Government gives broadcasters $127m licence fee holiday
The Turnbull government has announced it will remove licence fees for commercial free-to-air television and radio broadcasters for the 2016-17 financial year as a one-off relief measure.
According to Minister for Communications and the Arts, Mitch Fifield , the one-off removal of the fees is worth around $127m to the industry and comes after the media reforms stalled in the Senate.
While the government was unable to get its media reforms through the Senate – with both houses of parliament now on recess until August 8 – it has the power to pause licence fees on a year-by-year basis without changing the law.
The news also comes two weeks after Ten went into administration, with Fifield calling on opponents of the media reforms to “wake-up” and “show they care about the media industry“.
“This urgent relief will assist Australian businesses that are under competitive pressure from foreign tech companies and online streaming services,” Fifield said of today’s announcement.
“Labor’s political gamesmanship in the Senate means the media industry is forced to wait another 40 days until Parliament returns to consider media reform legislation.
“Permanent financial relief will be provided through the government’s Media Reform package, which has the unanimous support of the industry, if passed by the Senate as a whole.”
The media reforms, which included the removal of broadcasting licence fees, restrictions on gambling advertising, amendments to the anti-siphoning scheme and a repeal of the two out of three and 75% audience reach media ownership laws, passed in the House of Representatives last week, despite Labor’s opposition.
Today, Fifield added: “The Turnbull Government has a holistic and comprehensive reform plan to secure a viable future for Australian media organisations. In contrast the Labor Party has no plan, other than to engage in needless partisanship as they have done with school funding and NDIS funding.”
Rowland said the Government “had started to pick away” at its own package.
“The Minister for Communications, Senator Mitch Fifield, states that the package has the unanimous support of industry and must be dealt with as a whole, even as he undermines that approach.
“Where is the support for the subscription television industry? Where is the relief for the independent production sector? Where is the ‘community dividend’ for the Australian public? Nowhere to be seen.
“Aside from its unequal treatment of various industry groups, this incompetent Government is now robbing the public purse of a return on broadcasters’ use of the spectrum.
“It is remarkable that the Turnbull Government came away from Parliament last week with nothing to show on media reform, despite having Labor’s support for all but one of their proposed measures.
“Minister Fifield has only himself to blame for his inadequate attempts at media reform, yet his most recent media release mentions Labor six times. If the Minister focussed less on playing the blame game and more on working constructively with Labor, he may have achieved something by now,” she said.
However, Free TV Australia chairman, Harold Mitchell welcomed today’s announcement.
“This provides welcome relief for our industry, which is challenged by increased competition from large multinational tech and media companies.
“In the internet age, it makes no sense to continue to impose the world’s highest licence fees when these foreign media tech companies pay nothing,” he said.
“Licence fee relief is critical for broadcasters to invest and transform their businesses. It is now up to the Senate to do its part in permanently replacing the licence fee with a spectrum charge.
“It is crucial for Australian jobs and our ability to continue creating great local programming that the parliament passes the media reform package in August.
“If we are serious about diversity of Australian voices, we have got to get serious about comprehensive media reform. We cannot allow local media companies to continue being strangled by out-dated media ownership laws.”
According to an announcement on the ASX, Nine has now increased its earnings forecast.
“This [licence fee reduction] will result in a reduction in licence fees accrued by Nine in FY17 and paid in FY18 of approximately $33m.
“At the time of Nine’s H1 FY17 result in February, the company guided to a full year Group EBITDA of $158m to $187m, being the range of equality analysts’ forecasts at the time. In light of this announcement, and trading since the H1 result, FY17 Reported Group EBITDA is now expected to be between $200m and $210m.
“Nine will continue to advocate for the passage of the entire media reform package which will see the permanent abolition of the Broadcast Licence Fee to be replaced by a spectrum charge of c$11.3m over a five year period,” the statement said.
Southern Cross Austereo also welcomed the relief in an announcement on the ASX.
The group said it was saved $11.8m in the current financial year, which were not included in the trading update provided on 19 May.
“The Government’s announcement confirmed its proposal that broadcasting licence fees will be permanently replaced in the 2018 and subsequent financial years by a spectrum tax to be introduced by the Government’s recently announced Media Reform Package.”
The media reforms package will appear in the Senate after the winter break.
