Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016 - 2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
COMMERCIAL BROADCASTING (TAX) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Communications
Senator the Honourable Mitch Fifield)
COMMERCIAL BROADCASTING (TAX) BILL 2017
OUTLINE
In the 2017-18 Budget, the Government announced a comprehensive package of reforms that
will improve the sustainability of Australia's free-to-air broadcasting sector. Along with the
Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 (Reform Bill), this
Bill forms part of this historic reform.
To assist broadcasters to compete in the modern media environment, the Government will
abolish broadcasting licence fees and datacasting charges and introduce a transmitter licence
tax for the use of broadcast spectrum that more accurately reflects its use. Spectrum is
essential to a digitally networked economy and a major contributor to Australia's economic
and social wellbeing. It is critical infrastructure enabling production for industrial,
commercial, educational and social services. It also establishes similar tax arrangements for
commercial broadcasters as currently apply to other commercial spectrum users.
The purpose of this Bill is to introduce a tax for transmitter licences issued under section 102
of the Radiocommunications Act 1992 that are associated with commercial broadcasting
licences issued under Part 4 of the Broadcasting Services Act 1992.
The tax would be applied to each individual transmitter, associated with the apparatus licence.
The Minister may determine the amount of tax for each individual transmitter. This amount
must not exceed the cap amounts specified in the Bill and the capped amount applies if no
determination is in force. The tax will apply to transmitter licences in place as of 1July2017
and new ones issued on or after 1 July 2017. The tax would be applied on the issue, or
anniversary of a licence. The tax, as proposed under this Bill, would come into legal operation
on a retrospective basis on 1 July 2017, but only if the Reform Bill is also passed and receives
the Royal Assent.
The Government has committed to broader spectrum reform (such as rewriting the
Radiocommunications Act 1992). These tax arrangements are intended to provide certainty for
the broadcasting industry while the reforms are finalised and implemented. Outcomes of these
reforms will be considered in the five year statutory review by the Australian
Communications and Media Authority on broadcast spectrum (as proposed by Schedule 7 to
the Reform Bill). These two processes will inform the Minister on how to transition broadcast
spectrum tax arrangements into the broader spectrum management framework as at July 2022.
As such, the Minister may determine a date of termination for the proposed new tax that
would be established as a result of this Bill.
2
FINANCIAL IMPACT STATEMENT
The tax imposed by this Bill is estimated to have the following impact on underlying cash:
2017-18 2018-19 2019-20 2020-21
Revenue gain ($m) 43.5 43.5 43.5 43.5
3
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Commercial Broadcasting (Tax) Bill 2017
The Commercial Broadcasting (Tax) Bill 2017 (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.
Overview of the Bill
The Bill forms parts of a comprehensive package of reforms announced by the Government
on 6 May 2017 that will improve the sustainability of Australia's free-to-air broadcasting
sector. The other Bill forming part of the package is the Broadcasting Legislation Amendment
(Broadcasting Reform) Bill 2017 (the Reform Bill).
To assist broadcasters to compete in the modern media environment, the Broadcasting
Reform Bill would:
abolish licence fees and data casting charges that are currently payable by commercial
television and radio broadcasters under the Television Licence Fees Act 1964; Radio
Licence Fees Act 1964; Datacasting Transmitter Licence Fees Act 2006; and
disapply the taxation arrangements in the Radiocommunciations (Transmitter Licence
Tax) Act 1983 in respect of commercial television and commercial radio broadcasters
(commercial broadcasters) who hold a transmitter licence issued under section 102 of
Radiocommunications Act 1992 (Radcomms Act).
In that context, the Bill would impose a new tax on transmitter licences issued under section
102 of the Radcomms Act that are associated with commercial broadcasting licences issued
under Part 4 of the Broadcasting Services Act 1992. The tax will be payable both on issuance
of the licence and each anniversary of the day the licence came into force. The proposed new
tax will apply to the relevant transmitter licences in force issued prior to 1 July 2017 and in
respect of new transmitter licences issued on and from 1 July 2017.
The amount of tax payable for each licence will depend on the spectrum that transmitter uses
and the power level of the transmitter. The Minister may, by legislative instrument, determine
the individual transmitter tax amounts, but these amounts must not exceed the individual
transmitter amount caps as specified in the Bill. The administration arrangements associated
with the assessment, and collection and recovery of the new tax are set out in Schedule 6 to
the Reform Bill and the new tax would be administered by the ACMA.
