Despite some reprieve in the 2019 federal budget, the ABC is still in dire financial straits. More job losses and a reduction in services remain on the agenda.
The Coalition government has provided another three years of tied funding of A$43.7 million specifically for the national broadcaster’s “enhanced news-gathering” program. This program supports local news (particularly regional and outer-suburban news gathering), national reporting teams and state-based digital news.
But this funding doesn’t address the broadcaster’s need for more stability in its operational funding.
In July, the ABC will start to feel the full impact of a three-year, A$83.8 million indexation freeze on its funding, which was contained in the 2018 budget. So devastating is the size of that cut – and the ones prior to that – that ABC managers are almost completely focused on money, undermining their capacity to be strategic about the future.
There is no provision in the 2019 budget to restore the funding lost over the past six years and certainly no boost to cater for the dynamic and changing media environment.
Audiences who value what the ABC does now – and what it needs to be doing to support Australian democracy into the future – should take a closer look at the numbers, the way the money has been allocated and the impact of that.
Accumulated losses to ABC are staggering
To illustrate the need for more secure operational funding for the ABC, one of the authors of this article, Michael Ward, conducted research on just how much the broadcaster stands to lose in the aggregate over the course of an eight-year period. Ward used a number of public financial sources to build the table below, including ABC portfolio budget statements and ABC answers to Senate Questions on Notice
One of the difficulties in looking at budgets is the way forward estimates work. As the figures in the table show, the past six budgets have included measures to reduce, remove or freeze (indexation) ABC funding, without adding any new funding initiatives.
This has resulted in an accumulated reduction in available funding of A$393 million over a five-year period, starting from May 2014. According to current budget forecasts, this also means the ABC stands to lose A$783 million in funding by 2022, unless steps are taken to remedy the situation.
The Coalition government and others would argue, however, the ABC actually received a reprieve in this year’s budget with committed funding for “enhanced news gathering” because it treats as “new” the renewal of tied fixed-term funding as it expires.
The “enhanced news gathering” and digital delivery funding was first enacted by the former Labor government in 2013. Although “enhanced news gathering” funding has been renewed twice by the Coalition government since then, including in this year’s budget, the amount allocated for the program was slashed in 2016.
So, while it appears that the current budget announcement is good news for the ABC, the reality is, it is simply a continuation of what should be seen as core business.
ABC budget cuts will hit media innovation
One way governments of all ilks have tried to control the ABC – and to win voters over – is by providing tied funding to specific programs like this. One of the earliest examples of tied funding was a National Interest Initiative by the Howard government in 2001, and later the Rudd government’s Children’s Channel and Drama Funding Initiative of 2009. These were seen as core to the ABC’s work, and were eventually made part of the ABC’s ongoing budget.
The problem, of course, is that voters do not understand the impact of the cessation of limited-term, tied funding programs.
We argue that tied funding is also contrary to the principles of independent public broadcasting because it effectively forces the broadcaster to prioritise its activities and programs at the current government’s whim. It also inhibits longer-term effective financial planning by the ABC.
Tied funding used by all parties
If elected, the ALP has committed to restore the A$83.8 million indexation freeze for the ABC included in last year’s budget. It has also promised an additional A$15 million for specific projects to restore short wave radio to the Northern Territory and add more local and regional content, emergency broadcasting and a news literacy program aimed at combating misinformation campaigns online.
Labor has also pledged “funding stability for the ABC over the next budget cycle”, though this has not come with a guaranteed boost in funding.
These commitments are important, but the freeze is just the tip of a funding iceberg that the ABC has been dealing with for the past six years. The continuation of a tied funding approach doesn’t address the underlying budget problem. More needs to be done.
Cut here: reshaping the ABC
The Journalism Education and Research Association of Australia, a group that represents journalism academics in Australia, drew on Ward’s research at the recent Senate hearing into allegations of political interference of the ABC to call for more secure operational funding for the broadcaster.
JERAA argued that the ABC has been cowed by repeated parliamentary inquiries, funding cuts and efficiency reviews. These have had a severe impact on the broadcaster’s ability to perform its important role for the Australian people, which includes production of excellent public affairs reporting, local programming, international news, children’s programming and services on a range of current and emerging platforms.
