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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
NATIONAL BROADCASTERS LEGISLATION AMENDMENT
(ENHANCED TRANSPARENCY) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Communications
Senator the Honourable Mitch Fifield)
NATIONAL BROADCASTERS LEGISLATION AMENDMENT
(ENHANCED TRANSPARENCY) BILL 2017
OUTLINE
Outline
The National Broadcasters Legislation Amendment (Enhanced Transparency) Bill will amend
the Australian Broadcasting Corporation Act 1983 (ABC Act) and the Special Broadcasting
Services Act 1991 (SBS Act) to provide more transparency in how the national broadcasters
allocate Government funding in relation to salary and allowances paid to employees, and
payments to on-air talent contractors (i.e. a contract for performance on television and/or
radio) where the total amounts paid exceed $200,000 annually.
Background
Australian Broadcasting Corporation
The Australian Broadcasting Corporation (ABC) was established as an independent statutory
authority under the Australian Broadcasting Corporation Act 1983 (ABC Act). The role and
functions of the ABC are set out in its Charter under section 6 of the ABC Act. The ABC is
Australian's national broadcasting service whose principle function (amongst others) is to
provide programs that contribute to a sense of national identity and inform and entertain, and
reflect the cultural diversity of the Australian community
Whilst the ABC has editorial independence, it is accountable to the Parliament through annual
reports, corporate plans, financial and performance audits, and appearances before
Parliamentary Committees.
Special Broadcasting Service
The Special Broadcasting Service (SBS) was established as an independent statutory authority
on 1 January 1978, under the Broadcasting Act 1942. SBS was subsequently reconstituted as
a corporation with the passage of the Special Broadcasting Service Act 1991 (SBS Act).
The role and functions of SBS are set out in its Charter under section 6 of the SBS Act. SBS is
Australia's primary multicultural broadcaster whose principal function is to provide
multilingual and multicultural services that inform, educate, and entertain all Australians, and,
in doing so, reflect and promote Australia's multicultural society.
Whilst SBS has editorial independence, it is accountable to the Parliament through annual
reports, corporate plans, financial and performance audits, and appearances before
Parliamentary committees.
Funding
Both the ABC and SBS receive Government funding on a triennium basis. In addition, SBS
receives extra revenue through advertising.
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Amendments
Section 80 of the ABC Act provides for matters to be included in the Corporation's annual
report. Section 73 of the SBS Act makes similar provision in respect of the SBS's annual
report.
The new annual reporting obligations would require the ABC and SBS to each report details
of annual salaries and allowances of ABC and SBS employees, and amounts paid to 'on-air
talent' in excess of $200,000. 'On-air talent' is intended to have broad meaning and be
platform neutral, in recognition of the changing media landscape. The proposed reporting
measures are intended to capture on-air talent (above the specified monetary reporting
threshold) across all platforms used by the national broadcasters including online and
podcasting services such as ABC iView and SBS On Demand. This reporting threshold
amount will be indexed annually in line with the Consumer Price Index (CPI) figures
published by the Australian Statistician.
Specifically, the Bill will amend the ABC Act and the SBS Act to require the national
broadcasters to include the following information in their annual reports:
(a) for employees:
- combined amount of salaries and allowances paid to the employee,
- the names of the employee where the total amount of salary and allowances paid
to the person exceeds the applicable reporting threshold for the reporting period;
and
- the positions held by the person during the reporting period; and
(b) for on air talent:
- the total amount paid to the individual, and name of each individual, who is a
party to one or more on-air talent contracts (a contract for performance on
television and/or radio) if the total amount paid to the individual in the reporting
period was more than the applicable reporting threshold for that period,
- the nature of the services performed under each contract.
These amendments are primarily intended to increase the financial reporting transparency of
the national broadcasters. The measures will complement the Government's existing policy
that public agencies and entities should be transparent in how Commonwealth funding is
allocated and spent.
