The ABC of Changing

With the ABC facing a future with at least $155m less ($35.3m cut in the Federal Budget, plus $120m saving from the demise of Australia Network) than was expected, nothing is sacred. Television and radio current affairs flagship programmes are as much at risk as the myriad of vital behind the scenes support functions. Now that Peter Lewis, the government-appointed ABC efficiency auditor, has been appointed to the ABC Board, penny-pinching projects and efficiency drives are virtually assured. Restructures won’t be far away either – and that’s usually corporate code for redundancies.

But who wins?

The Federal Government has made a gain of $155 million to spend elsewhere. Is that significant in a budget with expenditure of $415b? Joe Hockey could’ve found similar savings by purchasing 57 of the F35 Joint Strike Fighter planes rather than 58, or by defunding the unpopular National Chaplaincy Service for about four years…but those don’t sit well with the Liberal Party’s conservative agenda. Financially, it’s a modest gain for the Budget at best.

The ABC is to some extent a soft target, and a very appealing one for a government which is not a fan of the national broadcaster. Almost every front bench minister in the Abbott government has endured some discomfort at the hands of ABC journalists. Conservative commentators such as Chris Kenny (a former Liberal senior staffer and unsuccessful Liberal candidate) and Janet Albrechtsen (a member of the panel that oversees appointments to the ABC board) see this as institutionalised bias against the Abbott government, rather than a failure of the government ministers on air.

In fact, both Kenny and Albrechtsen write for The Australian, so the ABC probably does look fairly “left” from their conservative perspective. Despite the numerous reviews, audits and surveys into the perception of bias at the ABC, no evidence of systemic bias has been found.

The on-again, off-again budget emergency and resulting slash and burn budget has provided the Government with the opportunity to adjust the perceived imbalance. Having said that, there’s no proof that a leaner news and current affairs operation would be any friendlier towards the current government.

The loftier benefit might just be the one suggested by Liberal Senator Cory Bernardi, a long-time critic of the ABC’s perceived progressive agenda. Senator Bernardi noted that the ABC’s recent expansion into online news would be at the expense of established commercial media, particularly newspapers. Given Prime Minister Tony Abbott’s close relationship with Rupert Murdoch, and Murdoch’s ability to drive their shared agenda through his newspapers, Senator Bernardi is probably hoping that scaling back the ABC would result in their withdrawal from the online news space. His preference seems to be for the ABC to stay out of online news altogether, clearing the way for organisations such as Murdoch’s News Corporation and Fairfax Media to battle it out for online supremacy, as they have done for decades with printed newspapers.

But the development of the online platform as a legitimate news delivery mode has undermined the old Murdoch-Fairfax press duopoly; it simply doesn’t exist online.

The fundamental flaw in Senator Bernardi’s argument is that people who turn to ABC Online for news are unlikely to switch their allegiance to Murdoch’s news.com.au or newspapers. They would be far more likely to select from the many other news services: The Guardian, The Saturday Paper, the Fairfax titles, and for international news, BBC Global, New York Times and almost every other news organisation on the planet. 

When some ABC personalities’ salaries were accidentlyrevealed late last year, some on the anti-Aunty train will continue to call for salary cuts – a dangerous option at best. The ABC’s commercial rivals earn up to ten times the salaries of the ABC team. Cut the salaries a little, and the impact on the bottom line will be negligible. Cut more than a little, and the ABC would run the risk of losing their top-rating stars. 

Peter Lewis’s appointment to the ABC Board may indicate the opposite approach; after conducting an efficiency review of the ABC, his focus will be on trimming the back office areas and restructuring. Looking at the current ABC structure (above), there are obvious opportunities.

Forgive the management-speak: there are potential synergies available in reducing the overall number of director-level positions, and. in combining departments with related functions. The hypothetical restructure (below) reduces the number of Directors from the current thirteen (plus State/Territory Directors) to nine (plus State/Territory Directors), but makes the assumption that all thirteen areas are required. Of the four that have disappeared, three have been folded into the remaining nine departments. The last director-level position is the CEO – ABC International. Is this position required at all?

Further synergies may be found by rolling SBS into the picture in the areas of Corporate Services and Operations.

The massive downside of a restructure like this is that the newly organised corporation still needs to find around $35m in savings, and in order to preserve programme quality, these savings will largely come within the areas shaded red: the people no-one sees or hears.

Right now, the ABC needs to do two things: the first is to revisit its current strategy to ensure that the existing strategy aligns with both the ABC Charter and current output.

The second thing to do is to keep on being our dependable Aunty ABC, complete with Jemima and Big Ted, Tony Jones and Leigh Sales, Spencer Howson and Mark Colvin, two Bananas, News 24 and iView. 

The ABC of Cost-Cutting

"The savings sought from the ABC are not of a scale that will require reductions in programme expenditure. The ABC may choose to cut programming rather than tackle back office and administrative costs - but that's the ABC's call."