The proposed new tax is intended to be for a period of 5 years, noting that the Minster would
have the power, under clause 11 to the Bill to specify a 'termination time', and no further
taxes would be imposed under the proposed new Act after the termination time. The new tax
is intended to provide certainty for the commercial radio and television broadcasting industry
while the reforms to the Radcomms Act (including transmitter licensing for commercial
broadcasting) are completed. The arrangements for the assessment and collection of the new
tax, including anti-avoidance prohibitions, are set out in Schedule 6 to the Reform Bill.
4
Human rights implications
Australia is a signatory to the International Covenant on Civil and Political Rights (the
ICCPR), the International Covenant on Economic, Social and Cultural Rights (the ICESCR),
and the Convention on the Rights of Persons with Disabilities (CRPD). These three
conventions are listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
This Bill does not engage any of the applicable rights or freedoms. In coming to this
conclusion, specific consideration was given to the following human rights relevant to
broadcasting:
right to enjoy and benefit from science and culture (Article 15 ICESCR);
right to freedom of expression (Article 19 ICCPR);
promote access for persons with disabilities to new information and communications
technologies (Article 9 CRPD); and
right of all persons with disabilities to freedom of expression (Article 21 CRPD).
The effects of the Bill are limited to holders of commercial broadcasting licences. The Bill
also has no impact on any natural persons in the capacity of licensee as only qualified
companies are eligible to hold such licences.
The measure will not affect individuals' ability to enjoy and benefit from culture. The
measure is strictly related to the taxation and licence fees payable by commercial broadcasters
Individuals will not be prevented from taking part in cultural life via the services offered by
the commercial broadcasters.
The measures will not inhibit the rights of individuals to express themselves through any
media. The measure is limited to changes to the transmitter licence tax and will not introduce
any restrictions on content.
The measures will not inhibit the rights of persons with disabilities from accessing
information, exercising their right to freedom of expression, or from taking part in cultural
life.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
5
REGULATION IMPACT STATEMENT
Summary of the measures:
The Bill would impose new transmitter licence tax for commercial broadcasters using
spectrum in the broadcasting spectrum bands leading to revenues of around $40 million per
annum in total.
In addition, the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017
would:
1. Abolish the broadcasting licence fees paid by commercial broadcasters under both the
Television Licence Fees Act 1964 and the Radio Licence Fees Act 1964, from 2017-18
onwards, currently recovering around $125.7 million per year.
2. Abolish the datacasting charges paid by commercial broadcasters under the
Datacasting Charge (Imposition) Act 1998, from 2017-18 onwards, currently
recovering around $1.1 million per year.
3. Abolish the apparatus licence fees currently paid by commercial broadcasters under
the Radiocommunications (Transmitter Licence Tax) Act 1983, currently recovering
around $75,000 per year.
4. Create a transitional support package of $4.6 million per year for the first five years to
ensure that individual broadcasters are no worse off as a consequence of this Bill and
measures 1, 2, 3 and 4.
5. Require the Australian Communications and Media Authority (ACMA) to undertake
and finalise a review of broadcasting pricing arrangements before 30 June 2022.
What are the regulatory impacts associated with these measures?
These measures are expected to have only minor regulatory impacts on businesses. They are
not expected to have any impacts on individuals or community organisations.
The measures would simplify reporting requirements from broadcasters to the ACMA. As the
commercial television and radio licence fees (determined yearly based on revenue) will be
abolished, broadcasters will no longer need to report yearly data to the ACMA.
6
What are the regulatory costs/savings associated with these measures?
Reporting requirements are reduced for broadcasters. This reduces the time for businesses to
complete reporting requests by an estimated 1,710 hours a year, which represents a reduction
in annual average compliance costs of $57,225. This is based on assumptions that:
1. 327 returns are provided every year.
2. Each return requires an estimated five hours to produce.
3. The average hourly wage for an individual in administrative and support services is
$351.
Regulatory burden estimate (RBE) table
Average annual regulatory costs (from business as usual)
Change in Business ($) Community Individuals ($) Total change in
costs organisations cost ($)
($)
Commercial -57,225 0 0 -57,225
broadcasters
1
Weekly earnings for an individual in administrative and support services is 1,304.7:
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6302.0Main%20Features4Nov%202016?opendocument&tabname=Summary&prodno=6302.0&issu
e=Nov%202016&num=&view
7
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum.
