Report: Govt to lower licence fees

2016-04-28_1429

Next week’s federal budget is “expected to slash the $153 million in annual licence fees” for free to air networks, according to a media report.

The Australian suggests networks will be getting good news in Tuesday’s budget, with a reduction (but not abolition) of the 4.5 per cent of their revenue they currently pay.

A spokesman for Communications Minister Mitch Fifield said: “The government has indicated that it will examine the issue of licence fees in the context of the budget. The government does not comment on speculation in relation to what may be decided in the budget.”

Seven CEO Tim Worner recently told a Senate hearing “We’re paying licence fees that are far in excess of any other jurisdiction in the world. Governments in other jurisdictions have moved some years ago to address this.

“We’ve shown already with the last lot of licence fee reductions that more than 100 per cent of it will go back into the production of local content. We will see hundreds if not thousands of new jobs created because of the amount of local production that we can undertake,” he said.

“We simply cannot now. We have things that are parked waiting at an amber light. We just do not have the money to fund them.”

Nine and TEN management will front a Senate hearing committee today on media reforms.

Plans for media reform will stall if Malcolm Turnbull calls a July 2 election, but would resume if the Coalition was returned.

7 Comments:

  1. Its not broken down in their annual reports, but if you consider the dramatic reductions in costs for overseas content deals – mainly because these no longer rate on Australian TV – while overall FTA costs are fairly constant, the proportion going to Australian content is increasing significantly. There is more local content now then ever before. Admittedly – against the preferences of a lot of the commenters here – a lot of it is going to sport and reality, but frankly from on a cost-revenue basis thats what works when you consider FTA is trying to appeal to the masses and not exclusively the more sophisticated viewer on this site. It still creates jobs and enhances a local industry.

    • Secret Squïrrel

      The networks’ collective shenanigans with shows starting later than the advertised times, delaying broadcasting seasons for months or years and, bizarrely, refusing to play the final eps of some show’s seasons have led to less people watching these dramas live. This results in the networks moving the shows around their schedule, often with little communication as to where or why, and consequently, even lower ratings.

      I haven’t said one word against the networks spending more of their money on sport or reality – that, as you say, is what gives them the best return on their investment.

      Again, you claim that lower license fees will create jobs (in TV production) but fail to accept that this means that there will therefore be less jobs created where the govt might’ve otherwise spent that money; eg a new hospital, training & education, indigenous health, whatever.

      • I’m pretty sure you’ll find the cause has very little to do with scheduling and far more to do with viewers simply having more choice. Like many industries disrupted by the Internet viewers are fragmenting and niches that would otherwise be watching FTA can now have alternatives. Regarding your last point I’m happy to debate with you on “Economics Tonight” rather than this site where I keep my points relevant to TV but suffice to say taken to its logical extreme your point is Government shouldn’t make any tax or spend changes as it takes a dollars from somewhere else. Second taxes should be fair – what’s fair about Google, facebook, Apple and netflix making transfer payments to Ireland for “intellectual capital” to avoid paying corporate tax here?

        • Secret Squïrrel

          I am in complete agreement with you regarding large companies (not just tech) using accounting sleight-of-hand to avoid paying their fair share of tax here. However, that is not the topic of debate and you have again conflated things that are not the same – TV license fees with either the mining tax, or with the legal (if arguably immoral) reduction of taxable income by global corporations.

          In fact your entire discourse here and on other articles has consisted of using false analogies to set up straw men for you to knock down, interspersed with specious arguments about unrelated matters.

          I just think that if anyone wants to use a public resource, they should pay a fair price for it. We could perhaps argue about what a fair price (not a “reverse tariff”) is but I’m not going to.

          If a TV network wants to use 7 MHz of RF, they should pay for it. It’s as simple as that.

  2. License fees are a joke. What other industry has “reverse tariffs” – allowing foreign companies to come here employ not a single person, pay no tax (GST or corporate) and not assist the local production industry in any way while FTA are slugged with what amounts to a 60% corporate tax rate. Ten made no profit and still pays about $35m in license tax. Voters hated the mining tax on miners who are exporting our precious resources overseas for minimal royalties and should be similarly against a tax that slugs our local industry compared to foreign competitors and who are offering a free service for which they no longer earn “super” profits due to the unfair playing field.

    • Secret Squïrrel

      It’s pretty obvious that you have a vested interest in this. Why should the TV networks be given valuable public spectrum for free just so that they can sell us health insurance and stuff from Harvey Norman? The telcos pay for their share.

      Network Ten reported a profit for the first-half of this FY. Their poor financial predicament is mostly of their own making. The taxpayer should not be subsidising poor decision-making. The mining tax was to replace the existing taxation method with one that took into account profitability. We don’t know whether the voters “hated” the tax or not.

      It is a fallacy to say that reducing license fees will create jobs. It may create jobs in TV production but will take them away from where that money would otherwise have been spent.

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