The benefits of the cut in the TV licence fees for the free-to-air industry has once again been underlined by this week’s dismal interim results from the Ten Network. The tax cut has provided the financial struggling Ten with another multimillion-dollar gift from the Australian taxpayer. Without it, Ten’s operating position would have been even worse than it was. Seven West Media, Nine Entertainment, Southern Cross Media and Prime look a little better, too.

The reduction saw the fee fall from 9% to 4.5% — there were two years of temporary cuts and that position was finalised last month by new legislation. Unlike the TV licence impairment charge Ten took of $292 million (and total writedowns of $304 million before tax), which were what accountants call “non-cash” charges, the tax cut provided a direct cash benefit to Ten of around $13 million it got to keep, instead of having to pay the federal government if the tax had remained at its previous high rate.

Ten reported earnings were $34.9 million on TV revenue of $301.7 million. Had the tax still been at the old rate of 9%, Ten would have had to pay $27 million, but instead the charge was around $13.5 million. The higher rate would have had the effect of cutting the EBITDA to around $20 million and reducing the underlying net profit report reported by Ten of $6.8 million, to a loss of around $7 million. In the 23011-12 financial year, the saving for Ten from the tax cut was substantial — the network paid tax at the lower rate of 4.5% of just over $31 million, against more than $63 million had the tax been still at 9% of revenue (on of nearly $713 million).

Ten management, led by new CEO, Hamish McLennan didn’t acknowledge the positive impact of the tax cut on Ten’s results, nor did they reaffirm that the money saved would be spent on local content production, which has been the justification for the tax cut from the free TV industry and the federal government.