JOSH FRYDENBERG:
Good morning. For many Australians, Google and Facebook are part of our way of life. More than 17 million Australians use Facebook. 98 per cent of online searches from a mobile device are using Google. For the businesses, this is very lucrative. Australia’s online advertising market is worth more than $9 billion a year. And for every $100 spent on online advertising, $47 goes to Google, $24 to Facebook and $29 to the other participants. But as the technology has developed and as the power, the wealth, the influence of these digital platforms, namely Google and Facebook has grown, our regulatory framework has not kept up. As a result, there is a very unequal bargaining position between Australian news media businesses that produce original content and the digital platforms. So we as a Government tasked the ACCC to undertake a detailed world-leading study which they did over a period of some 18 months. Their recommendation was for a code to govern those relationships between the digital platforms and the Australian news media businesses. A concept paper was released earlier this year and so our announcement today and our release of a draft mandatory code follows extensive consultation with the parties. It became apparent to us a number of months ago that we weren't making progress on that critical issue of payment for content. Hence we are moving down the path of a mandatory code. A mandatory code that governs those relationships and covers issues such as access to user data, the transparency of algorithms used by the digital platforms for the ranking and the presentation of media content, as well as of course, payment for content. What we've sought to with this mandatory code is not protect Australian news media businesses from competition, or from disruption that is occurring across this sector. What we've sought to do is create a level playing field to ensure a fair go for Australian news media businesses and that when they generate original content, that they are fairly paid for it. We want Google and Facebook to continue to provide these services to the Australian community which are so much loved and used by Australians. But we want it to be on our terms. We want it to be in accordance with our law. And we want it to be fair. That is what has motivated us with this mandatory code. I'll run through the key details of how the code will work. The Minister for Communications and the Arts, Paul Fletcher, will stand up shortly in Sydney followed by the head of the ACCC, Rod Sims. I want to congratulate Rod and his whole team for their outstanding work in producing this world-leading document and this world-leading regulatory framework. I as Treasurer, will be able to determine that a digital platform is subject to the code. And it will start with Google and Facebook. And I'll have regard to ACCC advice about whether a substantial power, bargaining power imbalance exists in the listing of other digital platforms. ACMA, the Australian Communications and Media Authority, will assess the eligibility of Australian news media businesses to participate in the code against a set of criteria set out in the draft code. Namely that these businesses predominantly produce core news, such as journalism on matters of public importance, or local and community events, and publish this online. That these businesses adhere to appropriate professional editorial standards, that they maintain editorial independence from the subject of their news coverage and that they operate primarily in Australia for the purpose of serving Australian audiences. The code will require designated digital platforms to negotiate in good faith about the payment of remuneration to Australian news media businesses. These news media businesses will be able to negotiate either individually or collectively. And the ACCC point out that some 88 smaller local regional community based media organisations and businesses put in a joint submission following this concept paper about the drafting of this code. Importantly, I point out that these bargaining arrangements about the payment of remuneration will not be available to public broadcasters as they are principally funded by the government and not through advertising revenue. Public broadcasters will, however, benefit from the minimum standards for non-remuneration matters set out in the draft mandatory code. If the parties cannot agree on remuneration after three months of negotiation, they then they can seek to have the matter go to binding final offer arbitration, with a decision required in 45 days. So if they cannot reach an agreement after three months of negotiation, they can go to a binding arbitration. Arbitration is limited to the issue of payment or remuneration, but parties can cover other issues in the mediation and negotiation process leading up to this, such as getting a better deal on the minimum obligations. Parties will have the freedom to agree to their own arbitrators, but if they cannot agree, then ACMA will oversee a list of arbitrators and will appoint a panel of three arbitrators and these arbitrators will obviously have experience in legal, economic, and industry matters. In arbitration, both parties will each submit a final remuneration offer to be arbitrated. And in determining which offer to accept, the panel will be required to take into account the direct and indirect benefits of Australian news to digital platforms, the costs incurred by news media businesses in producing news, and whether an unfair burden would be imposed on the digital platform by virtue of that agreement. The arbitrator may only reject both parties' offers if each offer raises significant public interest concerns. In this circumstance, the panel may seek to adjust one of the offers. So again, to be very clear, there will be negotiation, followed if need be by arbitration and the parties can appoint the arbitrator or they can reach out to ACMA