ACMA Australian Communications and Media Authority
AIA Acts Interpretation Act 1901
BSA Broadcasting Services Act 1992
LA Legislation Act 2003
Radcomms Act Radiocommunications Act 1992
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Commercial Broadcasting
(Tax) Act 2017.
Clause 2 - Commencement
Clause 2 provides for the commencement of the Bill.
The whole of the Bill, once passed, would commence on 1 July 2017, however this
commencement is conditional upon the Broadcasting Legislation Amendment (Broadcasting
Reform) Act 2017 also receiving the Royal Assent.
The conditional commencement provision is necessary as the imposition of the new tax, as
proposed by the Bill, forms part of a fully integrated and historic package of media reforms. If
the Bill is passed and receives the Royal Assent, it technically would be enacted but it would
not come into operation unless the Broadcasting Legislation Amendment (Broadcasting
Reform) Act 2017 also received the Royal Assent.
Clause 3 - Definitions
Clause 3 sets out the definitions of key terms used in the Bill.
The term, 'associated with a commercial broadcasting licence' would have the meaning given
by clause 4.
The term, 'broadcasting service' would have the same meaning as in the BSA.
The term, 'commercial radio broadcasting licence' would have the same meaning as in the
BSA.
The term, 'commercial television broadcasting licence' would have the same meaning as in
the BSA.
The term, 'indexation factor', for a financial year, would have the meaning given by clause
12.
The term, 'individual transmitter amount' would have the meaning given by clause 8.
The term, 'individual transmitter amount cap' would have the meaning given by clause 9.
The term, 'tax' would mean the tax imposed by the Bill, once enacted.
The term, 'termination time' would have has the meaning given by clause 11.
The term, 'transmitter' would mean a radiocommunications transmitter under the Radcomms
Act. Similarly, the term, 'transmitter licence' would be have the same meaning as in the
Radcomms Act. A transmitter licence is an apparatus licence issued under that Act that
authorises the operation of specified radiocommunications transmitters, or of
radiocommunications transmitters of a specified kind. Commercial broadcasting services, and
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re-transmission of these services, are generally provided by use of a radiocommunications
transmitter licensed under the Radcomms Act.
Clause 4 - Transmitter licence associated with a commercial broadcasting licence
Subclause 4(1) would set out the essential element for when a transmitter licence will be
taken to be 'associated with a commercial broadcasting licence'. A transmitter licence that is
associated with a commercial broadcasting licence is the distinguishing criteria by which
certain transmitter licences will be subject to the new tax.
Specifically, if a transmitter licence was or is issued under section 102 of the Radcomms Act
and the related licence referred to in that section was allocated under Part 4 of the BSA then
that transmitter licence is associated with a commercial broadcasting licence. The ACMA
must issue to a commercial broadcaster who is allocated a broadcasting services bands licence
under Part 4 of the BSA a transmitter licence under section 102 of the Radcomms Act.
In addition, if a transmitter licence was or is issued under section 100 of the Radcomms Act to
a commercial broadcaster for the transmission or re-transmission of services under their
broadcasting services bands licence on the basis of a decision of the ACMA under subsection
34(1) of the BSA, the transmitter licence is associated with a commercial broadcasting
licence.
There a small number of these licences issued to commercial broadcasters while the ACMA
continues to prepare licence area plans under section 26 of the BSA for the licence area. As
licence area plans are finalised, commercial broadcasters will be transitioned onto section 102
licences. The intention is to impose taxes on these commercial broadcasters in the same
manner as taxes are imposed on the commercial broadcasters who hold a transmitter licence
issued under section 102 of the Radcomms Act.
Tax will be imposed on transmitter licences associated with a commercial broadcasting
licence under clause 6. The arrangements for the assessment and collection of the new tax,
including anti-avoidance prohibitions, are set out in Schedule 6 to the Broadcasting
Legislation Amendment (Broadcasting Reform) Bill 2017 (the Reform Bill).
Clause 5 - Extension to external Territories
Clause 5 ensures that the Bill extends to all of the external Territories.
