Broadcasting Act 2009 (Section 33) Levy Order 2010 : Motion.

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan)

I move:

That Dáil Éireann notes the Broadcasting Act 2009 (Section 33) Levy Order 2010 [S.I. No. 7 of 2010] and the commitment of the Minister and the Broadcasting Authority of Ireland (BAI) to address the concerns of the broadcasting sector.

We had a useful and beneficial discussion at the Joint Committee on Communications, Energy and Natural Resources last week on this issue. Across the House there is a shared understanding of the importance of local radio to the country. Since it was introduced in the late 1980s, it has been hugely beneficial to many communities. We are all committed to protecting it and to seeing it continue to thrive. In recent years, those in the radio sector have said that good regulation helps radio companies succeed and that the early requirement for local radio stations to carry local content strengthened them and helped them thrive.

The Broadcasting Act 2009 has given the independent broadcasting sector a single regulator under the Broadcasting Authority of Ireland, which it has been seeking for some time, without fear or favour to either side. It is crucial that a level playing field is provided.

Regulation tends to be funded by its industry as happens in energy, communications and other sectors. The Broadcasting Act 2009 sets out the ability of the broadcasting industry to fund its regulator, as is the practice elsewhere. I believe it is the right model. The levy order, laid before the House by the Broadcasting Authority of Ireland in January 2010, set out the mechanism by which funding would be put in place. It did not determine the regulator's budget or the exact payments to be made by any radio station or broadcasting party. As was debated at the joint committee, the mechanism went through independent expert advice and consultation before it was laid before the House.

The Joint Committee on Communications, Energy and Natural Resources did valuable work in identifying the sector was in difficulty because of the downturn in advertising and the competitive nature of the market due to the large number of radio stations and asking the Broadcasting Authority of Ireland to re-examine its budget and the amount of the levy. I was pleased with these developments. It will have a board meeting at the end of the month and I presume it will return to the committee afterwards with whatever budget revisions it has made.

I was glad I could tell the committee we could go further than that. I committed to examine legacy payments, those that might have to be made for covering the last quarter of 2009, and other mechanisms that could reduce the levy and, therefore, support the industry. We need good regulators and regulation in broadcasting as it is a more difficult sector to regulate than, say, energy or communications, due to it being involved in sensitive political and other social issues. Good content regulation is vital. The right people have been appointed to the authority to achieve this. I believe they can do their business in a cost-effective and efficient way that supports the industry.

We need to get it right as it is a difficult levy to introduce during a difficult economic time. The authority should be allowed to come back to the Oireachtas committee, as I will, to further the work already done, to deliver for the industry and to protect the jobs needed in our radio and television sector.

Deputy Simon Coveney

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"annul the Broadcasting Act 2009 (Section 33) Levy Order 2010 [S.I. No. 7 of 2010] to allow the Broadcasting Authority of Ireland (BAI) to review budgetary expenditure for 2010 and satisfy Dáil Éireann that the concerns of the broadcasting sector are being addressed through the delivery of value for money in the new BAI structures."

I am glad we have an opportunity to discuss this issue on the floor of the House because for some days it seemed that would not be possible. Three different motions were tabled by the Government to facilitate this debate. The first was inexplicably withdrawn and then re-introduced last Friday. It was re-introduced again today, then changed and now we have this motion.

I tabled this amendment not to be difficult. I understand where the Minister is coming from and I welcome his encouragement of a review of the expenditure plans of the Broadcasting Authority of Ireland for this year. I also welcome that he will return to the communications committee with ways to deal with the costs that have been already incurred in the last quarter of 2009 and the first of this year. I understand this expenditure has been met by cash reserves, but we do not know from where they came.