It will also allow for the scrutiny of gender pay gaps within the national broadcasters with an
aim to encourage the closure of such gaps.
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FINANCIAL IMPACT STATEMENT
The measures in this Bill are expected to have no financial impact.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
National Broadcasters Legislation Amendment
(Enhanced Transparency) Bill 2017
This 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.
Overview of the Bill
The Australian Broadcasting Corporation (ABC) is established under the Australian
Broadcasting Corporation Act 1983 (the ABC Act). The Special Broadcasting Service (SBS)
is established under the Special Broadcasting Service Act 1991 (the SBS Act).
The ABC and SBS are Australia's two main publicly funded broadcasters (collectively, the
national broadcasters).
The national broadcasters provide broadcast and digital media services that span diverse
social, cultural and geographical audiences throughout Australia, including independent news
and information services.
The Bill would amend the ABC Act and the SBS Act to require the national broadcasters to
include in their annual reports:
(a) for employees:
- combined amount of salaries and allowances paid to employees,
- the names of employees where the total amount of salary and allowances paid
to those persons exceeds the applicable reporting threshold for that period; and
- the positions held by the person; and
(b) for on air talent:
- the total amount paid to, and name of each individual, who is a party to one or
more on-air talent contracts (a contract for performance on television and/or
radio) if the total amount paid to the individual in the reporting period was
more than the applicable reporting threshold for that period; and
- the nature of the services performed for each contract.
The applicable reporting threshold for the first period beginning after commencement of the
Bill is $200,000 Australian dollars. This amount is indexed for subsequent periods by
reference to the Consumer Price Index figures published by the Australian Statistician. The
indexed amount for subsequent periods is worked out in accordance with a specified
formulae.
The amendments proposed by the Bill will apply to an annual report for a period beginning
after the commencement of the Bill.
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Human rights implications
This Bill engages the right to privacy as contained in Article 17 of the International Covenant
on Civil and Political Rights (the ICCPR). Article 17 recognises the right that no one shall be
subjected to arbitrary or unlawful interference with his or her privacy, family, home or
correspondence. Article 17 does not set out the reasons for which the guarantees in it may be
limited, however, limitations contained in other articles, for example, those which are
necessary in a democratic society in the interests of national security, public order, the
protection of the rights or freedoms of others, might be legitimate objectives in appropriate
circumstances. In any event, limitations on privacy must be authorised by law and must not be
arbitrary.
The Bill engages the right to privacy as it would require the publication, in the national
broadcasters' annual reports, of the name and total salary/allowance or remuneration details of
employees, and on-air talent, if the amount paid is above a particular threshold. To the extent
that the Bill restricts or limits the right to privacy, it does so for a legitimate objective, and is
reasonable, necessary and proportionate.
The proposed reporting requirement is a necessary and a legitimate objective. There is a
strong public interest in ensuring the Australian people can scrutinise the spending by
publicly funded national broadcasters for the engagement of on-air talent contactors and
employees. The amendments that would be made by the Bill will allow the public to hold the
national broadcasters to account regarding the spending of public monies, and achieving
appropriate value for money, in relation to remuneration for employees and on-air talent. The
amendments would provide a lawful basis for disclosure of this information, which will allow
for this public scrutiny on these high-earners. The publication of the names, positions and
combined amount of salary and allowances paid to employees, and equivalent information for
on air talent, is consistent with the prohibition on arbitrary or unlawful interference with a
person's privacy, insofar as it is reasonable, necessary and proportionate to achieving the
legitimate end sought.
The publication of de-identified and potentially aggregate information about these employees'
and salaries and allowances, and the payments made to contractors in key on-air roles, is
considered inadequate because it would not provide the transparency required to not only
allow the public to see how its money is being spent, but also in identifying if there is a
gender salary gap across similar roles or level of talent. This reporting obligation will allow
the public to have visibility of how proactive the national broadcasters are in closing any
identified gender salary gaps.