Clause 6 - Imposition of tax
General
Subclause 6(1) provides that if a transmitter licence issued during the period between 1 July
2017 and the termination time (the Minister may determine a time under subclause 11(1) to be
the termination time for the imposition of the tax), and is associated with a commercial
broadcasting licence, then tax is imposed at both the following times while the licence is in
force and before the termination time:
on the issue of the transmitter licence; and
each anniversary of the day the licence came into force.
10
The tax imposed by subclause 6(1) will only apply to transmitter licences issued after the start
of 1 July 2017, and before the termination time, it does not apply to transmitter licences
issued before 1 July which are dealt with by subclause 6(2).
Subclause 6(2) provides that if a transmitter licence was issued before 1 July 2017 and is
associated with a commercial broadcasting licence, then tax is imposed on each anniversary,
after 1 July 2017, of the day the licence came into force during the period where the licence is
in force and before the termination time. This subclause imposes the tax on each anniversary
of the issue of the transmitter licence after 1 July 2017. This reflects the intention that
transmitter licence holders who were issued a licence before 1 July 2017 are also subject to
the new tax for anniversaries which occur after 1 July 2017.
Subclause 6(3) provides that if a transmitter licence associated with a commercial
broadcasting licence ceases to be in force during the period beginning at the start of 1 July
2017 and ending at the termination time and the licence is not renewed, and if the tax were
imposed the day before the licence ceased to be in force was higher than the amount of tax
imposed on the last anniversary, a tax would be imposed when the licence ceased to be in
force.
The imposition of this tax is to account for any variations that may have occurred to the
licence which would have resulted in a higher amount of tax being owed since the last
anniversary. For example, if after the final anniversary and before the transmitter licence
ceases to be in force, the holder varies the licence and the variation would have increased the
amount of tax payable in respect of that licence, the imposition of this tax will allow the
ACMA to collect the difference between the amount of tax that was paid, and the amount that
should have been paid taking into account the variation to the licence. The amount of tax
imposed by this provision will be a pro-rata amount for the period of time the higher amount
would have applied.
Subclause 6(4) provides that for the purposes of paragraph (3)(c), a variation that was made
before 1 July 2017 is to be disregarded.
Transitional
Subclause 6(5) provides that if a person holds a transmitter licence at the start of 1 July 2017
and the transmitter licence is associated with a commercial broadcasting licence, and 1 July
2017 is not an anniversary of the issue of the day the licence came into force, then the tax is
imposed on the holding of the transmitter licence at the start of 1 July 2017.
The imposition of this tax is to provide a one-off mechanism to collect tax for the period
between 1 July 2017 and the next anniversary date of the transmitter licence. As transmitter
licences can be issued on any day of the year, the provision will allow for the collection of the
tax for the period between 1 July 2017 and the next anniversary of the relevant licence. This
amount will be a pro-rata amount based on the number of days between 1 July and the next
anniversary (see subclause 7(4)).
Clause 7 - Amount of tax
General
Subclause 7(1) provides that the amount of tax imposed by subclause 6(1) on the issue of a
transmitter licence is the total of the individual transmitter amounts for the transmitters
11
covered by the licence immediately after the licence came into force. The phrase individual
transmitter amounts for the transmitters is defined in clause 8. While most transmitter licences
only permit the use of single transmitters, there are licences where the licence permits the use
of multiple individual transmitters. This provisions provides that if there are multiple
transmitters on the licence when it comes into force, the amount of the tax is the sum total of
the amounts for the individual transmitters on the licence.
Subclause 7(2) provides that the amount of tax imposed by subclauses 6(1) or (2) on an
anniversary of the day a transmitter licence came into force is the sum total of the individual
transmitter amounts for the transmitters covered by the licence at the start of the anniversary.
The phrase 'individual transmitter amounts' is defined in clause 8. While most transmitter
licences only permit the use of single transmitters, there are licences where the licence permits
the use of multiple individual transmitters. This provisions provides that if there are multiple
transmitters on the licence on the anniversary, the amount of the tax in respect of that licence
will be the sum total of the amounts for the individual transmitters on the licence. This will
ensure that if transmitters are added or removed from a licence, the intended tax will be
imposed on the next anniversary.
