I get a lot of emails and letters about the ABC and so we have set out some frequently asked questions (FAQs) and our answers to them. If there are other questions you think we should address here, please let me know either in the comments section below or by emailing me at [email protected]
The Government commissioned the ABC and SBS Efficiency Study to identify potential savings from the many "back of house" functions of the public broadcasters' operations. This included administration, use of equipment, property and technologies.
The Terms of Reference were set out but the Minister for Communications and agreed with each broadcaster.
The Study was undertaken by the Department of Communications with the assistance of former CFO of Seven West Media, Mr Peter Lewis, and senior executives from the ABC and SBS.
The purpose of the Study was to assist the ABC and SBS to manage their businesses more efficiently, to examine their costs of operations and to identify savings through increased efficiencies and reduced expenses without impacting on the quality and extent of programme content.
The Coalition Government appreciates that real innovation is about doing more with less. Finding efficiencies and delivering new services are not mutually exclusive pursuits. With the right reforms and leadership the ABC and the SBS will emerge from this process much stronger organisations, capable of generating even better value from the money Australians invest in their operation.
We have published the Efficiency Study with redactions of commercially sensitive material. The redactions were made at the request of the broadcasters not the Government. To read a copy scroll down to the link below.
The ABC and SBS Efficiency Study examined the national broadcasters’ ‘back office’ or ‘back of house’ costs. This refers to the day-to-day operational and financial operations, structures and processes applied to delivering ABC and SBS programs, rather than the programs themselves.
Some examples of ‘back of house” activities in a business include:
- human resource management
- information technology services
- Property and asset management
- legal services
- marketing and public relations
- administration and management
One "back of house" element in the public broadcasters' overhead, that costs approximately $290 million a year, is radio and television transmission and distribution.
It was not included in the Efficiency Study because a separate analysis was already under way which has resulted in a new funding model and contract process, with negotiations currently underway, which is expected to deliver material transmission savings that will in turn make a very substantial contribution to the savings required by the Government.
These transmission savings added to efficiency measures identified by the Study are well in excess of the Budget savings required. There is no need for the ABC to reduce the amount of money it spends on "front of house" or programming.
In total, including the 1 per cent down payment announced in the May Budget, the full savings the ABC and the SBS will return to the Budget amounts to $308 million over 5 years.
For the ABC this means it will receive $5.22 billion over 5 years rather than $5.47 billion, a saving of $254 million or 4.6 per cent.
For the SBS this means its operating budget will be reduced by $25.2 million or 1.7 per cent over the five year period. A legislative change to allow SBS to generate further revenue by changing its advertising arrangements will bring the total savings returned to the budget to $53.7 million or 3.7 per cent.
These efficiencies represent a modest saving in comparison to the Government's continued investment in national broadcasting of more than $6.61 billion over the same five year period.
Yes, you can read the ABC and SBS Efficiency Study here
You can also read the Ministers speech announcing the savings here
The financial information contained in the ABC and SBS Efficiency Study was provided by the two broadcasters strictly on the basis that it would remain confidential.
The government has now sought permission from both broadcasters to release the report. They have agreed to the release of a redacted version. All of the redactions are at the request of the broadcasters.
The ABC and SBS are independent corporations created under their respective Acts and the CAC Act. The Parliament has established this independence to make sure that what is broadcast is free from political influence. However, the Minister is accountable to the Parliament for the performance of agencies within his Portfolio and performance relates to many aspects of their operation that are distinct from programming decisions. In the context of this study, the Minister has a responsibility to ensure that public funds allocated to the broadcasters are used effectively and efficiently
It is important to remember that the Study was not designed to be the last word, but an important part of an iterative process that would see both public broadcasters explore the potential for operating more efficiently. So it is entirely to be expected that both ABC and SBS have found that some of the Study's recommendations were less compelling than other cost savings measures of a similar kind not canvassed in the Study.
In the case of the ABC, Managing Director Mark Scott, has announced that the ABC has responded to the Efficiency Study by launching 40 cost cutting programs in the broadcasters' support services or ‘back-office’ operations – these are the ABC’s own set of numbers, building on the efficiency study, and where the ABC believes it can modernise its business and be more efficient with taxpayers money
As mentioned above the government cannot direct the ABC what to do with their funding, but as ABC and SBS management know very well, following the completion of the Efficiency Study, in which their finance executives assisted, there is more than ample capacity for the national broadcasters to achieve substantial savings without impacting on programming. Suggestions that popular programmes or services are at risk because of Budget savings are not credible.
If the ABC want to make programming decisions to adjust to viewing and listening trends, respond to the changing media cycle, ensure it is not (in its view) over-servicing its audience in a particular genre, or shift its resources to target online and mobile content; that is its choice. But they are decisions for the management and board of the ABC, not the government.
In terms of ABC programmes such as Bush telegraph, State based ABC 730, Mark Scott and his executive team explained the reasons for those decisions in a recent Senate Estimates Hearing
In terms of SBS programme, Dateline, Managing Director Michael Ebeid was quoted recently in a Fairfax article saying that "I'm absolutely confident that we as an organisation have the ability to absorb further cuts ... without compromising on our content." The SBS went on to say that Any changes to Dateline that we make would be completely unrelated to any outcomes of the government funding review process
Will There be Cuts to ABC Local Radio?