Tied funding stops the ABC from meeting the core components of its legislated obligations, particularly digital content delivery, where the cost of success – increased take up of services – carries an extra financial burden, unlike analogue broadcasting.
Unless the ABC has ongoing stability of funding and ideally an increase that allows it to keep innovating, it won’t be able to maintain relevance in this fast-moving, globalised media world, nor will it be able to continue as a watchdog on people in power, particularly governments.
In appointing Ita Buttrose to chair the ABC, the Morrison government might just have got it right, having got it so hopelessly wrong last time.
Buttrose comes with what might be called three big negative advantages:
she is not a former business associate of the prime minister
she is not a well-known climate-change denier like Maurice Newman, whom John Howard appointed in 2007
she is not a strident culture warrior like Keith Windschuttle, Ron Brunton and Janet Albrechtsen, with whom Howard stacked the ABC board in the early 2000s.
She also has many positive advantages.
She’s tough. She worked for the Packers — Frank and Kerry – and for Rupert Murdoch at senior management and board level. That is not territory for shrinking violets.
She knows the media – albeit mainly print and commercial television. She was founding editor of the ground-breaking magazine Cleo, an assertive magazine for women, openly discussing what were then taboo subjects such as women’s sexuality, which it celebrated with a nude male centrefold.
Its advertising pitch was, “What Cleo wants, Cleo gets”, a statement encouraging women to be ambitious and take their place in the world.
She went on to edit The Australian Women’s Weekly, the Packer flagship, and later was editor-in-chief of Murdoch’s Daily Telegraph and Sunday Telegraph in Sydney, before being appointed by him to the News Limited board.
As an editor in the 1980s, she exhibited a strong sense of decency and fairness by standing out against the moral panic in some elements of the media over HIV-AIDS when that disease first emerged in Australia.
Hysterical preachers thundered about how the wrath of God was being brought down on homosexuals and people who engaged in extra-marital sex. Buttrose was part of the more responsible elements of media that repudiated this untruthful and prejudicial drivel.
When tragic cases emerged of HIV-contaminated blood having been used in blood transfusions, she and others such as the then chair of the National AIDS Task Force, Professor David Penington, worked hard to restore public trust in the blood bank, once procedures had been adopted to eliminate the risk.
More recently as national president of Dementia Australia she has been a high-profile advocate for a stronger public policy response to dementia and greater public awareness of the needs of people with dementia.
Given her background, and her demeanour at the media conference at which the prime minister announced her appointment, she promises to bring strong moral leadership to the ABC.
And if it’s one thing the ABC needs in the wake of the disaster that engulfed the former chair Justin Milne and managing director Michelle Guthrie last September, it is strong moral leadership.
Buttrose said she was a devoted ABC listener who believed passionately in the ABC’s independence. She said her priority was to restore stability to the board and management.
She also endorsed the ABC’s continued involvement in digital media, which will give no comfort to those in commercial media who have been campaigning to have the ABC’s wings clipped in this area.
Twice she reiterated the level of trust the Australian public has in the ABC’s news service, making the point that on ABC news, the public got stories they did not get on commercial media.
Asked whether the ABC needed more funding, she said she had not seen the books, but if she thought more funding was needed, “I won’t be frightened to ask”.
Buttrose’s stated attitude to the ABC and the answers she gave at the media conference evoked memories of Sir Zelman Cowen.
He was appointed governor-general in 1977 after Sir John Kerr had bitterly divided the nation by sacking Gough Whitlam as prime minister in 1975.
Upon his appointment, Sir Zelman said he wanted to bring “a touch of healing”.
There is still a lot of healing to be done at the ABC, and the scrutiny arising from last year’s crisis is not over yet.
The surviving members of the ABC board are scheduled to appear next Tuesday (March 5) at the Senate inquiry into political interference in the ABC. What they did – or failed to do – in protecting the independence of the ABC will undoubtedly be a central question.
A major cause of that crisis was the stacking of the board with political mates and special-interest groups who share the government’s worldview.
The ABC Act contains a provision designed to prevent this, but it has been routinely ignored by ministers and prime ministers for decades.
The act provides for an independent nominations panel whose job is to present names to the minister for communications and the prime minister.
Ita Buttrose was not nominated by the panel, as the prime minister revealed in his announcement. Even so, it is a choice that has merit, and if she succeeds in reasserting the ABC’s independence from political interference, that will make a pleasing irony.
