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2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
BROADCASTING LEGISLATION AMENDMENT
(TELEVISION AND RADIO LICENCE FEES) BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Communications,
Senator the Honourable Mitch Fifield)
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BROADCASTING LEGISLATION AMENDMENT
(TELEVISION AND RADIO LICENCE FEES) BILL 2016
OUTLINE
The Broadcasting Legislation Amendment (Television and Radio Licence Fees) Bill 2016
(the Bill) will amend the Television Licence Fees Act 1964 (Television Licence Fees Act) and
the Radio Licence Fees Act 1964 (Radio Licence Fees Act) to permanently reduce the licence
fees payable by commercial television broadcasting licensees and commercial radio
broadcasting licensees by 25 per cent.
Commercial television broadcasting licensees and commercial radio broadcasting licensees
are required under the relevant Acts to pay broadcasting licence fees. These are levied on an
annual basis as a sliding percentage of the licensee's gross earnings for the particular year. In
relation to television, the maximum rate of licence fees payable is 4.5 per cent of gross
earnings applicable to licensees with revenues in excess of $100 million. In relation to radio,
the maximum rate of licence fees payable is 3.25 per cent of gross earnings applicable to
licensees with revenues in excess of $11.5 million.
The Bill will permanently reduce the rate of broadcasting licence fees by 25 per cent
per annum (effective for licence fees payable from the 2015-16 financial year), giving effect
to a measure contained in the 2016-17 Budget. This fee reduction recognises that the
Australian media market has changed significantly since broadcasting licence fees were first
introduced, with the move to online and on-demand content fragmenting the market for
media services and increasing competition. The Bill will also amend the Radio Licence Fees
Act to permit regulations to be made under the Act for licence fee rebates, mirroring a
provision already contained in the Television Licence Fees Act.
The measures contained in the Bill will increase regulatory certainty for the radio and
television commercial broadcasting industries and enable radio broadcasters and television
broadcasters to more effectively meet the challenges of an increasingly competitive global
environment and invest in Australian content.
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FINANCIAL IMPACT STATEMENT
The amendments in the Bill are estimated to have a cost to Commonwealth revenue of
$163.6 million over the forward estimates (from 2016-17), after tax effects are taken into
account.
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STATEMENT OF COMPATABILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Broadcasting Legislation Amendment (Television and Radio Licence Fees) Bill 2016
The Broadcasting Legislation Amendment (Television and Radio Licence Fees) Bill 2016
(the Bill) is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011. The Bill does not engage any of the applicable rights or freedoms, or otherwise
raise any human rights issues.
Overview of Bill
The Bill comprises three measures. The first measure amends the Television Licence Fees Act
1964 to reduce by 25 per cent the annual licence fee payable by commercial television
broadcasting licensees. The second measure amends the Radio Licence Fees Act 1964 to
implement a 25 per cent reduction in the licence fees paid by radio broadcasters. The third
measure inserts a new regulation making power in the Radio Licence Fees Act 1964 to allow
for radio licence fee rebates.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms. The measures in the Bill
apply only to corporations, as natural persons are not eligible to hold a commercial television
broadcasting licence or radio broadcasting licence.
Conclusion
This Bill is compatible with human rights as it does not engage any of the applicable rights or
freedoms, or otherwise raise any human rights issues.
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 is a formal provision specifying the short title for the Bill, when enacted, is to be
cited as the Broadcasting Legislation Amendment (Television and Radio Licence Fees) Act
2016.
Clause 2 - Commencement
Clause 2 provides for the commencement of the Bill. The provisions specified in column 1 of
the table will commence, or will be taken to have commenced, on the day specified in column
2 of the table.
The whole of the Bill will commence on the day after the Bill receives the Royal Assent.
Clause 3 - Schedule(s)
Clause 3 provides that each Act specified in the Schedule to the Bill is amended or repealed
as set out in that Schedule and any other item in the Schedule has effect according to its
terms.
There is one Schedule to the Bill. Schedule 1 amends the Television Licence Fees Act 1964
(Television Licence Fees Act) and the Radio Licence Fees Act 1964 (Radio Licence Fees
Act).
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Schedule 1--Amendments
Part 1 - Amendments
Radio Licence Fees Act 1964
Item 1 - Section 5
Item 1 amends section 5 of Radio Licence Fees Act by inserting a new subsection (1). This is
a consequential amendment flowing from the proposed insertion of a new subsection (2) -
refer item 2 below.
Item 2 - At the end of section 5
Item 2 inserts a new subsection (2) in section 5. The new provision will create a power for
regulations to be made under the Radio Licence Fees Act to provide for rebates of radio
licence fees.
Proposed subsection 5(2) replicates subsection 5(2) of the Television Licence Fees Act 1964
which permits the regulations to provide a rebate of licence fees. Item 2 ensures consistency
between the two licence fee acts and provides the Government with flexibility in the future in
administering the licence fee regime as it applies to commercial radio broadcasting licensees.
Item 3 - Subsection 6(2)
Section 6 of the Radio Licence Fees Act requires commercial radio broadcasting licensees to
pay to the Commonwealth a licence fee, by way of a tax, which is calculated by reference to
their annual gross earnings from the broadcast of advertisements and other material.
Subsection 6(2A) of the Radio Licence Fees Act sets out a sliding scale of radio licence fees,
with a percentage rate that increases for higher levels of gross earnings.
Item 3 of Schedule 1 to the Bill amends subsection 6(2) by inserting the words, "that is 75%
of the amount" before the text. There is no change to the formulas which are set out in the
Act to derive the relevant percentage of the licensee's gross earnings for a particular
accounting period. The effect of this change is that the licence fee payable is reduced by
25 per cent.
Television Licence Fees Act 1964
Item 4 - Subsection 6(2)
Section 6 of the Television Licence Fees Act requires commercial television broadcasting
licensees to pay to the Commonwealth a licence fee, by way of a tax, which is calculated by
reference to their annual gross earnings from the broadcast of advertisements and other
material.
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Subsection 6(2A) of the Television Licence Fees Act sets out a sliding scale of licence fees,
with a percentage rate that increases for higher levels of gross earnings.
Item 4 of Schedule 1 to the Bill amends subsection 6(2) by inserting the words, "that is 75%
of the amount" before the text. There is no change to the formulas which are set out in the
Act to derive the relevant percentage of the licensee's gross earnings for a particular liability
year. Nor is there any change to the due date of the payment. Similar to the change to be
made by item 3, the effect of this amendment is that the licence fee payable is reduced by 25
per cent.
A 25 per cent rebate in the licence fees payable by commercial television broadcasting
licensees in 2015-16 was provided through the Television Licence Fees Amendment (Licence
Fee Rebate) Regulation 2016. The Bill replaces this temporary rebate and provides for a
permanent reduction in licence fees.
Part 2 - Application and transitional provisions
Item 5 - Application
Item 5 makes clear that the amendments made by Schedule 1 apply to a licence fee that is
payable by a commercial broadcasting licensee or commercial radio broadcasting licensee
after the commencement of the item.
Item 5 will commence on the day after the Bill receives the Royal Assent.
Item 6 - Transitional - licence fee rebate scheme
Item 6 makes clear that a licensee is not entitled to a rebate under Part 4 of the Television
Licence Fees Regulations 1990 for an accounting period for which the fee is payable after the
commencement of the item. This reflects the fact that the permanent licence fee reduction
given effect by the Bill is intended to replace existing rebate arrangements.
Item 6 will commence on the day after the Bill receives the Royal Assent.
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