Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Now that we are in the committee stage I want to ask, in respect of the amendment that Senator Griff will be moving shortly, in general terms on the issue of licence fees, has the government done any modelling or considered at any level within government the prospect of obtaining revenue from Facebook and Google given their disruptive effect on the media landscape, the advertising revenue they have taken away from traditional media outlets and the fact that they do not pay for or create content in the way free-to-air networks do? Has that been considered? Is any modelling being done in respect of that?

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I assume this is in the context of your earlier contribution where you were talking about the concept of a 'turnover tax'—I think that was how you phrased it. I will just make the general point that modelling of tax measures is something that, if it were to be done, would be done in the Treasury portfolio. What I can tell you is what the government, through the Treasury portfolio, has done to ensure the protection and the enhancement of our revenue base.

We are as one with you, I am sure, in believing that multinational companies operating in Australia should pay their fair share of tax. To this end, the government has pursued a number of measures to ensure the companies pay their proper share of tax. Firstly, the multinational anti-avoidance law, which commenced operation on 1 January this year, is designed to capture companies that seek to avoid a taxable presence in Australia. Secondly, the diverted profits tax announced in the 2016-17 budget and scheduled to commence from 1 July next year is designed to stop multinationals artificially diverting profits from Australia to another country. And, thirdly, extending the GST to cover digital products and services imported from overseas, noting, of course, as we do federally, all of this revenue flows to the states and territories.

By the by, I should point out that the financial impact of these measures is already accounted for in the budget bottom line and there are a number of other things that the government is seeking to pursue. The government is very much of the view that multinationals should pay their fair share of tax when they operate in Australia. The government has already taken and is in the process of taking further measures.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I thank the minister for his answer. Perhaps I can just take a different tack. I understand that this is a matter ultimately for the Treasury if there is to be a new revenue-raising measure, but, as Minister for Communications, does Senator Fifield acknowledge that the playing field is not level between the free-to-air networks and companies such as Facebook and Google. These companies act almost as aggregators, soaking up all of the content produced by traditional media outlets—outlets that have paid for their journalists and paid for their newsrooms. Facebook and Google can just disseminate that at no cost to themselves and can get the benefit of advertising revenue. Meanwhile, you have the free-to-air networks suffering that loss of advertising revenue because their content is being disseminated quite freely; it is causing a haemorrhaging of their traditional commercial models. To restate the question: does the minister have some sympathy for the fact that traditional media outlets, the free-to-air networks, have suffered significantly in commercial terms at the hands of Facebook and Google, and that they do not have the same business model in terms of expenses involved in creating news content and programming content?

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I absolutely recognise that the environment for free-to-airs is more challenging and there is greater competition than there was five, 10, 15, 20 or 30 years ago. I agree that the playing field is not level. That is one of the reasons why we are looking to get rid of the 75 per cent audience-reach rule and one of the reasons why we are looking to get rid of the two-out-of-three rule. This will enable Australian media organisations to configure themselves in ways to better support their liability, so they can be in a better position to compete with global players. It is one of the reasons why we do have the measure that is before us: to reduce licence fees for radio and TV by 25 per cent. As I indicated in my earlier contribution, when you combine that with the licence fee reductions that TV previously had, it is a 62.5 per cent reduction in licence fees that the free-to-airs will have had in recent times. I should observe that the free-to-airs do have support in the consumer interest in the form of the anti-siphoning regime. So, yes, the landscape has changed significantly. Licence fee reductions are in part an effort to address that, as is the proposed abolition of the 75 per cent audience reach rule and the two out of three rule.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am grateful to the minister for his answer. It was a good answer but it was also a very clever answer because it actually avoided the direct question. Does the minister concede that there is some element of unfairness that Facebook and Google can soak up the content that the free-to-air networks pay for—programming content and the like? That is something that can be aggregated by Facebook and Google at very little or no cost to themselves and they get the benefit of the advertising that comes to them because of the eyeballs that attach to Facebook and Google in the absence of having to pay for content in the way the networks already do.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Senator Xenophon, I was not endeavouring to be anything other than remorselessly relevant to your question before by recognising that the operating environment is very different, that the 'over the top' providers, as they are referred to, have a different business model and that there are obviously different requirements on free-to-air TV which not all providers have. So I certainly acknowledge the differences.

Stirling Griff (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

by leave—I move Nick Xenophon Team amendments (1) and (2) on sheet 7933 together:

(1) Schedule 1, item 3, page 3 (line 11) omit "75%", substitute "0%".

(2) Schedule 1, item 4, page 3 (line 14) omit "75%", substitute "0%".

I have already outlined in some detail the reason for these amendments. As my colleague Senator Xenophon mentioned, there is absolutely no justification for our free-to-air broadcasters to continue to be hit with licence fees, especially when digital platforms are raking in billions of dollars and paying a pittance by way of Australian taxes. This issue has been ongoing for too long and it is well and truly time that the government bit the bullet and showed some genuine leadership and genuine support for our local TV networks and production industry.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I should also indicate that, at the time of the budget announcement of a 25 per cent reduction in television licence fees, the government did indicate that we would look at the possibility of further reductions in broadcast licensing fees as part of a broader package of reforms which would possibly include consideration of the pricing of broadcast spectrum. I think it is important to recognise that spectrum is a public asset and that there should be an appropriate contribution for the use of that asset.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Labor wants to place on record that we understand much of the sentiment behind the amendments moved by Senator Griff. However, we are unable to support this commitment at this time.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

As I outlined in my speech in the second reading debate, the Greens will not be supporting this amendment. We think it is not particularly smart to reduce the fee as outlined in the original bill without getting anything specific in return in terms of content commitments. We do not believe that a licence has no value and, therefore, we do not agree with reducing the fee altogether.

Question negatived. Bill reported without amendments; report adopted.