The government’s inquiry into whether the ABC and SBS are competing
fairly with the private sector’s media operators has given a tick to
the public broadcasters.
The report concluded: “Given their market shares, and other factors, this inquiry considers the National Broadcasters are not causing significant competitive distortions beyond the public interest”. But it did see the need for greater transparency from them.
The review arose from a 2017 deal between the government and Pauline
Hanson to get One Nation support for media law changes which
liberalised ownership rules. It has been chaired by Robert Kerr,
formerly from the Productivity Commission. The report was released by
Communications Minister Mitch Fifield on Wednesday.
The outcome will be disappointing to News Corp in particular which has
been highly critical of the ABC’s expansion in online publishing. The
former Fairfax organisation, now taken over by Nine, also complained
about the competition eating into the market of commercial media
The report said: “Competitive neutrality seeks to ensure that
competition is not distorted by public entities taking inappropriate
advantage of government ownership.
“It is not intended to prevent public entities from competing, nor to
relieve discomfort from competitive processes which are bringing
benefits to consumers as they rapidly adopt and enjoy new services”.
The inquiry found the broadcasters’ business activities in order; they
were “abiding by a best endeavours approach to competitive
neutrality.” It suggested there should be some improvements in
transparency and internal procedures.
Beyond that, “the question arises as to how competitive neutrality
principles about competing fairly without distortion might apply to
the free services delivered by the ABC and SBS.
“Free ABC and SBS services are having some competitive impact.
Submissions included complaints about the ABC’s online news service
and SBS’ multi-channel and streaming services. But the National
Broadcasters are established and funded to provide free services. So
long as they operate within their statutory Charters they are
operating in the public interest”.
The report said submissions questioned whether the broadcasters were
operating within their charters. But, it said, these charters were
very broad, and reporting against them “is not detailed or robust
enough to settle doubts”.
“Accountability is difficult, especially as there is no opportunity
for Charter complaints to be addressed”.
The broadcasters should improve their reporting of charter performance
in the context of competitive neutrality. “If this enhanced reporting
does not occur, the government should consider a way of managing
complaints about Charter performance in this area,” the report said.
“While the National Broadcasters are not prohibited from competing,
some improvements in the way they interact with markets should be
The report also said the government should consider options for a
longer term funding framework for the national broadcasters,
accompanied by increased transparency and accountability.
Fifield said he recognised the broadcasters’ charters were broad and
allowed flexibility in how their boards implemented them.
“It is now up to the national broadcasters to act on these
recommendations,” he said.
Labor’s communications spokeswoman Michelle Rowland said the
government’s “fishing expedition” had spent half a million dollars to
establish what the public broadcasters had said all along – that they
“are operating in a manner consistent with the general principles of
“Australians trust and value the ABC and SBS and should not have to
foot the bill for Mitch Fifield and Pauline Hanson’s vendetta against
public broadcasting,” she said.
Also in return for Hanson’s support the government agreed to bring in
legislation to require the ABC to be “fair” and “balanced” in its
Under the legislation, the board would be required “to ensure that the
gathering and presentation by the Corporation of news and information
is fair, balanced, accurate and impartial according to the recognised
standards of objective journalism.”
But the legislation is bogged down, with no chance of being passed
before the election.
The government has yet to appoint a new ABC chair, after the implosion
within the organisation involving the board sacking managing
director Michelle Guthrie and the resignation of Justin Milne as chair
amid a row over editorial interference.
In March this year, Sunrise aired a panel discussion about the removal of Indigenous children from dangerous or abusive family situations.
It wrongly claimed that Indigenous children could not be fostered by non-Indigenous families and one panellist, commentator Prue MacSween, suggested that the Stolen Generation might need to be repeated in order to save children from physical and sexual abuse.
The reaction was swift and fierce: the segment was condemned as racist and insensitive, with many questioning why the panel featured no experts or Indigenous people. There were protests at the show’s Sydney studio, and multiple complaints were made to the Australian Communications and Media Authority.
This week, ACMA announced that the Channel Seven breakfast show did indeed breach the Commercial Television Industry Code of Practice in airing false claims that Indigenous children could not be placed with white families.
It was also found that the segment provoked “serious contempt on the basis of race in breach of the Code as it contained strong negative generalisations about Indigenous people as a group”.
