in 2017-18. Unlike broadcast licensing fees, the spectrum fee is not based on revenue. Rather the price takes into account the type of transmitter used, the amount and type of spectrum used, and its location. This is a similar approach to that which applies to other spectrum users and appropriately recognises what that public resource they are using is. Overall the vast majority of broadcasters will pay considerably less in spectrum fees than they currently pay in licence fees. This fee relief will enable broadcasters to better compete with other online competitors, invest in their businesses and produce Australian content. However, a small number of broadcasters will face a net increase in overall charges, and the government will support these broadcasters by providing a five-year transition support package to ensure they are no worse off.

Another part of this package that I really welcome is the changes to the antisiphoning scheme and list. My own view is that having a quarantine list of sporting events and other events that can only be broadcast and viewed initially by free-to-air TV networks is going to look seriously out of date in a few years time when many international sporting events start to be bought up, as has already happened, such as with the FA Cup final and the US Masters golf. So I think it is very appropriate that the government starts to recognise this and appropriately opens up more sports to competitive bidding and allows them to be broadcast on a range of platforms, including subscription television. I think this is particularly important when, as technology evolves, the difference between subscription television station and other television stations becomes, increasingly, a very fine difference. When Foxtel, for example, is offering an increasing amount of its content through apps like Foxtel Go and an increasing number of their users are accessing it, how different is it really to businesses like Netflix or Stan?

To conclude, I would just like to return to the fact that these reforms are supported by an extraordinary consensus across the media industry. Greg Hyland appeared before the Select Committee on the Future of Public Interest Journalism, and I asked him if, in his experience of more than 40 years in the media industry, he had ever seen a consensus like this, and, of course, he said no. There has never been a consensus in the media industry like this before, and to miss this opportunity would be a very sad thing. So I hope that all parties in this place consider their positions carefully and ultimately support the government's position.