RADIO AND TV LICENCE FEES (Request for reduction)

Mr Hwang Soo Jin asked the Minister for Foreign Affairs and Minister for Culture whether, in the light of the considerable profits made by the Singapore Broadcasting Corporation during the past year, he will consider a reduction in Radio and TV licence fees.

The Minister for Foreign Affairs and Minister for Culture (Mr S. Dhanabalan): Mr Speaker, Sir, while it is true that SBC has realized a surplus of $19.3 million during the 14 months of its operation, I do not consider it prudent to reduce the licence fee.

SBC has achieved the surplus because of improvements which have made the broadcasting service a more attractive advertising and sales media, resulting in an increase in income for SBC. The surplus is to be ploughed back on improvement of SBC's programmes. SBC intends to build up its capability both in facilities and talents in order to increase its own production of programmes, geared specifically to meet our needs and interests. However, production of local programmes is much more expensive than acquisition of programmes from abroad. Therefore, it is necessary to have access to additional financial resources. Without additional funds, SBC can at best hope to maintain its existing standard of service. Even this may not be possible in the face of mounting inflationary pressures.

It is also SBC's intention to purchase better programmes which are educational, informative or of better cultural value. Such programmes will cost more to acquire because they are not usually available on the "bicycle circuit". Therefore, SBC would not be able to share the cost of such programmes with other TV stations in the region.

SBC is a young organization. It is prudent to build up a reserve fund to cater for the future expansion of operation, improvement of quality, training and upgrading of manpower and any unforeseen circumstances. I mention the last point because advertising business is among the first to suffer from a cutback in expenditure in a recession.

SBC's licence fees on TV and radio have remained unchanged for the past four years in spite of substantial increase in operating cost. As it stands now, the colour TV licence fee at $54, black and white TV licence fee at $36 and radio licence fee at $12, are already very low, considering that the licensee has available 13 hours of SBC TV programmes daily and 18 hours of radio programmes over each of the five radio channels.

The revenue from radio and TV licences for the financial year 1980 amounted to $13 million or 20% of SBC annual income. A downward revision of licence fee will significantly affect the financial resources of SBC. To try to make good the loss of revenue by radio and TV commercials will mean that there will be far more commercial breaks interrupting programmes. This is not desirable. Moreover, not all of SBC's programmes are commercially exploitable.

The overall audience response to changes and improvement made since the inception of SBC has been favourable. The momentum built up in improving its services will be lost if SBC's revenue were to be reduced. Hence, so long as SBC uses its surplus to improve the quality of programmes and the standard of services for the benefit of its viewers and listeners, no one should grudge paying the radio and TV licence fee.

Mr Hwang Soo Jin (Jalan Kayu): Mr Speaker, Sir, I believe the advertising rates of SBC are going up, Could the Minister give an indication of what is the estimated increase in revenue?

Mr Dhanabalan: Sir, I am afraid I cannot give the hon. Member an estimate right now. The rates will go up from next month, which is the new financial year, and the full impact will be known by March 1983.

Mr Hwang Soo Jin: Sir, if as a result of this increase and after a further period of 12 months, the surplus continues to accumulate, would the Minister then consider a reduction in licence fee?

Mr Dhanabalan: Sir, I think that when we have a surplus we will have to consider the matter in the circumstances prevailing at that time. There is much scope for improvement in the SBC services. We are not using the surplus to pay dividends to anybody. Every cent generated will be used to provide a better service to Singapore.