Seven has defended their actions, labelling the ACMA’s decision as “censorship” and “a direct assault on the workings of an independent media”. They are also considering seeking a judicial review of the decision.
However, it is not correct to assess ACMA’s decision, nor its role, as censorship. Rather, the ACMA monitors and enforces basic journalistic principles governing ethics and responsibility.
The decision is more symbolic than material – Channel Seven will not be forced to pull the segment from online; indeed, it is widely available. ACMA also has no power to order any compensation to be paid to a wronged party or fine the broadcaster; nor can it force Channel Seven to apologise or correct its error.
This dispute is but one of many examples that raises questions over the power of the media and what happens when media make a mistake, deliberately bend the truth or publish information that may cause harm to people, especially from marginalised groups.
In his research on the media portrayal of Indigenous people and issues, and the difference between sensitivity versus censorship, Michael Meadowsargues the media are resistant to admitting there is a problem with racist or insensitive coverage. He writes:
Aboriginal Australians have had to be content with a portrayal which is mostly stereotypical, sensational, emotional or exotic, with an ignorance of the historical and political context in which these images are situated.
While “censorship” is a label that is often used by the media in response to criticism, actual censorship in Australia by government or media watchdogs is thankfully rare to nonexistent. Other issue such as defamation law are greater sources of censorship.
In a 2018 report released by Reporters Without Borders, a worldwide organisation that advocates for a free press, Australia ranked 19th out of 180 countries on press freedom. This was a fall from ninth in 2017 due to of media restrictions on reporting on asylum seekers and refugees in offshore detention centres, not the role of ACMA. In fact, ACMA and the Australian Press Council were not even mentioned.
Australian journalists are expected, although not obliged, to abide by the Media, Entertainment and Arts Alliance’s Code of Ethics. This states that journalists should “report and interpret honestly, striving for accuracy, fairness and disclosure of all essential facts” and to “do your utmost to achieve fair correction of errors”.
ACMA’s finding on the Sunrise segment that featured sweeping claims such as “children left in Indigenous families would be abused and neglected”, is simply holding those responsible to the minimum standards expected, not just within the industry, but from the public, too.
In the era of “fake news”, it is not surprising that the public’s trust in journalists is low; a 2018 surveyfound only 20% of Australians deemed newspaper journalists as being “very” honest and ethical, with television reporters fairing even worse, at 17%.
The ACMA was created in 2005 following the public outcry over the infamous “cash for comment” scandals in 1999 and 2004. At the time, the then-Australian Broadcasting Authority was criticised for being “too soft” and ineffective in response, the ABA was abolished and replaced by the ACMA.
It’s incorrect to label the ACMA’s role as playing “censor” when they do no such thing. In fact, there is criticism that ACMA, like its predecessor, is a “toothless tiger” that lacks any power to actually hold the media to account.
No media can operate without a basic framework that places public interest, a commitment to accuracy and responsibility to the public.
In a statement released on September 4, ACMA chairwoman Nerida O’Loughlin highlighted this important distinction:
Broadcasters can, of course, discuss matters of public interest, including extremely sensitive topics such as child abuse in Indigenous communities. However, such matters should be discussed with care, with editorial framing to ensure compliance with the Code.
With “clickbait” and inflammatory opinion increasingly finding a home in the media, it’s more important than ever that the media respect and abide by their responsibilities to fairness and the truth. And when they cannot or do not do this, regulatory bodies such as the ACMA are essential.
Australia’s already punch-drunk streaming sector is set for even more upheaval, as CBS will launch its streaming service in Australia as early as October.
Disney is also set to launch its streaming service in 2019. Based on recent history, Australia will likely be first up when it goes global.
The question is whether Australian streamers can compete locally with the global mammoths. Doing so might require coordination the likes of which we haven’t seen before.
This will impact not just what media Australians have access to, but more than 31,000 people employed by Australian media.
We have already seen huge upheavals in Australian streaming.
Stan is the last remaining Australian streaming service from 2015, when I wrote about the official launch of Netflix in Australia. At that time there were two Australian-based subscription video-on-demand (SVoD) services, Presto and Stan.
Presto, a joint venture between Seven and Foxtel, was shut down in early 2017.
