Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Broadband, Communications and the Digital Economy, Senator Conroy. Can the minister specifically explain how the $250 million rebate for commercial television broadcasters—that is, 33 per cent in 2010 and 50 per cent in 2011—was arrived at? Specifically, are the rebate figures directly related to local content costs incurred by those networks?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

The government will protect Australian content on commercial television by offering licence fee rebates to broadcasters in 2010 and 2011. A rebate of 33 per cent will apply to licence fees payable on revenue earned the period 1 January to 31 December 2010 and a rebate of 50 per cent will apply to licence fees payable on revenue earned in the period 1 January to 31 December 2011. The rebates are just one part of a package of measures to address the structural changes facing free-to-air television at a time when media consumption habits are changing because of the rising use of the internet and as we make the switch to digital television. We make no apology for moving to protect Australian content in this environment. In the Digital dividend green paper, released in January, the government indicated its intention to clear 126 megahertz of spectrum currently used by free-to-air broadcasters for new services. This is a significant microeconomic reform.

14:14:49

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I raise a point of order on relevance. The question was: are the rebate figures directly related to local content costs incurred by the networks? Yes or no? So far the answer has been very boring—nothing new, Minister. Yes or no?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

On the point of order, Mr President. What we now have is a rephrasing of the question from the questioner. The minister has been specifically answering the question dealing with both the licence fee rebate and the issue about rebates for commercial broadcasters. The minister has been specifically dealing with the question that has been asked. But, of course, what we now have from the opposition is a rephrasing of the question with the question now put in the frame: will you answer yes or no? I ask, Mr President, respectfully, that you rule that out of order, because that part was not the original question and is a rephrasing of the original question.

John Hogg (President) Share this | Link to this | Hansard source

I believe that the minister is answering the question. The minister has 52 seconds remaining to add any further information for the questioner.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Thank you. This, as I said, is a significant microeconomic reform and, more importantly, one that those opposite when in government had the chance to deliver and failed to deliver. New communications services enabled by the spectrum release have the potential to significantly boost productivity. Moreover, the sale of this spectrum will generate substantial revenue for the Commonwealth. The government’s decision to offer a temporary rebate on licence fees recognises the unique pressures facing the free-to-air sector. Analysts have recognised that free-to-air television is undergoing a significant structural decline. I can go no further than quote Mr Rupert Murdoch, who told a News Corp shareholder meeting late last year that broadcast stations ‘can no longer be supported solely by advertising revenues’.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. That is, at best, ‘I’m not sure,’ or a no. Why then, Minister, did the announcement state:

… the government will protect Australian content on commercial television by offering a licence rebates to broadcasters in 2010 and 2011.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

As I was just saying, Mr Rupert Murdoch—someone the opposition leader wants to like him—has made the statement when he told a News Corp shareholder meeting late last year that broadcast stations ‘can no longer be supported solely by advertising revenues’. Respected analyst Roger Colman noted last week:

Not only did profitability decline by half for most of the TV networks in fiscal ‘09, but more importantly, their relative share of advertising … has fallen 33 per cent since 2005.

In the face of this structural change and the arrival of the converged media environment, it is imperative that the government protects Australian content. Local content production is expensive. It costs around $800,000 to produce an hour of Underbelly or Packed to the Rafters. In contrast, it costs only $100,000 to buy an hour of Two and a Half Men. (Time expired)

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. ‘I don’t know; I’m not sure’—can someone please help me out of my ministerial misery? Minister, is media analyst Peter Cox right when he says:

I think the problem with the Government’s rebate of some $250 million to the free-to-air television stations is that it doesn’t seem to be supported by any economic logic from either the Minister or the Prime Minister.

Is he right, Minister?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I have already quoted Mr Rupert Murdoch pointing out the structural problem now faced by free-to-air television, but perhaps I could now quote from Chase Carey, chief operating officer of News Corp. He stated:

In broadcasting we have an ad supported business model that does not work.

So I do not know how much further we can go when experts in this sector like Mr Rupert Murdoch and his chief operating officer are saying, ‘The model is broken.’

The rebate is also in recognition of the current high level of licence fees in Australia compared to others countries, such as the US, UK, Canada and New Zealand. For example, in the UK, commercial broadcasters pay an average licence fee of 1.475 per cent; in Canada, 1.372 per cent; in New Zealand, 0.11 per cent; and in the US, 0.04 per cent. Compare that to Australia. Even after this cut we are still the most— (Time expired)