The abolition of the media licence contributes to digital-ready legislation
This Act implements the agreement on the refocusing of the Danish Broadcasting Corporation (DR) and the abolition of the media licence concluded between the Danish People’s Party (DF) and the previous government in the spring of 2018.
The agreement between DF and the previous Government Lars Løkke Rasmussen III aims to ensure a new focus of DR on basic public service and thus a better balance between DR and private media providers in a media image that has become wider and more competitive in the light of the many new offers on digital platforms. The agreement also aims to ensure that the funding of public service institutions and other media purposes is better socially balanced. The social imbalance in the existing licensing financing system consists of the fact that single persons have to pay the same media licence as households with multiple persons. In addition, there are a large number of viewers (approximately 270,000 estimated at the beginning of May 2018) who do not pay for the public service.
The legislative proposal
The legislation includes amendments to the Broadcasting Act, the Act on Income Tax for Persons and the Law on Social Pensions. The legislative changes together ensure that the media licence is gradually abolished as an autonomous tax, since the public subsidies for DR and other media purposes are instead financed by a lesser regulation of the personal allowance for all who have reached the age of 18. The law partly takes into account the fact that some citizens are currently exempt from paying full media licenses. Pensioners who were previously entitled to a reduced media licence will therefore receive a media check in future. The cheque is paid automatically once a year in the same way and on the same basis of income as the older cheque.
The abolition of the media licence is gradual by introducing a transitional period from 1 January 2019 until 31 December 2021, where the licence is gradually reduced so that it is fully abolished as from 2022. Consequently, DR and the regional TV 2 companies will during the period be increasingly financed by the Finance Act and to a decreasing extent from the proceeds of the media licence.
The financing of the media licence through a reduction in the personal deduction means that the personal deduction is reduced in real terms, but not in nominal terms. More precisely, the applicable basic amount for the personal deduction of DKK 42,000 is reduced by DKK 800 in 2019, DKK 1,500 in 2020, DKK 2,300 in 2021 and 2,900 DKK in 2022 and subsequent income years (all amounts in 2018-level).
Overall, the legislative changes reflect how several of the principles of digital-ready legislation can be applied in concrete legislation. The following details explain how the law exemplifies the principles. Each example begins with a brief introduction to the content of the principle in question.
Principle #1 on simple and clear legislation
Principle 1 states that legislation must be simple and clear in order for it to be easy to understand and administer for citizens and businesses. This makes legislation easier to manage and contributes to a more consistent administration that can be supported digitally.
The abolition of the media licence is a good example of the application of the principle of simple and clear legislation as it involves the abolition of a tax system and instead places the collection of funds to finance the public service in an existing system by reducing the personal deduction.
By funding public services in the same way as other public goods, legislation becomes simpler. At the same time, more efficient public administration is supported for the benefit of public administration. Simplifying the rules also helps to make legislation easier to see through for the benefit of citizens.
Principle #3 on automatic processing
Principle 3 on digital-ready legislation requires rules to be written so that it is possible to digitally support or automate workflows associated with decisions.
The amendment automatically supports the case procedure, since, according to the comments on the individual provisions of the legislative proposal, the proceedings of the media check (checks for pensioners entitled to a reduced licence) take place automatically and once a year (p. 9). In this way, the legislative proposal supports the possibility of automating workflows, and in the long term, this measure contributes to more efficient workflows.
Effects and impacts
It is clear from the legislative proposal that the abolition of the media licence will have an economic impact on citizens. More specifically, in the long term, the legislation will result in a profit of DKK 1,242 for single citizens without a reduced licence. The benefit for lone pensioners who are currently entitled to a reduced licence will be about half. For couples, the abolition of the media licence will have a limited, yet positive, significance.
For the public sector, legislation means that there will no longer be a need for heavy and expensive licensing management, including the abolition of IT systems for the collection of licences. The lower regulation of the personal allowance is estimated to result in additional revenues that partly contribute to the financing of DR and other public services, while the media check for the elderly is estimated to result in additional public costs.
The legislative changes, which together effect the abolition of the media licence, are a good example of how legislation can be organised so that the need for a uniform and digitally supported administration can be met. This is done through simplification of rules and by introducing automatic workflows. In the long term, these measures help to ensure effective public administration, and the application of simple and clear rules makes legislation transparent. In this way, citizens’ legal certainty will be ensured.