who will have a list of appropriately qualified arbitrators who will then, three of whom, will then be designated to arbitrate, using one of those two offers that have been put by the parties. The code also imposes a range of minimum obligations on digital platforms. These include providing news media businesses with information about news related data, providing advance notice of at least 28 days of algorithm changes, affecting news ranking, the display of news content and advertising with news content, developing a proposal facilitating the recognition of original news content and open communication requirements, including by requiring digital platforms to establish a contact point for news media businesses. Often these digital platforms do not have a single point of contact for which the media businesses can reach out to as required. The code prohibits digital platforms from discriminating against Australian news media businesses that are covered by the code. As appropriate, there are substantial penalties for breaches. The ACCC will be responsible for enforcing the code, and will be able to issue infringement notices with smaller fines for minor code breaches. The maximum penalties though, however, are in line with those available under the Australian consumer law, with maximum penalties applying for breaches of up to $10 million per breach, or three times the benefit obtained or 10 per cent of annual turnover, whichever is greater. So there are penalties of up to $10 million per breach. The code will commence following the introduction and passage of relevant legislation in the Australian Parliament. The ACCC will be releasing this exposure draft of the legislation today, with consultation on the draft concluding on 28 August. Final legislation is expected to be introduced to Parliament shortly after that, at the conclusion of this further consultation process. The ACCC believes the code will ensure disagreements about payment for content are resolved quickly, with deals on payment potentially reached within six months of the code coming into effect if arbitration is required. There will be a review of the code and that will be in the legislation and will be required to commence within two years of its passage. So in conclusion, can I thank the Minister for Communications and Arts, Paul Fletcher, who I have worked very closely with on this matter. Can I thank the ACCC for their outstanding work, this is world-leading. Today's announcement and today's draft legislation will draw the attention of many regulatory agencies and many governments right around the world. It's about a fair go for Australian news media businesses, it's about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape. Nothing less than the future of the Australian media landscape is at stake with these changes. So I look forward to working with the parties in bringing in this new legislation and this mandatory code to better govern the relationships between the digital platforms, some of the most powerful and influential and wealthy companies in the world, and Australian news media businesses that are keeping us all abreast of the daily news and events. Thank you.
QUESTION:
So will that be introduced to Parliament this year?
JOSH FRYDENBERG:
The intention is to introduce the legislation to Parliament this year. There is obviously the consultation process that will continue for the course of this month. After which, the Government will finalise its legislation and introduce it to the Parliament.
QUESTION:
Who still has to be consulted? Have you consulted the media businesses and Google and Facebook?
JOSH FRYDENBERG:
There's been constant contact with the media businesses, with the digital platforms. That will obviously now go to the next phase of consultation, based on the draft legislation that we're releasing today.
QUESTION:
You’ve been talking about news media businesses. Where does that leave the public broadcasters? Are they [inaudible]?
JOSH FRYDENBERG:
Well, the public broadcasters will benefit from the non-payment aspects of the code. There is a material point of difference between the public broadcasters and the commercial broadcasters. Public broadcasters are principally funded by taxpayers’ money. They're not principally relying on advertising revenue. So, the viability of public broadcasters are not under threat. What is under threat right now is the viability of our traditional commercial media businesses. Therefore, by creating a level playing field, we are better placed to ensure a sustainable media environment which, of course, importantly has a key role for our public broadcasters, but also has a key role for our commercial broadcasters.
QUESTION:
You mentioned other international markets and where this scheme sits in regards to those. Have you spoken much to other governments who are looking at introducing similar schemes?
JOSH FRYDENBERG:
There have been certainly those discussions that have taken place with the relevant regulatory agencies. In particular, Rod Sims has been consulting very widely in recommending to Government this pathway forward. But certainly, what Australia is doing here is in front of the world. Other countries have tried without a lot of success. But we're confident that we will be able to implement this legislation and have real effect.
QUESTION:
Why do you think you'll be able to achieve something other countries haven't been able to?
JOSH FRYDENBERG:
I think this is a better set of recommendations and a better pathway going forward, than what we've seen elsewhere. It's the product of 18 months’ worth of work, extensive consultation, and our law will set up for a more level playing field.
QUESTION:
Just on superannuation, Labor yesterday described the early access super scheme as one of the most significant examples of intergenerational theft we have ever seen. Are you using the super to prop up the economy rather than stimulus measures?