While that is a historical issue, my main problem is that the Minister is asking us to give away the only tool this House has to require the Broadcasting Authority of Ireland to review, revise and publish to the House's satisfaction its budgetary plans for 2010. The House is being asked to approve a levy order to raise moneys for a budget it has not seen. The House only knows, from what the Minister told it in January, that the Broadcasting Authority of Ireland plans to increase its budget by 27%, from €6 million to €7.6 million. Despite it having several extra responsibilities as the new broadcasting authority, I do not accept that there should be any increase in its budget due to the economic environment in which both private and public broadcasters are operating. When broadcasters' revenues have been reduced by between 20% and 30%, we are introducing a new levy on the industry, one that was not in place last year because it was paid through the Exchequer, to pay for this regulation.

In response, the industry has acted responsibly. Few broadcasters have a problem with the principle of a levy to pay for regulation. However, they have a problem with being asked to pay for a bloated yet unpublished budget. By law and, according to what the Minister said in January, it should have been published by now. With reluctance, we are using the only tool available to us as legislators to prevent the Broadcasting Authority of Ireland from introducing a levy on broadcasters until it can satisfy the House it is acting prudently, offering value for money and not putting an undue financial burden on broadcasters. The Minister has not answered that question. It is not unreasonable for us to say to the BAI at this stage to forget about this levy in order to concentrate on its budgetary review and to come back and explain why it needs that amount of money and where it will be spent between now and September. At that stage the BAI will have prepared a three-year budget so this is a temporary measure. When it does so, we will help to fast-track an order to allow it to collect a levy at that time. We will not sign a blank cheque for the Broadcasting Authority of Ireland. That is irresponsible and we should not do it. That is the basis of my amendment to the Government motion.

Deputy Liz McManus

On 3 March, the Oireachtas Joint Committee on Communications, Energy and Natural Resources did something unusual. It recommended the annulment of the broadcasting levy scheme. All parties, Government and Opposition, supported the motion. They shared the same feeling of outrage at what is being done, particularly in respect of how it affects the smaller operator such as local radio stations across the country. We now have an opportunity to put things right in this debate. We can ensure that a new fair scheme is put in place if we vote for the amendment tabled by the Opposition and reject the motion.

Over the past number of days, Government shenanigans have led to an abuse of this Parliament. A meaningless motion is being debated at a time when we need to get real. The motion states that we in this House note the commitment of the Minister and the BAI to address the concerns of the broadcasting sector. The Minister and the BAI have created the mess. Both parties colluded in the exorbitant increase in the budget, which is still to be published, of €7.6 million. This figure was agreed by the Minister for Communications, Energy and Natural Resources and the Minister for Finance and was only made known by way of a parliamentary question. The formula — the levy scheme used to apportion costs across the sector — was devised by consultants employed by the BAI. It is grossly unfair and militates against smaller local radio stations.

We do not need ineffectual posturing and crocodile tears from the Government. We need the levy scheme taken off the table and a new one drawn up. This is not just about the budget for 2010, it is about future budgets and past budgets. The Minister let the cat out of the bag when he met the committee recently. Until he said otherwise, everyone understood the broadcasting industry would have to pay the €1.25 million fee for last year. It turns out the Broadcasting Authority of Ireland had money in the bank and was well able to pay for it itself. That bill presumably will not be levied on the broadcasting industry.

It goes without saying that we need a reduced budget at this stage because of what happened. That is not the issue. The issue is the levy scheme, where reform must happen. Work postponed will reappear next year or the year after. It will still be paid for and the leopard will not have changed its spots. The unfortunate independent sector will be bled dry. The budget increase is 27% or more and according to the industry the cost of the levy represents 1.7% of total advertising revenue at a time when broadcasters have had to cut costs by 15% to 25%. That is what is going on beyond the confines of this House.

The formula set out in the statutory instrument militates against smaller operators. The bigger the operator, the bigger the discount. I do not want to knock RTE but it is noteworthy that RTE will pay 50% of the levy even though it has far more than 50% of the revenue. Even a simple percentage levy would be fairer than what is proposed now. Government Deputies can show their mettle again. They have already done so and it is a great credit to them that they stepped out of their comfort zone. They know the importance of the role of local broadcasting. The Minister for Communications, Energy and Natural Resources can steamroll a levy scheme into force that will penalise the independent sector and lead directly to job losses. He can do so if the Government Deputies give him that right today. However, we have a choice and it is an important one. If the amendment is passed, the Minister will be sent back to the drawing board and a new levy scheme will be introduced, which is not an insurmountable task. As Deputy Coveney said, there would be willingness on the part of the Opposition to make progress and to sanction a scheme to ensure it is put in place.