There is nothing more clearly within the letter and spirit of the ABC's Charter than its provision of local radio services in regional and rural Australia. The ABC has the most extensive broadcasting network in Australia—this is one of the ABC's greatest strengths.
The ABC and SBS Efficiency Study noted (page 80) that in the absence of commercial providers, the ABC’s Local Radio service is relied upon for local news. It also acknowledged that ABC Local Radio fulfils an essential emergency broadcaster role, particularly in regional and rural Australia.
While the Efficiency Study suggested that the ABC should review the size and location of its radio stations so that they match changing population sizes, it did not recommend any changes to the level of radio coverage in rural and regional areas.
Mark Scott discussed the reasons why the ABC management and Board have made changes to local radio at a recent Senate Estimates Hearing
The ABC and SBS Efficiency Study noted (page 33) in a section headed Efficiencies already under consideration that while the study did not go to the content outputs of the broadcasters a case study about decisions relating to ABC Classic FM provided examples of the challenges faced in adapting traditional service outputs to new technology and audience demands.
In 2008, the ABC changed their production model to a mixed model with the ABC using both its in-house resources and partnering with the independent production sector.
In a recent Senate Estimates hearing ABC Managing Director Mark Scott said “on the issue of South Australian Production, yes this is a trend we have been moving to over time”.
This follows the ABC’s decision to close an internal television production unit in Tasmania in 2012. The ABC told the same Senate Estimates hearing that they don’t believe their decision to close South Australia internal production will result in less television being made outside of Sydney and Melbourne. Mark Scott cited the Award winning ANZAC Girls as an example of a successful partnership with the independent production sector filmed in South Australia.
The reduction to SBS’s appropriation will be partly offset through an amendment to the SBS Act, which will allow it to earn an additional advertising revenue over five years. The Government is proposing to amend the Special Broadcasting Service Act 1991 to:
- cap the total amount of advertising on the SBS at its current level of 120 minutes per day;
- allow SBS to schedule up to 10 minutes of advertising in any given hour; and
- enable SBS to earn additional revenue through product placement.
The Government anticipates that these amendments will allow SBS to receive an additional $8-9 million of advertising revenue per annum, which represents only a minor increase when compared to the $3.9 billion the commercial broadcasting sector received in 2013-14.
It will not surprise you that I often get emails from people complaining about the perceived bias of the ABC, but what may surprise is that not infrequently an email alleging the ABC is riddled with leftists and hopelessly biased against the Coalition Government will be followed by one complaining that the ABC has been giving Government ministers foot rubs instead of interviews and is little more than a propaganda unit for the Liberal Party! Of course it is all in the eye of the beholder, but I have to say that complaints about the ABC leaning to the left are much more common than those alleging a bias in the other direction.
I spoke about this matter in a recent speech on the public broadcasters and the best response I can give is by extracting it below.
"Equally I propose to recommend to the Board that the position of Editor in Chief no longer be combined with that of Managing Director. It creates the impression that the Managing Director is directly in charge of ABC News and Current Affairs which he is not, and given the wide range of his responsibilities, could not be.
The Board should expect the head of news and current affairs, like the CFO, to report directly to the Board as well as to the managing director thus enabling the Board to discharge its statutory obligation referred to below.
Another matter is providing more granular detail on where the ABC, and SBS, spend their money and how it relates to their charter obligations.
In my view the ABC and SBS should so far as possible seek to be as transparent as a public listed company. The best cure for suspicion is sunlight.
Other matters I propose to include are to co-operate closely (between broadcasters) to maximize the efficiency of public broadcasting in Australia (as identified in the SBS Act) and to set out each year the steps the Board has taken to meet its statutory obligations including that in section 8(1)(c) of the ABC Act " to ensure that the gathering and presentation by the Corporation of news and information is accurate and impartial according to the recognised standards of objective journalism."
This last point is a very important one, and I acknowledge Mr Spigelman's recent reviews of the ABC's news coverage of certain issues.
But it is widely thought (including by many people who either write to me or write about me) that the Minister is responsible for ensuring that the ABC's news and current affairs is accurate and impartial.
The Government does not and should never have any control over the news and current affairs of the ABC or SBS. Mr Putin's model of media management is no more worthy of emulation than his foreign policy.
But their boards are responsible for their objectivity and accuracy. I have on occasions heard directors say "they do not want to get involved" Well if they do not want to get involved they should resign. The Board of each broadcaster has that responsibility and must discharge it, and be seen diligently to discharge it."
 ABC and SBS are statutory authorities under the CAC Act. The Australian Broadcasting Corporation Act 1983 (ABC Act) provides that Section 28 (Compliance with General Policy Orders) and section 48A (General Policy Orders) of the CAC Act do not apply to the ABC (Australian Broadcasting Corporation Ac t 1983, Subsection 78(7) refers). The Special Broadcasting Services Act 1991 does not include any similar exclusions.