JOSH FRYDENBERG:
It's pretty bizarre to hear that from the Labor Party after they bragged about supporting the measure in the Parliament. So on the one hand they're criticising the measure they voted for. I mean, they need to get real. This is about giving people access to their own money, and people need access to their own money at times of hardship. Under existing superannuation law in Australia, you can you access your money at times of hardship. We have expanded this scheme and more than 2.5 million Australians have accessed this money at a time of need. Superannuation doesn't belong to the Government. And it doesn't belong to the superannuation fund managers. It belongs to the Australian people. We're going through a once-in-a-century pandemic. And giving Australians access to $42 billion of their money, which is Treasury's latest forecast, is an important source of funds for people at this time, on top of the many Government initiatives. To put it in context for you, the super funds have more than $300 billion in cash. More than $120 billion went into the superannuation funds over the last 12 months alone. So we're talking here about $42 billion being accessed at a time of need, and it's the people's money. The Morrison Government is giving access for Australians, tax-free, to their money, at a time of greatest need.
QUESTION:
What about people who pull out there super without meeting the eligibility requirements, should they be fined or should they have to repay money?
JOSH FRYDENBERG:
Well the tax office said again yesterday, that they conduct the normal checks, based on their risk assessment processes, including doing random audits. That’s how they approach compliance more broadly, with the tax system. If people have falsely filled out their forms then there are penalties that apply.
QUESTION:
Here in Victoria, we’ve got, obviously tougher restrictions, and the Treasury Secretary yesterday warned that those tougher restrictions will impact jobs and hurt the economy more than was forecast in last week’s update. Do you know what that impact will be yet?
JOSH FRYDENBERG:
Well obviously, what we’re seeing here is Australia at two stages. We’re seeing recovery and the opening up, the easing restrictions in other states, but obviously in Victoria, we’re in the midst of a six week lockdown. Victoria is a quarter of the national economy, so the impact is significant economically and the impact is even broader than within the borders of Victoria, it’s impacting on business and consumer confidence. But we will again update the numbers in the context of the Budget on 6 October. But what we do know from the most recent job numbers is outside of Victoria, people are starting to get back to work. 210,000 jobs were created, people came back to their jobs. That was more than double what the market was expecting. 60 per cent of those, 210,000 jobs went to women, 50 per cent went to young people, it was a positive sign the economy is moving in the right direction.
QUESTION:
How can the economy recover though if states keep yo-yoing like we’ve seen in Victoria and it’s possible in Queensland and NSW too?
JOSH FRYDENBERG:
Well obviously our first and number one priority is trying to stem the number of new cases here in Victoria. And so the Morrison Government is working with the Andrews Government, providing the necessary support, whether it’s the deployment of Australian Defence Force personnel, whether it’s these teams to help within the aged care sector, whether it’s other Commonwealth public servants that are helping with the health task. We are deploying as many resources as possible into Victoria and how we manage this outbreak will very much determine the speed and trajectory of the economic recovery nationally.
QUESTION:
Well just on managing the outbreak then, how important is it that the Federal Government provide paid pandemic leave to stop people going to work and spreading the virus?
JOSH FRYDENBERG:
The Prime Minister was asked this question yesterday and he said obviously we’re continuing to work it through with the Minister for Workplace Relations.
QUESTION:
When should we expect an answer on this?
JOSH FRYDENBERG:
Well, again, we’re working it through, and we’re conscious that the issue has been raised and we’re working though the appropriate channels.
QUESTION:
When do you expect border closures to stop, do you think it will be before Christmas?
JOSH FRYDENBERG:
You talking about domestic or international?
QUESTION:
Domestic.
JOSH FRYDENBERG:
Well obviously, those are matters for the states, and again it will depend on the number of new cases. It will depend on community transmission and how effective the health professionals are in stemming the tide of new cases, not just in Victoria but in the other states that they arise.
QUESTION:
And what about international travel, when do you think that will lift?
JOSH FRYDENBERG:
I think that’s some time away. Obviously we’re seeing a second wave of cases more broadly in other countries around the world and while we’re all very hopeful for a vaccine and there are 24 various vaccine candidates that are now in clinical trials including some here in Australia and we as a Government have deployed more than $330 million to the task of finding a vaccine, we’re all hopeful of that. But only the medical experts know when that may actually come to fruition.
QUESTION:
So for international travel, not until well into next year [inaudible]?
JOSH FRYDENBERG:
Well again, I think it’s some time away and it will depend on what is happening both globally and domestically in terms of stemming the tide of new cases.
QUESTION:
Just with interest rates on the pensioner loan scheme is 4 per cent, way above market rate, would you considering cutting it?
JOSH FRYDENBERG:
Again, we have various payments and various interest rates that are set in relation to various considerations but I do point out that we made a number of changes in terms of the deeming rate, which was important for those on the pension and we brought the lower rate down to the cash rate and that’s been of great benefit to people who are on the pension and otherwise. We also made two $750 payments to pensioners, which has seen billions of dollars go into their pockets and that’s come at a [inaudible] time.