Funding for the national broadcasters

Budget Review 2018–19 Index

Dr Tyson Wils

Australian Broadcasting Corporation (ABC)

Since 1989, the ABC has been funded by a three-year appropriation known as the triennial funding system. For the upcoming triennial period of 2019–20 to 2021–22, the Government has said that there will be $3.16 billion in funding for the ABC.[1] The Budget also states that the ABC will remain fully exempt from the efficiency dividend, which is an annual funding reduction for Commonwealth government agencies introduced in 1987–88.[2] However, the Government also announced that ‘in order to ensure the ABC continues to find back-office efficiencies’ it will ‘pause indexation of the ABC’s operational funding’.[3]

According to the Minister for Communications and Arts, Senator Mitch Fifield:

In 2014 the Government commissioned the Lewis review into the efficiency of the ABC and SBS. The Government is confident further back office efficiencies can now be found. A further review of ABC and SBS efficiencies will be undertaken and will report later this year to assist the ABC in meeting this saving.[4]

The Government anticipates that the pause in indexation of ABC funding ‘will result in savings to the Budget of $83.7 million over three years’.[5] The indexation pause follows ‘efficiency savings’ from the ABC (and Special Broadcasting Service (SBS)) in the 2014–15 budget of $35.5 and $8.0 million respectively.[6] This was followed in November 2014 by much larger cuts of $254 million and $25 million respectively, aimed at ensuring ‘the ABC and SBS eliminate inefficiencies in their back office operations’. [7]

A specific measure, due to lapse in 2018–19, allocates additional funding to the levels committed through the triennial process. This measure provides support to ABC local news and current affairs services, particularly those services outside capital cities.[8] In the 2016–17 Budget, the Government allocated $41.4 million over three years for this measure.[9] Senator Fifield has stated that ‘the Government has taken no decisions regarding the future of this initiative’ and that ‘funding remains in place until 30 June 2019’.[10]

In response to the pause in indexation, ABC Managing Director Michelle Guthrie stated that the ABC is ‘very disappointed and concerned that after the measures ... introduced in recent years to deliver better and more efficient services, the government has now seen fit to deliver what amounts to a further substantial budget cut’;[11] and that ‘the impact of the decision [cannot] be absorbed by efficiency measures alone, as the ABC had already achieved significant productivity gains in response to past budget cuts’.[12]

Media, Entertainment and Arts Alliance (MEAA)’s Media Director, Katelin McInerney, has said ‘It is becoming increasingly difficult for the ABC to deliver original investigative journalism and local and regional newsgathering with ...deep cuts to its funding’;[13] while MEAA’s Equity Director, Zoe Angus, stated that the ‘cuts also represent a dangerous threat to the creation of original Australian television production, particularly drama’.[14]

Special Broadcasting Service (SBS)

The Government has announced that it will provide $17.6 million in funding over two years to SBS.[15]

This includes $14.6 million over two years from 2018–19 to replace revenue from advertising and product placement that SBS could not raise because legislation to provide the broadcaster with further ‘advertising flexibility’ has not been passed by the Parliament.[16] The Communications Legislation Amendment (SBS Advertising Flexibility) Bill 2017 proposed to amend the Special Broadcasting Service Act 1991 to allow SBS to increase its revenue base by:

  • permitting it to ‘air more advertising and sponsorship announcements in prime time viewing periods’ and
  • to ‘earn additional revenue through the use of product placement endorsements in its commissioned programming’.[17]

The Bill was laid aside by the House of Representatives on 10 August 2017.[18]

The Budget also includes $3.0 million for SBS to ‘support the development of Australian film and television content’.[19]

 


[1].         Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 79.

[2].         N Horne, The Commonwealth efficiency dividend: an overview, Background note, Parliamentary Library, Canberra, 13 December 2012.

[3].         Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 79.

[4].         M Fifield (Minster for Communications and the Arts), Strengthening Australia’s connectivity, creativity and cultural heritage, media release, 8 May 2018.

[5].         Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 79.

[6].         Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2014–15, p. 66.

[7].         M Turnbull, National broadcasters to implement efficiency measures, media release, 19 November 2014.

[8].         Australian Government, Budget measures: budget paper no. 2: 2013–14, pp. 98–106.

[9].         Australian Government, Budget measures: Budget paper no. 2: 2016–17, p. 70.

[10].      M Fifield (Senator Mitch Fifield), Facebook post, 9 May 2018, accessed 9 May 2018. The Senator made this announcement in reaction to a number of organisations and commentators who said that the Government was not renewing the special funding or had made a decision to cease it. See, for example, N Leys, ABC indexation freeze amounts to cuts, media release, 8 May 2018.

[11].      D Davidson, ‘Federal budget 2018: Guthrie vows to oppose ABC indexation freeze’, The Australian, 9 May 2018.

[12].      N Leys, ABC indexation freeze amounts to cuts, media release, 8 May 2018.

[13].      Media, Entertainment and Arts Alliance, Cuts to ABC ‘dangerous and irresponsible’, media release, 9 May 2018.

[14].      Ibid.

[15].      Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 79.

[16].      Ibid.

[17].      R Jolly, Communications Legislation Amendment (SBS Advertising Flexibility) Bill 2017, Bills Digest, 98, 2016–17, Parliamentary Library, Canberra, 2017.

[18].      The first Bill to give SBS more flexibility in its scheduling of advertising and sponsorship announcements was introduced by the Coalition Government in 2015. Labor Senators, Greens Senator Scott Ludlam and Independent Senator Nick Xenophon issued a dissenting report at the conclusion of the Senate Environment and Communications Legislation Committee inquiry into the Bill, which was subsequently rejected by the Senate on 24 June 2015. For more information see ibid., pp. 6–7.

[19].      Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 79.

 

All online articles accessed May 2018 

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