Subclause 7(3) deals with determining the amount of tax when a licence covered by the new
tax terminates before the next scheduled anniversary day and there has been a variation in the
licence since the last anniversary. The intention is that if since the last anniversary there was a
variation which would have resulted in a higher amount of tax being owed, that the higher tax
amount is to be collected. In such cases, a pro-rata amount will be collected for the period of
time that the higher tax amount would have been owed. Specifically, subclause 7(3) provides
that the amount of tax imposed by subclause 6(3) on a licence ceasing to be in force, where
there has been a variation to the licence, is worked out using the following formula:
Days in period of variation
Amount of excess
Days in the financial year
The term, 'days in period of variation', in the formula at subclause 7(3) is defined to mean the
period beginning at the start of the day after the first or only occasion on which the licence
was varied, and ending at the end of the day before the licence ceased to be in force.
The term, 'days in the financial year', in the formula at subclause 7(3) means the number of
days in the financial year.
The term, 'amount of excess', in the formula at subclause 7(3) means the amount of excess
tax determined under subparagraph 6(3)(d). The amount of the excess tax is the additional tax
that is imposed as a result of a variation to the licence since the last anniversary day.
Transitional
Subclause 7(5) provides that the amount of transitional tax imposed by subclause 6(5) on the
holding of a transmitter licence at the start of 1 July 2017 is worked out using following
formula:
Pre-anniversary days
Amount of anniversary tax
365
12
For the purposes of the formula at subclause 7(5), the amount of anniversary tax means the
amount of tax that would be imposed by subclause 6(2) on a particular anniversary of the day
the transmitter licence came into force, if it were assumed that 1 July 2017 were that
particular anniversary.
For the purposes of this formula, pre-anniversary days means the number of days in the period
beginning 1 July 2017 and ending at the start of the day of the anniversary of the day the
licence came into force that occurs during the financial year beginning on 1 July 2017.
This subclause provides that the amount of the transitional one-off tax is a pro-rata amount
calculated by reference to the number of days between 1 July 2017 and the next anniversary
of the licence. As the amount of anniversary tax is determined by the amount imposed under
subclause 6(2), it will also apply to the total of the individual transmitter amounts for the
transmitters covered by the licence at the start of 1 July 2017.
Clause 8 - Individual transmitter amount
Subclause 8(1) provides that for the purposes of the Bill the individual transmitter amount for
a transmitter covered by a transmitter licence at a particular time in a financial year is, if a
determination is in force under subsection (2) at the time, the amount worked out under the
determination. If no determination is in force the individual transmitter amount is the
individual transmitter amount cap for the transmitter for the financial year.
This provision reflects that subclause 8(2) provides the Minister with a power to determine by
legislative instrument, subject to upper limits, the amount of the tax for individual
transmitters. If a determination is not in force, then then amount of the tax for individual
transmitters will be the cap for the financial year set out in clause 9.
Subclause 8(2) provides that the Minister may, by legislative instrument, make a
determination for the purposes of paragraph (1)(a). This is the power for the Minister to
determine the individual transmitter amounts that are to be used to calculate the amount of tax
imposed under clause 6 and calculated under clause 7.
There is also a note to this subsection directing readers to clause 13 of the Bill which deals
with the disallowance of a determination. This reflects that there are special disallowance
provisions for determinations made by the Minister under subclause 8(2).
Subclause 8(3) provides that a determination made under subclause 8(2) may provide for
difference amounts in relation to different classes of transmitter, periods, classes of licences,
or licences held by different classes of persons. This provision makes it clear that any
determination made by the Minister may provide for different individual transmitter amounts
for the different categories listed.
Subclause 8(4) provides that subclause 8(3) does not limit subsection 33(3A) of the AIA. This
provision makes it clear that subsection 33(3A) of the AIA applies to the power to make a
determination under subclause 8(2).
Subclause 8(5) provides that subsection 12(2) of the LA does not apply to the first
determination made under subclause 8(2). As the first determination cannot take effect until
the special disallowance period has passed, this is required as the first determination can
commence on 1 July 2017 (refer subclause 13(3)) and be applied retrospectively.
13
Subclause 8(6) provides that the individual transmitter amount for a transmitter covered by a
transmitter licence at a particular time in a financial year must not exceed the individual
transmitter amount cap for the transmitter for the financial year. There is also a note to this
subsection directing readers to clause 9 of the Bill which deals with the individual transmitter
amount cap. This provision makes it clear that the Minister's power to determine the
individual transmitter amounts is constrained by the individual transmitter amount caps set
out in clause 9.