The proposed reporting requirement is targeting the highest paid employees and on-air talent.
In the case of the ABC, together these employees represented just over three per cent of total
staff as at 30 June 2017. By definition, this cohort consumes a disproportionately higher slice
of overall employee expenditure than lower tiers of employee. This Bill will provide for more
detailed scrutiny of this area of high expenditure and for better assessments as to whether the
ABC and SBS are efficiently using taxpayers' money.
The details that are required to be published are limited to the names of the employee or
individual, the position(s) held during the reporting period (or nature of services performed,
on the case of contractors) and the total amount of the salary/allowance or remuneration paid
during the reporting period. No further details in relation to these persons are required to be
published under the Bill. Publication of the employee or individual's name will allow the
Australian public to identify the person and the role they perform, and assess whether the
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national broadcasters have achieved appropriate value for money in relation to the spending of
public monies. Accordingly, the amendments are considered reasonable and proportionate to
the objective of promoting public transparency and scrutiny and reducing the gender salary
gap.
Ultimately, the Bill will make the employment and specific contractual decisions of the
national broadcasters in relation to employees and on-air talent more transparent, and ensure
that those broadcasters are more accountable to the Australian public. These principles of
transparency and scrutiny are important principles of a healthy democratic society.
Conclusion
The Bill is compatible with human rights because to the extent that it may limit or restrict the
right to privacy, those limitations are reasonable, necessary and proportionate.
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the National Broadcasters
Legislation Amendment (Enhanced Transparency) Act 2017.
Clause 2 - Commencement
Clause 2 provides for the commencement of the Bill. The Bill would commence on the day
after it received the Royal Assent.
Clause 3 - Schedules
Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended or
repealed as set out in the applicable items in that, and any other item in a Schedule has effect
according to its terms.
There are two Schedules to the Bill, each comprising two parts.
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SCHEDULE 1--AMENDMENT OF THE AUSTRALIAN BROADCASTING
CORPORATION ACT 1983
The Australian Broadcasting Corporation (ABC) is a body corporate that is enshrined in
legislation by virtue of the Australian Broadcasting Act 1983 (ABC Act). Section 6 of the
ABC Act sets out the tenets of the ABC, in the form of a Charter.
Section 7 of the ABC Act establishes the ABC Board of Directors (the Board). Section 8 of
the ABC Act sets out the duties of the Board. The Board consists of the Managing Director,
the Chairperson, the staff-elected Director and four to six other Directors (section 12 of the
ABC Act).
Section 80 of the ABC Act requires the Board to include a number of pieces of information in
its annual report on the ABC that is given to the Minister for the purposes of section 46 of the
Public Governance, Performance and Accountability Act 2013 (PGPA Act).
The amendments to the ABC Act set out in Schedule 1 would require the ABC Board to
report on a broader range of matters in its annual report given to the Minister, including the
combined salaries and allowances of ABC employees, and payments to on-air talent
contractors where the total annual amounts exceed the specified monetary threshold.
Part 1 -- Amendments
Item 1 - Subsection 3(1)
Item 1 would insert three new definitions into subsection 3(1) of the ABC Act.
The term, indexation factor, has the meaning given by proposed section 80B (refer item 3).
The term, index number, in relation to a quarter, means the All Groups Consumer Price Index
number, being the weighted average of the 8 capital cities, published by the Australian
Statistician in respect of that quarter.
The term, reporting period, means the ABC's reporting for the purposes of the PGPA Act.
Currently, that reporting period is the annual period commencing on 1 July and ending on
30 June.
Item 2 - Section 80 (heading)
Item 2 would adjust the heading of section 80 to accommodate a new section that details more
specific matters that are required to be included in the ABC's annual report (see item 3
below).
Item 3 - After section 80
Item 3 would insert two new sections.
