Explanatory Statement
Commercial Broadcasting (Tax) Act 2017
Commercial Broadcasting (Tax) (Transmitter Licence Tax Rebate) Rules 2020
Issued by the Authority of the Minister for Communications, Cyber Safety and the Arts
Purpose
The Commercial Broadcasting (Tax) (Transmitter Licence Tax Rebate) Rules 2020 (the Rules) are made by the Minister for Communications, Cyber Safety and the Arts under section 14 of the Commercial Broadcasting (Tax) Act 2017 (the CBT Act).
The purpose of this instrument is to provide rebates to holders of commercial television and radio broadcasting licences of the transmitter licence tax imposed under the CBT Act in the rebate period beginning on 14 February 2020 and ending on 13 February 2021 (i.e. a 12 month period).
The policy objective of the Rules is to provide temporary tax relief for commercial broadcasting licensees, in light of the significant decline in advertising revenue as a result of the COVID-19 pandemic. This pandemic will significantly affect economic growth and activity throughout Australia. Broadcasters are particularly vulnerable to this economic disruption due to their reliance on advertising revenue and disruptions to their production schedule, which has already been directly impacted due to the widespread suspension of major sporting events. This instrument will complement wider government stimulus measures by reducing the cost burden on broadcasters so they may continue to operate and provide critical information to the Australian community during this crisis period.
The practical intent of the rebate is to reduce broadcasting licensees’ net transmitter licence tax liabilities to $0 for the duration of the rebate period. The majority of broadcasters will receive a 100 per cent rebate of tax imposed during the rebate period. A small number of broadcasters who receive transitional support payments under the Broadcasting Legislation Amendment (Broadcasting Reform) Act 2017 (Broadcasting Reform Act) will receive a rebate of an amount equivalent to the difference between the amount of tax imposed and the transitional support payment amount the licensee receives in the same financial year. Transitional support payments were introduced for certain broadcasters in 2017, payable each financial year for five years from the financial year beginning 1 July 2017, in order to ensure that broadcasters were no worse off as a result of broadcasting licence tax reforms introduced through the Broadcasting Reform and CBT Acts.
This instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Consultation
This instrument was developed following consideration of representations from a number of affected broadcasters seeking relief from transmitter licence taxes in light of the impacts of the COVID-19 pandemic. The Australian Communications and Media Authority, which administers the transmitter licence tax, was consulted in the development of this instrument.
Regulation Impact Statement
Due to truly urgent and unforeseen events related to the spread of COVID-19, the Prime Minister has granted an exemption from the need to complete regulatory impact analysis in the form of Regulation Impact Statements for all Australian Government measures made in response to COVID-19.
Statement of compatibility with Human Rights
This statement of compatibility is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The purpose of the Commercial Broadcasting (Tax) (Transmitter Licence Tax Rebate) Rules 2020 (the Rules) is to provide for rebates to holders of commercial television and radio broadcasting licences of the transmitter licence tax imposed under the CBT Act in the rebate period beginning on 14 February 2020 and ending on 13 February 2021 (i.e. a 12 month period). The practical intent of the rebate is to reduce broadcasting licensees’ net transmitter licence tax liabilities to $0 for the duration of the rebate period.
The policy objective of the Rules is to provide temporary tax relief for commercial broadcasting licensees during the COVID-19 pandemic, and support broadcasters to continue to operate and effectively deliver content, including news and information, to Australians in a period of broader economic difficulty.
The effect of the Rules is limited to holders of commercial broadcasting licences under the Broadcasting Services Act 1992. The Rules have no impact on any natural persons in the capacity of licensee as only qualified companies are eligible to hold such licences.
The Rules are 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.
Articles 19 of the International Covenant on Civil and Political Rights sets out the rights to freedom of opinion and expression. The right to freedom of opinion is the right to hold opinions without interference, and the right to freedom of expression includes the right to receive and impart information of all kinds through any medium, including the media and broadcasting.
The Rules engage and promote the right to freedom of opinion and expression by supporting broadcasting platforms, which share diverse views and information with the Australian community. Commercial broadcasters are a valuable source of Australian news, entertainment and culture, particularly in the current circumstances which limit access to alternative sources of media, e.g. cinemas, theatres, newspapers.
Conclusion
The Rules are compatible with human rights as they support the right to freedom of opinion and expression and do not limit any other human rights.
Notes on Sections
Section 1 – Name
This section provides that the title of the instrument is the Commercial Broadcasting (Tax) (Transmitter Licence Tax Rebate) Rules 2020 (the Rules).
Section 2 – Commencement
This section provides that the whole of the Rules commence on the day after the Rules are registered.
Section 3 – Authority
This section provides that the Rules are made under section 14 of the Commercial Broadcasting (Tax) Act 2017.
Section 4 – Definitions
This section sets out a number of definitions for the purposes of the Rules. The section also notes that some terms, such as transmitter licence, are defined in the Commercial Broadcasting (Tax) Act 2017.
The term ‘Act’ is defined to mean the Commercial Broadcasting (Tax) Act 2017.
The term ‘Broadcasting Reform Act’ is defined to mean the Broadcasting Legislation Amendment (Broadcasting Reform) Act 2017.
The term ‘rebate period’ is defined to mean the 12 month period beginning at the start of 14 February 2020. In accordance with this definition, the rebate period will end at the end of 13 February 2021.