Clause 9 -Individual transmitter amount cap
Subclause 9(1) provides a table to be used to determine an annual individual transmitter
amount cap for the financial year beginning 1 July 2017. The table is a matrix and sets out
annual caps for individual transmitters based on the maximum power that the transmitter is
authorised to operate at under the licence and the frequency band that the transmitter uses.
The table setting the individual transmitter amount caps for the financial year beginning on 1
July 2017 is set out below. For example, to determine the individual transmitter cap for a
medium powered transmitter operating in the UHF band, the amount is the figure in the
medium powered row that corresponds with the UHF column, that amount is $186,611.00.
Individual transmitter amount cap--financial year beginning on 1 July 2017
Item Maximum Cap if Cap if Cap if Cap if
power of transmitter transmitter transmitter transmitter
the operates in operates in operates in operates in
transmitter the AM the FM the VHF the UHF
band band band band
1 Low $40 $405 $18,661 $18,661
2 Medium $365 $4,053 $186,611 $186,611
3 High $3,648 $40,533 $1,866,114 $1,866,114
Subclause 9(2) provides a formula for determining an individual transmitter amount cap for
the financial year beginning 1 July 2018 and later financial years. The formula is as follows:
Previous individual transmitter amount cap Indexation factor
For the purpose of the formula, an indexation factor means the indexation factor for the
financial year and the previous individual transmitter amount cap means the individual
transmitter amount cap for the transmitter for the previous financial year. The indexation
factor is determined under clause 12 of the Bill.
Band
Subclause 9(3) provides the definitions of the various bands for the purposes of this section.
This is required because depending on the frequency band being transmitted, a different part
of the spectrum is used for that transmission. For example, if a transmitter is operating in the
AM band, it will be transmitting in the frequency between 526.6 to 1606.5 kHz.
14
Band
Item A transmitter operates in this ...if the transmitter operates in this
band... frequency range.
1 AM band 526.6 to 1606.5 kHz (inclusive)
2 FM band 87.5 to 108 MHz (inclusive)
3 VHF band 174 to 230 MHz (inclusive)
4 UHF band 520 to 694 MHz (inclusive)
Maximum power of transmitter
Subclause 9(4) provides the definitions of the various transmitter powers for the purposes of
this section. A transmitter licence will specify a maximum power level at which a transmitter
can operate. The power level of a transmitter will be determined based on the maximum level
at which the transmitter can operate. For example, if a licence specified that a transmitter can
operate in the VHF frequency band at a maximum power of 14,000 Watts ERP, therefore the
transmitter would be a medium powered transmitter.
Maximum power of transmitter
Item The ...if the ...if the ...if the ...if the
maximum transmitter transmitter transmitter transmitter
power of a operates in operates in operates in operates in
transmitter the AM the FM the VHF the UHF
is... band, and, band, and, band, and, band, and,
under the under the under the under the
transmitter transmitter transmitter transmitter
licence, the licence, the licence, the licence, the
maximum maximum maximum maximum
power for power for power for power for
the the the the
transmitter transmitter transmitter transmitter
is... is... is... is...
1 Low n/a not more not more not more
than 150 than 150 than 600
Watts ERP Watts ERP Watts ERP
2 Medium not more greater than greater than greater than
than 220 150 Watts 150 Watts 600 Watts
volts CMF ERP but not ERP but not ERP but not
more than more than more than
15,000 15,000 60,000
Watts ERP Watts ERP Watts ERP
3 High greater than greater than greater than greater than
220 volts 15,000 15,000 60,000
CMF Watts ERP Watts ERP Watts ERP
The acronym 'CMF' stands for cymomotive force and is a term well understood by industry.
CMF is expressed in volts and is used to measure the power of a transmitter that transmits at
the AM frequency band. The acronym 'ERP' stands for Effective Radiated Power and is
15
another term that is well understood by industry. ERP is expressed in Watts and is used to
measure the power of a transmitter operating in the FM, VHF or UHF frequency band.
Clause 10 - Persons liable to pay tax
Subclause 10(1) specifies the persons who will be liable to pay tax as imposed by the Bill on
the issue of a transmitter licence. Given that only a commercial radio or television broadcaster
would be eligible to hold the transmitter licences covered by the new tax, they would liable to
pay tax on the issuance of any new transmitter licence.
