As a not-for-profit organisation, the Copyright Agency funds its operations by deducting its costs from the licence fees received each year.
Every financial year, the Copyright Agency prepares a revenue and expenditure budget, within which it must operate. The funds used to run the Copyright Agency are then drawn down from the Trust Fund as required throughout the year.
MOST DEDUCTIONS ARE based on OPERATING COSTS
Our deductions for administrative costs vary from licence scheme to licence scheme, and from distribution to distribution. The deductions are made when licence fees are received, rather than when they are distributed. They include an amount for the Cultural Fund (explained below), and are offset by interest on licence fees, and allocated amounts unpaid after four years (‘rollovers’).
For a small number of schemes, the deductions are fixed. For most schemes, however, the deductions are based on operating costs. The current methodology (from 1 December 2017) is based on the actual operating costs in the past two years, and the projected operating costs for the financial year in which the licence fees are received.
MAJOR FACTORS CONTRIBUTING TO COSTS
The major component of the costs for a distribution is the staff costs. Other costs include the surveys of use (to determine what is being copied) and the IT systems used to process data.
CULTURAL FUND DEDUCTION
The Copyright Agency allocates up to 1.5% of licence fees to the Cultural Fund, which grants funds for cultural purposes as approved by the Board. The current percentage of licence fees allocated to the Cultural Fund was voted on and approved by members at the 27 November 2010 AGM.
The fixed deductions are currently:
- Copyright Agency pay-per-use licensing (e.g. through RightsPortal): 15%
- licence fees from digital press clipping (media monitoring) licences: 10%
- artists’ resale royalty scheme: 15%
The deduction for anticipated operating costs for licence fees received in 2018–2019, including the 1.5% for the Cultural Fund, is 14.5%.
All deductions, except that for the artists’ resale royalty scheme and payments from Screenrights for artworks, include the 1.5% contribution to the Cultural Fund.
The deductions from fees distributed in 2017–18 ranged from 10% to 16.29% (depending on the source of licence fees and when we received them), including the 1.5% Cultural Fund contribution. There is a detailed list in our 2018 annual report.
GST on operating costs
Some of the deductions for our operating costs are subject to Goods and Services Tax (GST) based on Australian Taxation Office (ATO) requirements. If GST is applicable, we will make a deduction for the GST and you will be allocated an equivalent Input Tax Credit (ITC) that you may be able to claim from the ATO. See here for further information about tax issues relating to Copyright Agency payments.
Information on your payment summary and report
The payment summary and report (remittance advice) that can be downloaded from your ‘Summary’ page of your Payments menu on your online account. The Detailed View tab sets out the deductions we have made.
Overall cost to revenue ratio
Our licence fee revenue and investment income varies year to year.
We report about the breakdown of revenue and costs each year in our Annual Report.