Proposed section 80A would require the Directors of the ABC Board to include individual
salaries and allowances of employees and individuals, who are party to one or more on-air
talent contracts, in the annual report, where the total amount paid is in excess of the applicable
reporting threshold, as determined by proposed subsection 80A(6). The ABC is required to
publish in the annual report, in the case of employees, the names of relevant employees and
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individuals, the total amount of salary and allowances paid during the reporting period and the
position or positions held by the individuals during the reporting period.
For on air talent, the ABC would be required to report the names of relevant persons, the total
amount paid during the reporting period and for each contract, the nature of the services
performed for the Corporation by the individual under the contract.
The publication of the names, positions and combined amount of salary and allowances paid
to employees, and equivalent information for on-air talent, is necessary to achieve the
legitimate Government objective of enhanced transparency and reducing the gender salary
gap.
Proposed subsection 80A(2) would exclude lump sum amounts paid in respect of an ABC
employee's unused leave entitlements where the employee is terminated, for the purposes of
calculating the employee's total remuneration.
Proposed subsection 80A(3) would define an 'on-air talent contract'. An on-air talent contract
is not a contract of employment. It is a contract that is entered into between the ABC and an
individual. The contract engages the individual to perform services for the ABC, including
appearing on a television program, or speaking or performing on a radio program. These
typically are people in key on-air roles, but who are not employees.
Proposed subsection 80A(4) would provide that, for the purposes of determining the
applicable reporting threshold amount, an amount in a foreign currency will be converted into
Australian currency.
Proposed subsection 80A(5) would clarify that the conversion of foreign currency into
Australian currency would be done at the exchange rate applicable at the time of payment.
Proposed subsection 80A(6) would set the value of the applicable reporting threshold. For the
first reporting period after the commencement of the subsection, the amount prescribed would
be $200,000 Australian dollars. For future reporting periods, the amount prescribed is to be
calculated using the formula set out in proposed subsection 80A(7), which accommodates
indexation.
Proposed section 80B sets out the formula for calculating the indexation factor. The
indexation factor for a financial year is the number calculated, to 3 decimal places (rounding
up if the fourth decimal place is 5 or more), using the stated formula.
Proposed subsections 80B(2) and (3) outline the correct index number to be used and the
index reference period for the purposes of the indexation factor calculation.
Subsection 80B(3) provides that if the Australian Statistician changes the index reference
period for the Consumer Price Index (CPI), then only the index number published in terms of
the new index reference period must be used. However, subsection 80B(2) provides that any
later publication of an index number by the Australian Statistician must be disregarded for the
purposes of the section.
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Part 2 -- Application provisions
Item 4 - Application of amendments -- annual report
Item 4 would provide that the amendments made by the Bill would apply to annual reports
that relate to a period that begins after the commencement of the Bill. For example, if the Bill
passes in the midst of the 2017-18 reporting period, the amendments would only take effect
for the purposes of ABC's annual report for the following full reporting year of 2018-19.
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SCHEDULE 2--AMENDMENT OF THE SPECIAL BROADCASTING SERVICE ACT
1991
The Special Broadcasting Service Corporation (SBS) is a body corporate that is enshrined in
legislation by virtue of the Special Broadcasting Service Act 1991 (SBS Act). Section 6 of the
SBS Act sets out the tenets of SBS, in the form of a Charter.
Section 7 of the SBS Act establishes the SBS Board of Directors (the Board). Section 9 of the
SBS Act sets out the role of the Board, while section 10 sets out the duties of the Board. The
Board consists of the Managing Director, the Chairperson and three to seven other
non-executive Directors (section 8 of the SBS Act).
The affairs of SBS are to be managed by the Managing Director (sections 14 and 15 of the
SBS Act), in accordance with any policies determined, and directions given, by the Board.
Section 73 of the SBS Act requires the Board to include a number of pieces of information in
its annual report on SBS that is given to the Minister for the purposes of section 46 of the
PGPA Act.
