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Fifield describes TV/radio licence fees as a ‘super profits tax’, indicates potential reform

Minister for Communications Mitch Fifield today provided his strongest hint yet that the Coalition is open to further cut licence fees for broadcasters.

Fifield

Fifield: open to licence fee cuts.

In a Sky News interview this morning Senator Fifield was questioned on reports the government would move on the issue in the next budget, telling his interviewer: “[licence fees] were introduced in the late 50s. They were like the original super profits tax in an environment where the only options for people were print, radio, or TV.

“There was no other broadcast media, so TV and radio were in a very strong and dominant position. Obviously things have changed a heck of a lot since then.

“In recognition of the changed landscape, in 2013 the license fees were cut in half. We’ve indicated to both radio and TV that we’re prepared to examine license fees in the context of the coming budget, and that’s what we’re doing.”

The announcement comes the same day the Australian Financial Review reports that the Government was handed a departmental report recommending that the free-to-air TV industry be given relief from its licence fees.

Industry bodies FreeTV and Commercial Radio Australia have been pushing the government, as have a number of TV and radio broadcasters, many of whom reported major write-downs in the value of their licence fees in the most recent financial results.

“The Minister’s comments are very welcome and timely,” said Julie Flynn, CEO of FreeTV. “Licence fees are a key issue for the industry and this is a very important step.  It enables us to continue to invest in transforming our businesses, while continuing to deliver quality Australian programming that viewers value highly.

“Consideration of licence fees in the Budget context is an important recognition of the need to level the economic playing field so we can compete against global players that are unregulated and pay little or no tax in Australia.”

Warner: radio has not received the licence fee reductions TV has.

Warner: radio has not received the licence fee reductions TV has.

Commercial Radio Australia CEO Joan Warner also welcomed the move but noted that TV and commercial radio had been treated differently.

“We have been talking to the current Minister on this issue and had discussions with the former Minister, now Prime Minister,” said Warner.

“We are anticipating another discussion in the very near future and would of course welcome a reduction or full rebate of licence fees for commercial radio operators who are paying up to five times what their fellow commercial broadcasters are in comparable jurisdictions.

“It also should be noted that while TV had a 50% rebate a couple of years ago, commercial radio received no such rebate.”

Many of those arguing for change cite the fact that none of the competition – Google, Facebook and Netflix – pay such fees.

Broadcast licence fees were last cut in 2013 by the Gillard government, passing an effective reduction in TV licence fees from 9% to 4.5% of revenues, before the previous federal election.

The government has also signalled it will look at media reform in coming months, with Fifield stating to Sky News: “I don’t want to let the grass grow in terms of media reform.

“It’s something that has been debated for a long, long, long time. I’ve been in this gig for about four months; I’m keen to bring something to the Parliament early this year.”

Nic Christensen 

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