Ministers for the Department of Communications and the Arts

Senator the Hon Mitch Fifield

Minister for Communications

Minister for the Arts

Manager of Government Business in the Senate

ABC RN Breakfast with Sarah Dingle

13 January 2016

E & OE

Subjects: media reform, Australia Post, television classification, arts funding

DINGLE:

2016 will be a big year for the media landscape. At least that's what Communications and Arts Minister Mitch Fifield is hoping. He says Australia's media laws are outdated, but we're still waiting to see what he wants to do about it. He's also dealing with changes made late last year to postage prices, M rated TV restrictions and arts funding. Minister welcome to Summer Breakfast.

FIFIELD:

Good to be with you Sarah.

DINGLE:

Minister you've hit a few speedbumps in your push for media reforms but you did say we'd see your plans in the New Year. It's the New Year now, how much longer to we need to wait?

FIFIELD:

Well people just need to be patient a little bit longer Sarah. I'm keen to introduce into the Parliament in the first part of this year media laws which will reflect the world that we currently live in. Australians by virtue of technology are accessing media in different ways. And what that means is that the media laws that we currently have are gradually being rendered redundant by both technology and the choices that gives consumers.

DINGLE:

Well how much longer is a little bit longer for us to know the details? Has this gone to Cabinet yet?

FIFIELD:

Look Sarah I don't ever comment on what has or hasn't gone to Cabinet. But I'm keen to introduce legislation to the Parliament as soon as possible. I have had discussions at the end of last year with my crossbench colleagues, with my Coalition colleagues, also with the Opposition, to get a bit of a line from them as to the sorts of media reforms that they're open to. What I don't want to do is introduce a package into the Parliament that won't have the support of the Parliament. I want to make sure that this opportunity that we have, given there are very open minds across the Parliament, that we take advantage of that.

DINGLE:

It has been reported that one of the current rules in your sights is the 'Reach Rule'. Which prevents mergers between regional and free to air networks. Will we see the 'Reach Rule' ditched this year?

FIFIELD:

The 'Reach Rule' and also the 'Two out of three rule', as it's known, are the two that I am particularly looking at. What I'm told and what I hear from various players in media markets is that they want the freedom to configure themselves the way that they best think suits their business. And that's particularly important for regional operators who want to get scale. And the best protection for local news content, for instance, is to have businesses that are viable, that want to provide that content and are determined to provide it.

DINGLE:

What about requirements that they provide that local content though. We know that any abolition of the 'Reach Rule' will prompt a flurry of mergers and acquisitions but what about protections specifically put in place to protect regional news content.

FIFIELD:

Well at the moment in a number of markets there are license conditions attached to television which require a certain level of local content, including local news content. Any reform in this area in relation to the 'Reach Rule', I think the Parliament would expect that we do have protections for local content. And that would be protections for the existing local content. We wouldn't want to see a situation where, in anticipation of the opportunity for mergers, that media organisations reduced their local content. So we have to make sure that legislation was drafted in such a way to prevent that from happening.

DINGLE:

Well going to Australia Post now you have said you're all about the consumer when it comes to media reform. What about the experience of the consumer when it comes to Australia Post. The cost of posting a letter went up 30 cents at the start of the year or 80 cents if we want the delivery speed we're accustomed to, which is 1-4 business days. How long is this going to keep Australia Post viable for?

FIFIELD:

Well Australia Post is the ultimate example of digital disruption in my portfolio. On the one hand you've got NBN which is a terrific project which is going to give new opportunities for individuals and businesses. On the other hand you have Australia Post. And the world that we're living in is dramatically changing. I can remember when my grandmother used to get the train into town to pay her electricity bill. Over time she was persuaded to use Australia Post. And if she was still with us today she'd no doubt be paying those bills online. So Australia Post's letter volumes are falling dramatically. They've dropped by 1.4 billion since 2008. Which means that it's now at about 1995 levels in terms of postal volumes. So what we've seen in 2014-15 is that the letter losses are now outstripping the parcel businesses capacity to cover those. So 14-15 we had a $222 million loss for Post. And there are a range of measures that management have put in place, including the price rise, which seek to get Australia Post back into the black. But it's really important to emphasise that although the price of a stamp has gone up to a dollar that the concession stamps will be frozen at 60 cents for the 5.7 million concession card holders in the nation.

DINGLE:

That's not going to help small businesses though, it's more than a doubling of the price of a letter delivered in 1-4 business days just in a matter of weeks. This is really going to hurt their businesses.

FIFIELD:

Well interesting point is that as well as the increase in the cost of the stamp we're also introducing a two speed letter business.

