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. 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 current deduction for anticipated operating costs, including the 1.5% for the Cultural Fund, is 14.5% (as of October 2020).
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.
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 about deductions in your online account
You can see deductions for amounts allocated to you in the Detailed View tab in the Payments section of your online account.
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.