Aussie streaming services, more than just subscription
In addition to Stan, there are also transactional video-on-demand (TVoD) services in Australia, although these are discussed far less. A TVoD service is based upon a single payment being made to view singular content for a limited time, e.g. you have streaming access to the latest release for 48 hours.
Quickflix is still a streaming company, but retains the older disc mail-out service. This mail-out service could help Quickflix survive against global streaming services.
The other Australian TVoD service is OzFlix, which some Australians may not be aware of.
Its differentiation is plans to source “Every Aussie Movie. Ever.”. A big task, but its specific niche may help it survive the onslaught of global media streaming services, while also giving local content a dedicated home.
Global media giants set their sights on Australia
More recently we have seen Amazon Prime Video launch in late 2016, although it is yet to have a major uptake locally.
The arrival of CBS All Access will impact Stan particularly. Stan features a number of CBS programs, so future programming will need to be from other distributors or through greater investment in original content.
Disney is also set to acquire 21st Century Fox. This will expand its catalogue on the new streaming service beyond its already huge catalogue. The Marvel movies look set to remain on current services, for now.
Australians and streaming…. what next?
A recent Roy Morgan report found over 9.8 million Australians had access to Netflix, with Stan at over 2 million. While Stan is clearly behind, it has had a 39.2% increase in the last 12 months.
YouTube premium has over 1 million subscribers, FetchTV 710,000 and Amazon Prime Video last at 273,000 (an 87% increase year on year).
The arrival of CBS All Access and Disney will make an already crowded market only more so. But is more choice a good thing?
A 2014 Nielsen report showed the average channels receivable by US households grew from 129 in 2008 to 189 in 2013. But the average channels tuned in remained at 17.
On top of larger content libraries, the global players also have deeper pockets. Disney looks set to spend US$100 million on a new Star Wars series for its streaming service. Netflix will spend more than US$8 billion on content in 2018 alone, and Amazon last year spent US$4 billion on content.
Australian services will need to have a point of difference. Quickflix and OzFlix have their points of difference, but what about a larger service like Stan?
Stan can’t compete with the global companies on quantity of content, so it must, like others, have a point of difference.
Stan could become a premium platform for content of which some is broadcast on Nine later. That would be a similar approach to when Australian FTA broadcasters would buy US content months after it was broadcast in the US – to save on costs.
For an Australian service to compete, a better solution would be a combined approach, an all-Australian streaming service that combines the strengths and finances of the Australian media industry.
The Freeview app is an example of how Australian television has tried to work collaboratively but failed. The users can view all the catch-up content from Australian broadcasters, but to view it they are taken from the app to the specific broadcasters’ own catch-up apps.
This requires six apps in total to be installed to view all catch-up content.
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But is the Australian media industry willing to come together to fight against global streaming media companies, or will they continue to battle each other? Failure here could result in a further decline in Australian media.
The people who are turning up at Save the ABC rallies around the country are defending a cultural institution they value because they trust it.
In particular, they trust its news service. Public opinion polls going back to the 1950s consistently show it is by far the most trusted in the country.
So at this time it is pertinent to look at what creates a trustworthy news service. The cornerstone is editorial independence. As opinion polls have shown time and again, where people suspect a newspaper, radio, TV or online news service of pushing some commercial or political interest, their level of trust falls.
Editorial independence does not mean giving journalists licence to broadcast or publish whatever they want or to avoid accountability for their mistakes.
It means encouraging journalists to tackle important stories regardless of what people in power might think, then backing them to make judgments based on news values and the public interest, not on irrelevant considerations such as commercial, financial or political pressure.
Editorial independence is hard won and under constant pressure from outside the newsroom.
In commercial media, this pressure comes from big advertisers or company bosses with financial or political interests to push.
In public-sector broadcasting, the pressure comes from the federal government, which provides the funding and has powerful means of subjecting the broadcaster to intense political pressure.
A robust editorial leadership is essential to resisting this heat. It’s a daily battle. If the senior editorial management wilts, the weakness is swiftly transmitted down the hierarchy.
Middle-level editors and the staff journalists who work to them start looking over their shoulders, tempted to take easy options and avoid possible heat. The easiest option is self-censorship, dodging sensitive stories, leaving out material or watering it down.
This is where the ABC is at a crossroads. It has as its managing director and editor-in-chief Michelle Guthrie, a person with no journalistic background and who until recently showed scant signs of understanding the impact on the ABC’s editorial independence of the Turnbull government’s relentless bullying.