Nobody is refusing to contribute to the cost of regulation but the Minister bears the responsibility for a lavish budget drawn up by a quango he established unnecessarily. There was a cheaper, easier and better way to do this. The Minister must take responsibility for putting to right what has happened. This has a major impact, particularly on local radio stations across the country. They are being hit unduly hard and we have a duty to represent those people across the country.

Deputy Martin Ferris

Sinn Féin will oppose the motion to enforce a levy as it will mean many local radio stations will find it difficult to survive. Local radio stations simply cannot afford the levy, in some cases up to €50,000, in the current economic climate. They are not taking in enough revenue to sustain such costs. Also, the budget allocated to the new broadcasting authority is significantly higher than the two authorities it replaced, the Broadcasting Commission of Ireland and the Broadcasting Complaints Commission, despite one of the arguments for its establishment being greater efficiency and presumably cost savings.

The advent of local broadcasting has been welcomed as a positive development and has contributed to a great improvement in the level of local coverage across the spectrum from local news to sport and other cultural activities. It would be a great pity if the effect of this levy was to put some of these local broadcasters out of business. Apart from the loss to local communities, it would also mean that stations would be forced to close or curtail their activities and a significant number of jobs would be lost. When this issue was raised in a question to the Minister, he said the broadcasting authority would review its budget estimates and would meet again with radio stations. Today, however, he seems to have decided there will be no change and the levy will stand. Surely, given that advertising revenues, which are a key part of the income that allows local radio stations to operate, have fallen by as much as 30%, there is a need to re-examine the levy, which was decided upon before the full impact of the current economic downturn was felt in the sector. Surely it is preferable that the Minister waives the levy, given that having the stations continue to operate and provide jobs and income and tax revenue to the State is preferable to bringing about a situation where some, if not many, are forced to close with the consequent loss that would represent.

It should also be noted that the levy has been opposed by people across the political spectrum. This includes Government members of the Joint Committee on Communications, Energy and Natural Resources, one of whom tabled a motion to annul the levy. This received unanimous support. Presumably there will be another situation which Government Deputies will shamefully be forced to retreat from positions adopted in the committee and vote in favour of something they are clearly opposed to. The Minister ought to take on board the concern expressed by the committee as he said he would. He should promise the broadcasting authority will review its budget and reduce the budget so that the levy is not required. That will allow local radio stations to continue to operate in the current economic climate without having to cope with an added financial burden. That would mean the preservation of the quality of the service provided and jobs. The situation could be reviewed if and when the situation changes and stations are earning sufficient advertising revenue to meet the demands imposed upon them. For the reasons listed, I ask the Minister to change his mind or to at least allow those members of the Government parties, who clearly share opposition to the levy, the opportunity to vote against it.

As stated by previous speakers, perhaps the Minister will contemplate the amended motion and revisit the whole situation to the benefit of Irish broadcasting and local radio stations in general.

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan)

I appreciate the comments from Members opposite. As regards how the motion before us and not the committee motion came before the House, as I understand it a committee motion can be reported on the floor of the House but cannot lead to a debate on the floor of the House. However, I was quite happy to facilitate the Opposition's motion and to go over some of the issues raised at committee and to tease out the matter further. This is an area——

Deputy Liz McManus

Why then was it withdrawn?

Dáil Éireann díospóireacht - Tuesday, 9 Mar 2010

Broadcasting Act 2009 (Section 33) Levy Order 2010 : Motion.

Tá

Níl

Dáil Éireann díospóireacht -
Tuesday, 9 Mar 2010