Similarly, subclause 10(2) sets out who is liable to pay tax imposed by the Bill on the
anniversary of the day a transmitter licence came into force. It will be commercial
broadcasters who held licences at the start of the anniversary of those licences.
Subclause 10(3) specifies that tax imposed by the Bill on the cessation of a licence will be
payable by the person who held the licence immediately before the licence ceased to be in
force.
Subclause 10(4) deals with the persons liable to pay a tax imposed by the Bill on the holding
of a transmitter licence at the start of 1 July 2017. It will be payable by broadcasters who held
transmitter licences at the start of 1 July 2017.
Clause 11 - Termination time
Clause 11 provides that the Minister may, by legislative instrument, determine that a specified
time is the termination time for the purpose of this Bill. The termination time must not be
earlier than the commencement of the determination. No further tax would be imposed after
the termination time. It is expected that if the Minister were to make such a determination in
the future, it would be after five years of its operation, in order to transition the commercial
broadcasters to a spectrum usage charging regime.
Clause 12 - Indexation Factor
Subclause 12(1) provides that for the purposes of this Bill, 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 following formula:
Index number for the reference March quarter
Index number for the base March quarter
For the purposes of the formula, base March quarter means the last March quarter before the
reference March quarter.
For the purposes of the formula, March quarter means the last March quarter before the
financial year.
Subclauses 12(2) and (3) are intended to deal with the correct index number to be used and
the index reference period for the purposes of the indexation factor calculation. Subclause
12(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
16
reference period must be used. However, subclause 12(2) provides that any later publication
of an index number by the Australian Statistician must be disregarded for the purposes of
clause 12.
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Clause 13 - Disallowance of determinations
Scope
Subclause 13(1) outlines that this section applies to ministerial determinations made under
subclause 8(2).
Disallowance
Subclause 13(2) sets out the process for disallowance of the ministerial determinations that
would be made under subclause 8(2). Either House of Parliament may, following a motion
upon notice, pass a resolution disallowing the determination. Notice and timeframe
requirements are set out at subclauses 13(2)(a) and (b).
If a resolution disallowing the determination is not passed by either House, and the
determination is the first one made under subclause 8(2) the determination takes effect
retrospectively at the start of 1 July 2017 (refer subclause 13(3)).
Subclause 13(4) provides that if a resolution disallowing the determination is not passed by
either House and the determination is not the first determination made under subclause 8(2), it
takes effect on the day immediately after the last day upon which such a resolution could have
been passed if it were assumed that notice of a motion to disallow the determination was
given in each House on the last day of the 15 sitting day period of that House mentioned in
paragraph (2)(a).
Subclause 13(5) makes clear that section 42 (disallowance) of the LA does not apply to the
determination. Two notes are included to remind readers that the 15 sitting day notice period
mentioned in paragraph (2)(a), and the 15 sitting day disallowance period mentioned in
paragraph (2)(b), are consistent with paragraphs 42(1)(a) and (b) of the LA, respectively.
Clause 14 - Rebates
Clause 14 provides that the Minister, by legislative instrument, may make rules that make
provisions for rebates of the whole or part of an amount of tax payable by a person. It is
expected that the rebates could be applied, where there is a strong policy rationale, to
specified classes of transmitters or persons, or different periods.
Clause 15 - Act does not impose a tax on property of a State
Subclause 15(1) provides that the Bill, once enacted, would not impose a tax on 'property of
any kind belonging to a State'. Subclause 15(2) provides that the expression 'property of any
kind belonging to a State' has the same meaning as in section 114 of the Constitution.
It is included to address the unlikely event that a State may end up owning the entire
shareholdings in a commercial broadcaster (for example, through a 'bail out' package where a
broadcaster in a particular location was no longer able to operate), and the High Court were to
find that in such circumstances the State included the commercial broadcaster owned by the
State.
This provision is included for consistency with section 114 of the Australian Constitution
which prohibits the Commonwealth imposing taxes on States.
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Clause 16 - Transitional - powers to make legislative instruments
Clause 16 provides that the Minister must not make a legislative instrument under this Act
before the day this Bill, once passed, receives the Royal Assent. This is consequential to
clause 13 which allow the ministerial determination made under subclause 8(2) to have
retrospective commencement.
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