Then last month she gave a speech at the Melbourne Press Club in which she said Australians regard the ABC as a great national institution and deeply resent it being used as “a punching bag by narrow political, commercial or ideological interests”.
It was a start, and now the cause has been taken up by ABC staff themselves and by the wider public in the Save the ABC movement led by ABC Friends.
It is strongly reminiscent of events at The Age nearly 30 years ago, when I was an associate editor there. Then, a Save The Age campaign showed how effective a public outpouring of support for a news outlet can be when they set out to defend one they trust.
The campaign’s origins lay in concerns among senior journalists at the paper over what might happen to its editorial independence when receivers were appointed in 1990. This followed a disastrous attempt by “young” Warwick Fairfax to privatise the Fairfax company, which was the paper’s owner.
A group of senior journalists, including the late David Wilson and the distinguished business writer Stephen Bartholomeusz, formed The Age Independence Committee. It drew up a charter of editorial independence.
The key passages stated that:
the proprietors acknowledge that journalists, artists and photographers must record the affairs of the city, state, nation and the world fairly, fully and regardless of any commercial, political or personal interests, including those of any proprietors, shareholders or board members
full editorial control of the newspaper, within a negotiated, fixed budget, is vested in the editor
the editor alone decides the editorial content, and controls the hiring, firing and deployment of editorial staff.
The Save The Age campaign generated tremendous public support. Former prime ministers Malcolm Fraser and Gough Whitlam, who had barely been on speaking terms since the Dismissal 15 years earlier, joined together at the head of a public demonstration in Melbourne’s Treasury Gardens. One of the campaign slogans was “Maintain Your Age”, a pun on Whitlam’s post-Dismissal election slogan, “Maintain Your Rage”.
Eventually, the receivers signed the charter and so, after some wrangling, did the new owners led by the Canadian-born newspaper baron, Conrad Black. Black is gone but the charter remains.
Like The Age in 1990, the ABC today has strong public support.
Like The Age in 1990, senior journalistic staff, most notably the Melbourne “Mornings” radio presenter Jon Faine, and former presenter of 7.30 on ABC TV, Kerry O’Brien, have shown leadership, lending their profile and authority to the cause.
But unlike The Age, the ABC does not have publicly acknowledged bipartisan political support.
Whatever Malcolm Turnbull’s private views of the ABC, and whatever the stated policy of his government, the facts are that since 2014 the Abbott and Turnbull governments have cut $338 million from the ABC’s funding, and the federal council of the Liberal Party voted last month to sell it off.
It is quite possible that when it reports in September, the present inquiry into the ABC’s competitive neutrality will provide some impetus to this proposition or propose some other ways to clip the ABC’s wings.
It is significant in the context of editorial independence that the inquiry is taking a particular interest in the ABC news service. That is the part of the ABC most detested by politicians, and on which the present government has focused its most intense pressure.
If editorial independence weakens, public trust will weaken too. That would make the ABC an even more attractive political target for a hostile government.
ABC chairman Justin Milne has gone on the offensive against the organisation’s critics, linking the public broadcaster to preserving the nation’s identity and strongly warning against the push to clip its digital wings.
Putting the present battle over the broadcaster in an historical context, Milne said in a Wednesday speech to the American Chamber of Commerce in Australia that “Australia has reached another decision point in respect of public broadcasting, just like those of the past.
“The first was whether to establish an ABC, then whether to equip it to deliver a news service independent of the commercial media barons, then once again whether to invest in a public television service.
“And now, as we enter a digital age, Australia must decide whether it wants an ABC fit for the future, and if so, what investments the nation is willing to make to achieve that.”
Milne – who was appointed chair by Malcolm Turnbull – said that “in a world of global platforms and content, it has never been more important for Australia to retain its identity.
“And in a world of contested views and facts, it has never been more important to provide an independent and trusted voice, to promote informed democratic debate, and to drive public accountability through investments in investigative journalism.”
With reviews into the ABC underway on its competitive neutrality and efficiency, Milne said that, echoing the past, some rivals have suggested the ABC be banned from providing digital services and restricted to linear radio and television.
“Let’s be clear: if the ABC were barred from serving audiences on digital platforms, it would wither away and cease to exist. Linear broadcast audiences are in steady decline because Australians, just like people everywhere else on the planet, value the convenience of consuming their favourite content whenever, wherever and however they like.”
