Budget 2016: pay TV industry hits out at licence fee cuts

The pay-TV industry has hit out at licence fee cuts for the commercial networks, saying taxpayers will “foot an unconditional handout” of approximately $150m.

The pay-TV industry has hit out at licence fee cuts for the commercial networks, saying taxpayers will “foot an unconditional handout” of approximately $150 million.

The Australian Subscription Television and Radio Association said the move amounted to “corporate welfare” and another “privilege” granted after the government left the anti-siphoning regulation untouched.

“ASTRA is deeply disappointed the government has chosen to add to an already large deficit by providing television proprietors with tax cuts,” ASTRA chief executive Andrew Maiden said.

Effective in the 2015-16 financial year, the government has raised the possibility of another cut later this year.

A cut to licence fees will lift the collective earnings of the three main broadcasters by an estimated $150 million.

Currently, fees are levied as a sliding percentage of revenue — at a top rate of 4.5 per cent for commercial television licensees who earn $100 million or more, and 3.25 per cent for commercial radio licensees who earn $11.5 million or more.

“In exchange for paying licence fees, Australian free-to-air broadcasters enjoy a legislated ban on competition, guaranteed access to broadcasting spectrum and the world’s most protected market for sports broadcast rights,” Mr Maiden said.

“There should be no reduction in licence fees without a corresponding reduction in the privileges and protections from competition that free-to-air television networks have amassed over decades.

“Thirty years after serious efforts began to eliminate protectionism, few industries enjoy greater structural advantages than free-to-air television, and even fewer expect corporate welfare as changing technology and consumer choices challenge their privileged position.”

A statement by Communications Minister Mitch Fifield said fees will be reduced to enable a “more competitive environment” as traditional media providers come under siege from new forms of viewing and a generation of video streaming services.

Led by Foxtel, the pay-TV industry has lobbied hard to achieve a reduction to the anti-siphoning list, which enables Seven, Nine and Ten to bid for media rights before Foxtel.

A proposal would see the list shortened; few international events would stay. Previously, ASTRA has pointed out that the scheme applied to Foxtel alone and not internet-based TV services like Netflix and telcos.

Currently, these players are exempt from the rules despite Optus last year buying English Premier League rights.

Foxtel is jointly owned by News Corp (publisher of The Australian) and Telstra.