The term ‘Secretary’ is defined to have the same meaning as in Part 3 of Schedule 6 to the Broadcasting Reform Act. Item 38 of that Part defines the term to mean the ’Secretary of the Department. In accordance with subsection 19A(1) of the Acts Interpretation Act 1901, this will be read to mean the Department of State of the Commonwealth administered by the Minister or Ministers administering the relevant provisions in relation to the relevant matter, and that deals with that matter. At the time of making this instrument, that is the Secretary of the Department of Infrastructure, Transport, Regional Development and Communications.
The term ‘transitional support payment’ is defined to mean an amount specified in column 3 of the table in item 40 of Schedule 6 to the Broadcasting Reform Act.
The term ‘transmitter licence tax’ is defined to mean tax imposed under section 6 of the Act and calculated in accordance with section 7 of the Act.
Section 5 – Rebate of transmitter licence tax
This section sets out how the transmitter licence tax rebate provided under the Rules will apply to taxes imposed during the rebate period.
Subsection 5(1) provides that a person, other than a person who is a company mentioned in subsection 5(2), is entitled to a rebate of 100 per cent of the amount of any transmitter licence tax imposed on that person by the Act during the rebate period.
Subsection 5(2) sets out how the rebate will apply to companies who receive transitional support payments (TSPs) under the Broadcasting Reform Act. This subsection provides that a person who is a company in relation to which the Secretary makes a determination for the purposes of paragraph 39(1)(e) of Part 3 of Schedule 6 to the Broadcasting Reform Act (a TSP Determination) is entitled to a rebate of an amount determined in accordance with either paragraph 5(2)(a) or (b) as relevant.
Part 3 of Schedule 6 to the Broadcasting Reform Act sets out TSPs payable to a number of companies each financial year for five years from the financial year beginning 1 July 2017 (the eligible financial years), in order to ensure that broadcasters were no worse off as a result of broadcasting licence tax reforms introduced through the Act and the Broadcasting Reform Act. The amounts payable and the companies eligible for such payments are set out in item 40. Paragraph 39(1)(e) of Part 3 of Schedule 6 to the Broadcasting Reform Act provides that if the requirements in paragraphs 39(1)(a) to (d) are met, the Secretary must determine, in writing, that the amount specified in column 3 of the table in item 40 opposite a company specified in item 1 of that table is payable to that company by the Commonwealth by way of financial assistance in respect of an eligible financial year.
Paragraph 5(2)(a) provides that a company in relation to which the Secretary makes a TSP Determination is entitled to a rebate, if the first imposition of tax on the person during the rebate period occurs on or before 30 June 2020, of any amount of transmitter licence tax imposed on the person by the Act during the rebate period that is in excess of the amount of any TSP paid or payable in respect of the financial year beginning 1 July 2019.
Paragraph 5(2)(b) provides that a company in relation to which the Secretary makes a TSP Determination is entitled to a rebate, if the first imposition of tax on the person during the rebate period occurs on or after 1 July 2020, of any amount of transmitter licence tax imposed on the person by the Act during the rebate period that is in excess of the amount of any TSP paid or payable in respect of the financial year beginning 1 July 2020.
The effect of subsection 5(2) is to ensure that recipients of TSPs do not receive an advantage compared to other recipients of the tax relief. This aligns with the overall objective of the Rules, which is to reduce broadcasting licensees’ net transmitter licence tax liabilities to the Commonwealth to $0 for the duration of the rebate period.
The differentiation between paragraphs 5(2)(a) and (b) is to ensure that the amount of the rebate is calculated by reference to the TSP provided in the same financial year as the first imposition of tax during the rebate period, as under section 6 of the Act, tax is imposed on each anniversary of the date on which a transmitter licence came into force.
The example in subsection 5(2) is intended to demonstrate how the subsection will operate in relation to a company to which the subsection applies, and who holds multiple transmitter licences in relation to which tax is imposed over the two financial years into which the rebate period spans.
Subsection 5(3) clarifies the manner in which the rebate will be effected in practice.
In relation to taxes that have been imposed and paid prior to the Rules commencing, paragraph 5(3)(a) provides that the rebate will be effected by way of a refund of the tax already paid, to be paid as soon as practicable after the commencement of the Rules to the person who held the transmitter licence in relation to which the tax was imposed at the time that tax was imposed.
In relation to tax that has been imposed and not yet paid prior to the commencement of the Rules, paragraph 5(3)(b) provides that the rebate will be effected as an offset against the amount of tax that has been imposed.
In relation to tax that is imposed after the commencement of the Rules, paragraph 5(3)(c) provides that the rebate will be effected as an offset against any tax imposed prior to the end of the rebate period.
Subsection 5(3) recognises that, because the rebate period begins at a time prior to the commencement of this instrument, some licensees may already have tax imposed (which they may or may not have yet paid). If tax has already been paid, it will be necessary to provide the rebate by way of a refund. However, where tax has not yet been paid, for greatest administrative convenience it is desirable that the rebate be offset against the amount of any tax of which payment is outstanding at the time the instrument commence, or which will be imposed following commencement of the instrument.
Subsection 5(4) provides that the operation of the Rules in relation to a person who is liable to pay a transmitter licence tax under the Act is not affected by a change in the licensee of the transmitter licence in relation to which the tax is imposed. This subsection is intended to clarify that whoever is liable to pay the tax in accordance with the Act is entitled to the rebate, even if there has been a change in licensee. For example, subsection 10(2) of the Act provides that tax imposed by the Act on the anniversary of the day a transmitter licence came into force is payable by the person who held the licence at the start of the anniversary. This would mean that if a licence is transferred on the day before the anniversary date, the new holder of the licence will be liable for tax imposed on the anniversary date. Subsection 5(4) makes clear that the new holder of a licence will be entitled to any applicable rebate under the Rules.