The competitive neutrality review, which was set up as part of a deal with Pauline Hanson, is looking at the ABC’s role in the modern media environment. An efficiency review of the public broadcasters, including SBS, was announced in May, when the budget froze the ABC’s funding until 2022, for a saving of $83.7 million.
Milne said complaints about the ABC’s coverage were taken seriously, because mistakes were made. But the biggest question facing the ABC was not whether a journalist made a mistake or even a question of bias – because some 80% of Australians thought it was not biased. The bigger question was: “How can Australia have a public broadcasting system that is fit for purpose, as efficient as possible, and just as valuable to our children as it has been to us?”
He derided the case put by commercial interests and some partisans who said public money should not be used for a media service that duplicated commercial ones. This argument was “simplistic, facile and entirely self-serving,” he said.
A key challenge facing Australians was how to maintain diversity of voice in a media landscape that was rapidly consolidating, Milne said.
Facebook, Amazon, Apple, Netflix and Google – the FAANGs – had fundamentally transformed the media landscape around the world.
“Facebook and Google alone capture two-thirds of the digital ad market in Australia. Amazon has become a trillion-dollar company. And Netflix’s annual spend on content is now three times that of all Australia’s commercial, public and pay television businesses combined.
“By contrast, audiences and revenues for incumbent commercial media organisations are tumbling, and ownership is consolidating, especially Down Under.
“Our three pay television operators have become one, owned by the Australian arm of News Corporation in New York. Channel Ten is now in US hands too. And since 2003, the number of owners of Australian newspapers has halved.
“In television and radio, some 70 per cent of the market is now owned by just four organisations. And in print, 90 per cent is owned by three organisations. These figures will worsen if speculation is correct and Fairfax merges with another incumbent, or regional television businesses merge with their capital-city partners.”
Milne said federal governments had dealt with the onslaught of the FAANGs by enabling further consolidation in Australian media, diluting ownership restrictions and boosting commercial incumbents with licence-fee cuts.
“Whatever your view on the business or political logic of this, the effect has been to hand control over many Australian media voices to businesses in the US – while substantially diluting the diversity of voices that remain.
“Those who would cripple or even abolish the ABC would clearly exacerbate that consolidation, leading to further homogeneity of voices.
“That may mean that pretty soon our kids only see American stories and perspectives to mould their morals, culture and behaviour as adults. And
those same kids would need to give up any aspiration to work in a healthy domestic production sector,” Milne said.
Bill Shorten has moved to make the ABC an election issue, promising to reverse the Turnbull government’s $83.7 million budget cut and to guarantee funding certainty over the broadcaster’s next budget cycle.
Ahead of appearing on the ABC’s Q&A program, Shorten and frontbench colleagues declared the Coalition had “launched the biggest attack on the ABC in a generation”.
In recent months Communications Minister Mitch Fifield has sent a stream of complaints to the ABC about stories, both online and on air, contesting facts and interpretations. The Prime Minister’s Office has also complained. Government frontbenchers and backbenchers frequently make cracks at or about the ABC, echoing a theme of many conservative commentators.
The ABC is also under constant attack from News Corp, driven by both ideology and commercial interests. The government has an inquiry underway into the ABC’s competitive neutrality, which was part of a deal with Pauline Hanson but also important in the context of News Corp’s argument about the government-funded ABC encroaching on financially strapped commercial media.
When the government made the $84 million budget cut – which took the form of a freeze to indexation – Treasurer Scott Morrison said “everyone has to live within their means”. Managing director Michelle Guthrie said that “the decision will make it very difficult for the ABC to meet its charter requirements and audience expectations.”
In a statement Shorten, communications spokeswoman Michelle Rowland and regional communications spokesman Stephen Jones said Labor’s commitment would ensure the ABC could meet its charter requirements, safeguard jobs, adapt to the digital environment “and maintain content and services that Australians trust and rely on”.
They said the Coalition since 2014 had “overseen $282 million in cuts to the ABC that has seen 800 jobs lost and a drop in Australian content and services”.
“Labor will stand up for the ABC and fight against the conservatives’ ideological war against our public broadcaster,” the statement said.