DINGLE:

Small businesses do need letters delivered by certain times though, they're not going to embrace a slower delivery service.

FIFIELD:

Well the interesting point is that the two speed letter service was actually introduced for business in 2014 and 70 per cent of business mail now goes at that slower speed. So there are options there with Australia Post for businesses depending on their needs. If a day or two doesn't make a difference then they have that option. If speed matters then they have the option of paying a bit more for that particular service. But the reality is Australia Post letter volumes are tumbling. It's not fair for taxpayers to be asked to subsidise the Australia Post business. At the moment taxpayers don't put a single dollar of subsidy into Australia Post. We don't want to be in a situation where that happens. So Australia Post in taking some, what I think, are prudent and practical measures to get the business back into the black.

DINGLE:

Are you satisfied with those measures or will we see further deeper changes to the structure of Australia Post this year?

FIFIELD:

Well Australia Post management have already embarked on a significant change program. There have been efficiencies introduced. Australia Post is providing essentially the same services with fewer staff. We have the introduction of the two speed mail service. We have the introduction of the increase of the price of a stamp. And what that will see is about $323 million of efficiencies for Australia Post through to 2017-18. The increase in the price of a stamp will also go to Licensed Post Offices, those 2,900 businesses around Australia who said that they needed a helping hand. And what this will do is see an extra $75 million go to those Licensed Post Offices, something in the order of about $25,000 per year. Those businesses and lots of people in regional Australia have been calling for support for those LPO's.

DINGLE:

Well Minister lets go to another part of your portfolio. Changes to the Commercial TV Code of Practise last month mean that M and MA15+ programs can now be shown earlier. And your Liberal colleagues are amongst those with concerns about this. Won't this expose younger children to more confronting content? Why are these changes necessary?

FIFIELD:

Under the legislated arrangements there are what are known as 'Codes' in the television industry which are developed by the industry and registered with the independent regulator, The Australian Communications and Media Authority. Early last year the free to air TVs indicated that they would like to see a new code introduced. There was a period of public consultation and the independent regulator was satisfied that there had been appropriate consultation and that there was an appropriate protection for younger people in relation to the new TV code. That code was registered late last year and is now in force. It's important to recognize that this is a code which is developed by the industry in consultation with the independent regulator. The Government, and I as Minister, don't have a role in the development of the code and cannot direct ACMA what to do in relation to this. But you're right, some colleagues have expressed concern that the new code brings the M broadcast time forward by an hour to 7:30pm and also that the MA15+ broadcast time comes forward by 30 minutes to 8:30pm. What I've done is to write to the independent regulator to say that it's important for them to review the operation of this code and any complaints over the next 12 months and to then report back to me. But there are some important protections. There's the parental lock, which enables parents to lock out particular categorised programs so that the kids who might grab the remote switch on but can't access those programs. So there is an important role for parental supervision, But I recognise that we want to make sure that the free to airs don't use this change in an inappropriate way. And the independent regulator will report back to me in 12 months.

DINGLE:

Well just briefly you also hold the arts portfolio of course. December's mid-year budget update cut $10 million from Screen Australia. Diverted $35 million from Screen Australia property sales to big Hollywood studios. Life is going to be harder for smaller Australian productions isn't it?

FIFIELD:

We do make significant contributions in the arts. There have been some efficiencies which were announced in the Mid-Year Economic Review. We put about $100 million a year to Screen Australia and the Australian Film, Television and Radio School. We also provide about $123 million in offsets to the domestic film industry, which leverages about a billion of production.

DINGLE:

These are big cuts though. For a small industry these are big cuts.

FIFIELD:

Well there are reductions we have required, regrettably, across a range of portfolios, savings to help towards the important task of budget repair. We have, as you mentioned, made some grants to secure two feature films from overseas. The new Thor and the new Alien movies. Effectively what we've done through those grants was to give a grant that would be the equivalent of increasing the Location Offset from 16 and a half per cent to 30 per cent. That's something that has been done by successive governments of all persuasions. And in the case of these two particular films it will bring about $300 million in offshore investment to Australia and create about 3,000 jobs. And these are good things for the domestic film industry. Would I like to do more to support the domestic film industry? Absolutely, and as a relatively new Minister for the Arts of about 4 months standing, I'm engaging with the sector to see how they think that we can better support the industry.

DINGLE:

Minister we'll have to leave it there. Thank you for your time this morning.

FIFIELD:

Thanks indeed Sarah.

Media contact: Justine Sywak | 0448 448 487 | Justine.sywak@communications.gov.au

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