The amendments to the SBS Act set out in Schedule 2 to the Bill would require the Board to
report on a broader range of matters in its annual report given to the Minister, including the
combined salaries and allowances of SBS employees, and payments on-air talent contractors
whose total annual earnings exceed the reportable thresholds.
Part 1 -- Amendments
Item 1 - Section 3
Item 1 would insert three new definitions into section 3 of the SBS Act.
The term, indexation factor, has the meaning given by proposed section 73B (refer item 3).
The term, index number, in relation to a quarter, means the All Groups Consumer Price Index
number, being the weighted average of the 8 capital cities, published by the Australian
Statistician in respect of the particular quarter.
The term, reporting period, means SBS's reporting for the purposes of the PGPA Act.
Currently, that reporting period is the annual period commencing on 1 July and ending on
30 June.
Item 2 - Section 73 (heading)
Item 2 would adjust the heading of proposed section 73 to accommodate a new section that
details more specific matters that are required to be included in SBS's annual report (refer
item 3).
Item 3 - After section 73
Item 3 would insert sections 73A and 73B.
Proposed section 73A would require the Directors of the Board to include individual salaries
and allowances of employees and individuals, who are party to one or more on-air talent
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contracts, in the annual report, where the total amount paid is in excess of the applicable
reporting thresholds, as determined by proposed subsection 73A(6).
SBS will be required to publish in the annual report, in the case of employees, the names of
relevant employees and individuals, the total amount of salary and allowances paid during the
reporting period and the position or positions held by the individuals.
For on air talent, SBS will be required to report the names of relevant persons, the total
amount paid during the reporting period and for each contract, the nature of the services
performed for SBS by the individual under the contract.
The publication of the names, positions and combined amount of salary and allowances paid
to employees, and equivalent information for on-air talent, is necessary to achieve the
legitimate Government objective of enhanced transparency and reducing the gender salary
gap.
Proposed subsection 73A(2) would exclude lump sum amounts paid in respect of an
employee's unused leave entitlements where the employee is terminated, for the purposes of
calculating SBS employee's total remuneration.
Proposed subsection 73A(3) would define an on-air talent contract. An on-air talent contract
is not a contract of employment. It is an on-air talent contract that is entered into between SBS
and an individual. The contract engages the individual to perform services for SBS, including
appearing on a television program, or speaking or performing on a radio program.
Proposed subsection 73A(4) would provide that, for the purposes of determining the
applicable reporting threshold amount, an amount in a foreign currency will be converted into
Australian currency. Proposed subsection 73A(5) would clarify that the conversion of a
foreign currency into Australian currency would be done at the exchange rate applicable at the
time of payment. This provision is included in recognition of the possibility that SBS may
enter into contracts with on air talent that require payment in foreign currency.
Proposed subsection 73A(6) would set the value of the applicable reporting threshold. For the
first reporting period after the commencement of the subsection, the amount prescribed is
$200,000 Australian dollars. For future reporting periods, the amount prescribed is to be
calculated using the formula set out in proposed subsection 73A(7), which accommodates
indexation.
Proposed section 73B sets out the formula for calculating the indexation factor. The
indexation factor for a financial year is the number calculated, to 3 decimal places (rounding
up if the fourth decimal place is 5 or more), using the stated formula.
Proposed subsections 73B(2) and (3) outline the correct index number to be used and the
index reference period for the purposes of the indexation factor calculation.
Proposed subsection 73B(3) would provide that if the Australian Statistician changes the
index reference period for the CPI, then only the index number published in terms of the new
index reference period must be used. However, subsection 73B(2) would provide that any
later publication of an index number by the Australian Statistician must be disregarded for the
purposes of the new section.
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Part 2 -- Application provisions
Item 4 - Application of amendments--annual report
Item 4 would provide that the amendments made by the Bill, would apply to annual reports
that relate to a period that begins after the commencement of the Bill. For example, if the Bill
passes in the midst of the 2017-18 reporting period, the amendments would only take effect
for the purposes of SBS's annual report for the following full reporting year of 2018-19.
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