The promised investment “demonstrates Labor’s commitment to the ABC’s independence and to maintain the ABC as our comprehensive national broadcaster.
“Now, more than ever, Australians need the ABC – our strong, trusted and independent public broadcaster.
“At a time when too many Australians feel disengaged from their democracy and distrustful of their representatives, Labor wants to restore trust and faith in our institutions. Part of restoring trust is is supporting a healthy public interest media sector, and protecting that trusted institution – the ABC”.
Last September, One Nation leader Pauline Hanson made a deal with Malcolm Turnbull’s government: You give me an inquiry into the ABC and I’ll support the changes you want to make to media ownership laws.
The government agreed to do this in the form of an inquiry into the ABC’s competitive neutrality – and broadened it to include SBS.
It was clear at the time this had the potential to do real damage to the national broadcaster.
Competitive neutrality principles say an organisation should not enjoy an undue competitive advantage by virtue of it being government-funded. It is suitably arcane camouflage for an inquiry whose real purpose is to put pressure on the ABC over its news service, which Hanson had alleged was biased against her.
It was Hanson’s way of getting revenge on the ABC for its pursuit of her over the issue of funding for her senate re-election campaign in 2016.
And now we know the shape of this competitive neutrality inquiry. We know who is conducting it, and last week we got to see the issues paper that the inquiry put out, which tells us what it is going to cover.
Scope of the inquiry
The chair is Robert Kerr, who has a Productivity Commission background and impeccable credentials as a free-market economist. Joining him in the inquiry are Julie Flynn, a one-time ABC reporter who used to be CEO of the commercial TV lobby group Free TV Australia, and Sandra Levy, the former head of television at ABC.
This all seems perfectly reasonable, until you remember this is mainly about online media. In that case, why have two people with television backgrounds on the panel?
Online is where the real action is now. Data from the Australian Communications and Media Authority included in the issues paper show just how dramatic the shift has been from traditional television viewing to digital online platforms for media consumption. In 2017, Australians aged 18-34 spent an average of 9.2 hours per week watching video content online compared to just 3.8 hours watching free-to-air television.
Mark Scott foresaw this when he was managing director of the ABC and drove the broadcaster hard into the digital sphere. He realised that if the ABC was not a relevant provider of digital content online, it would soon cease to be relevant.
That’s why the other big media players, especially Rupert Murdoch’s News Corp, have lobbied relentlessly to have the ABC’s wings clipped in this arena. Hanson, wittingly or not, played right into News Corp’s strategy.
As for the issues paper, the giveaway is on page 11.
There, it refers to the requirement in the ABC Act that the ABC “take account of the broadcasting services provided by the commercial and community broadcasting sectors of the Australian Broadcasting system.” In other words, the ABC is discouraged from just replicating what the commercial broadcasters do.
In that context, the paper then addresses this question to the ABC: How does it apply this requirement specifically to its on-air, iView and online news services? Nothing else. Not its drama or documentaries or narrative comedy or children’s programs. Just its news services.
The reason? That’s the part of the ABC that Hanson detests. So there’s the pay-off.
There are some broader competition questions, as well, but the only part of its vast portfolio the ABC is specifically asked about is its news output. Yet, if there is one category of program content that most obviously and unmistakably distinguishes the ABC from commercial broadcasters, it’s news.
Time for responses
Then the issues paper asks “other stakeholders” – basically the ABC and SBS’s commercial broadcasting rivals – a range of questions about ways in which they think they may have been harmed by any undue competitive advantage enjoyed by the public broadcasters.
There is no indication the answers to these questions are going to be subjected to any cross-examination by the ABC or SBS. Not that there would be time for that anyway, with just three months between the deadline for submissions in response to the issues paper on June 22 and the completion of the report in September.
So, the inquiry is a quickie. And by its own admission, it’s trampling over ground already covered 18 years ago by the Productivity Commission.
It also acknowledges in the issues paper that it has to dance its way between a number of other current inquiries, including the Australian and Children’s Content Review, the Australian Competition and Consumer Commission’s digital platforms inquiry and the broader Treasury review of the country’s overall competitive neutrality policy.
Nonetheless, the inquiry is likely to provide the Turnbull Government with ammunition should it wish to mount an attack on the ABC’s scope of operations (especially online) and give Hanson what she really wants: a rolled-up piece of paper with which to smack the ABC around the head.