These were the words of Communication Minister Malcolm Turnbull earlier this week, speaking about the likelihood that the ABC will have to scratch some of its most respected current affairs programmes due to the Government’s budget cuts.

The decision to cut $35.5m from the ABC’s operating budget has already been made, and it’s just been announced that Peter Lewis, the man who was tasked with the recent Efficiency Audit, has been appointed to the ABC Board. In all likelihood, Mr Turnbull would have been aware of Mr Lewis’s appointment before declaring it the “ABC’s call”.

While Peter Lewis’s influence as a board member may sway the balance towards cutting back office and support roles rather than programmes like Lateline, the question remains whether the ABC should be facing cuts at all.

The argument in favour of cuts to the ABC are predicated on the “budget emergency” being real, and involve two areas: the commercial media environment and the perceived bias of the ABC.

Shouldn’t we be looking at what the ABC provides and questioning its worth, rather than questioning the cost to provide it? Shouldn’t someone be asking what we want from Our ABC? Shouldn’t we be looking at the ABC Charter – a very handy piece of legislation, reprinted below – and determine if the Charter is still relevant, and then, if the ABC is meeting its charter? 

Shouldn’t we be looking at the ABC’s performance against that Charter, and asking our government if the organisation can meet the obligations detailed within the charter while sustaining a $35.5 million dollar budget cut, and without the Australia Network?

For the curious, here’s the Charter.

Charter of the Corporation 

             (1)  The functions of the Corporation are:

                     (a)  to provide within Australia innovative and comprehensive broadcasting services of a high standard as part of the Australian broadcasting system consisting of national, commercial and community sectors and, without limiting the generality of the foregoing, to provide:

                              (i)  broadcasting programs that contribute to a sense of national identity and inform and entertain, and reflect the cultural diversity of, the Australian community; and

                             (ii)  broadcasting programs of an educational nature;

                     (b)  to transmit to countries outside Australia broadcasting programs of news, current affairs, entertainment and cultural enrichment that will:

                              (i)  encourage awareness of Australia and an international understanding of Australian attitudes on world affairs; and

                             (ii)  enable Australian citizens living or travelling outside Australia to obtain information about Australian affairs and Australian attitudes on world affairs; and

                   (ba)  to provide digital media services; and

                     (c)  to encourage and promote the musical, dramatic and other performing arts in Australia.

Note:          See also section 31AA (Corporation or prescribed companies to be the only providers of Commonwealth‑funded international broadcasting services).

             (2)  In the provision by the Corporation of its broadcasting services within Australia:

                     (a)  the Corporation shall take account of:

                              (i)  the broadcasting services provided by the commercial and community sectors of the Australian broadcasting system;

                             (ii)  the standards from time to time determined by the ACMA in respect of broadcasting services;

                            (iii)  the responsibility of the Corporation as the provider of an independent national broadcasting service to provide a balance between broadcasting programs of wide appeal and specialized broadcasting programs;

                            (iv)  the multicultural character of the Australian community; and

                             (v)  in connection with the provision of broadcasting programs of an educational nature—the responsibilities of the States in relation to education; and

                     (b)  the Corporation shall take all such measures, being measures consistent with the obligations of the Corporation under paragraph (a), as, in the opinion of the Board, will be conducive to the full development by the Corporation of suitable broadcasting programs.

             (3)  The functions of the Corporation under subsection (1) and the duties imposed on the Corporation under subsection (2) constitute the Charter of the Corporation.

             (4)  Nothing in this section shall be taken to impose on the Corporation a duty that is enforceable by proceedings in a court.

Liberal Senator Cory Bernardi, in his argument in favour of slashing the ABC’s funding to dust, seemed to suggest that the ABC is too successful. 

"The ABC now has 100 per cent radio and television market penetration and is starting to encroach upon the commercial media via what could be termed the newspapers of the 21st century.

"Their growing online news presence puts financial pressures on existing commercial media operators. Unless we can redress that, media diversity in Australia may suffer."

It’s a curious argument that the success of the public broadcaster is a threat to media diversity, and therefore a threat to the commercial success of such media behemoths as Murdoch’s News Corporation.

The difference between the purpose of the ABC and the purpose of any commercial media organisation is that one has a responsibility to Australians, while the other has a responsibility to its shareholders. Contrary to Senator Bernardi’s read of the situation, the ABC is doing exactly what it was commissioned to do: reach as many Australians as possible.

The issue of perceived bias has been hanging around the ABC for as long as I can remember, and often swings with – or more accurately, against – the current government, particularly if it’s a conservative government. According to a recent review conducted by respected veteran journalist and producerGerald Stone, the proportion of stories deemed to be ‘of concern’ is extremely low. 

For now at least, Australia has a public broadcasting network which boasts a reach of near 100% for its radio and television services, is widely thought to be impartial, and is thought by 85% of Australians to be “of value” to the community. 

Whether the cuts are made to programming or back office roles, where is the national upside in threatening the credibility or functionality of the organisation?