Introduction

1.1        On 4 December 2014, on the recommendation of the Selection of Bills Committee, the Senate referred the Australian Broadcasting Corporation Amendment (Local Content) Bill 2014 (the bill) to the Senate Environment and Communications Legislation Committee (the committee) for inquiry and report by 25 March 2015.^[1] The bill was introduced into the Senate by Senator Nick Xenophon.

Conduct of the inquiry

1.2        In accordance with its usual practice, the committee advertised the inquiry on its website and wrote to relevant individuals and organisations inviting submissions by 7 January 2015.

1.3        The committee received 12 submissions, which are listed at Appendix 1. A public hearing was held in Adelaide on 6 March 2015. The committee also inspected the Adelaide ABC studios. The submissions and transcript of evidence may be accessed through the committee's website at.

Background to the bill

1.4        Funding cuts to the ABC were announced in the 2014–15 Budget and in December 2014. In the 2014–15 Budget, the Government announced that the funding for the ABC would be reduced by one per cent which amounted to $35.5 million over four years.[2] In addition, it was announced that the ABC's contract to run the Australia Network would be cancelled.[3]

1.5        In November 2014, the Hon Malcolm Turnbull MP, Minister for Communications, announced that further savings would be made over five years from 2014–15 for the ABC and SBS. The additional savings followed an Efficiency Study of ABC and SBS undertaken at the request of the Government by Mr Peter Lewis. The Minister stated that the study was provided to the ABC and SBS in April 2014 to assist their boards and management in identifying areas that may not have been previously explored in their efforts to improve efficiencies.[4]

1.6        The savings for the ABC amount to $254 million or 4.6 per cent of its budget. The ABC also expected that it would have implementation costs over the period of $41 million.[5] It was noted that the 'precise efficiency measures to be adopted by the national broadcasters to achieve these savings are the responsibility of the ABC and the SBS Boards'.[6]

1.7        In response to the savings announcement, the ABC indicated that it would be implementing a range of measures. This includes staff cuts, changes to processes and aggregation of activities. Mr Mark Scott, Managing Director, ABC, commented there were currently 300 redundancies anticipated, rising to 400 when efficiency programs are fully implemented.[7]

Purpose of the bill

1.8        The purpose of the bill is to amend the Charter of the ABC contained in the Australian Broadcasting Corporation Act 1983 (the Act). The Charter is contained in section 6 of the Act and is reproduced at Appendix 3.

1.9        The bill proposes to insert new subsection 6(3A) into the Act. The new subsection sets out specific requirements that the ABC must meet in fulfilling its obligations under the Charter. The new requirements are:

• paragraph 6(3A)(a) – the ABC must have a distinct and discernible presence in each state and territory, and across all platforms on which the Corporation disseminates content. This presence should include, but is not limited to, news programs (including one weekly half-hour current affairs program), investigative reporting and regional reporting. This content must be produced in, of, for and by that State or Territory; and
• paragraph 6(3A)(b) – requires that the ABC fund internal television production units in at least four States and/or Territories outside New South Wales and Victoria, and including the existing facilities in South Australia. Further, the units must be funded to the extent that they can produce content beyond news and current affairs, with the ABC required to commit 0.5 per cent of its annual budget to each unit.

1.10      In his second reading speech, Senator Xenophon noted that this bill is a response to the long-held concerns of members of the public, many parliamentarians and ABC staff members themselves. Senator Xenophon went on to state that the concerns arise from the increasing centralisation of the ABC operations in Sydney and Melbourne as many state- and territory-based production, journalism and broadcasting services are relocated. This has led to a reduction in diversity of stories and voices and an increased focus on east-coast metropolitan interests.[8] In addition, to these concerns, Senator Xenophon noted that the reduction in funding for the ABC announced during 2014 has led to job cuts and the cancellation of the state-based 7.30 program editions.

1.11      Senator Xenophon stated that the amendments are a response to the centralisation of ABC operations; will ensure a distinct and discernible presence across Australia and across all platforms; and require the funding of internal television production outside Sydney and Melbourne.

1.12      Senator Xenophon concluded that the amendments are:

...a direct response to the winding back of local content within the ABC. It is vital that Australia's public broadcaster fully represent all members of our society, not just those who live in Sydney and Melbourne. This Bill will protect and enhance the ABC's provision of local content, and will ensure it truly remains 'our ABC'.[9]

Issues raised in evidence

1.13      As noted by Senator Xenophon, there are a number of issues which the proposed amendments seek to address. The committee first considers the evidence in relation to those issues before addressing evidence commenting on the proposed amendments.

Local content

1.14      A significant issue raised by submitters was the importance of local content and the promotion of diversity by the ABC. The Communications Law Centre (CLC), for example, commented that local content is 'essential for participatory democracy, particularly in regional communities throughout Australia'.[10] Similarly, Professor McNair and Dr Goldsmith commented:

Where national news organisations rarely report on the routine affairs of state, regional and city governments, local media must ensure that citizens are aware of and understand the issues on which their locally elected representatives make policy and take decisions. Such scrutiny, a manifestation of the Fourth Estate and watchdog roles deemed to be core functions of the media in a democracy, is just as important at the local level as the national.[11]

1.15      Other submitters noted the importance of local content to communities outside metropolitan areas and pointed to the survey conducted by the Australian Communications and Media Authority (ACMA) which found that local content was important for regional Australians no matter what the media.[12]

1.16      Local content was also seen as being important for national identity and part of our cultural diversity.[13] The ABC's importance as an emergency services broadcaster providing locally relevant, timely and accessible information was also noted by submitters.[14]

1.17      Submitters argued that the provision of local content by the ABC was under threat as a result of funding cuts and moves to centralise ABC operation in Sydney and Melbourne. Submitters pointed to staff reductions, closure of production facilities in South Australia and Queensland, and cessation of state-produced 7.30 programs, local radio programs and the Bush Telegraph.[15]

1.18      The Community and Public Sector Union (CPSU) pointed to the cuts to local radio content, citing in particular the replacement of the weekly local afternoon program in Newcastle with the Sydney program. The CPSU went on to comment that 'this is a major concern to the local community, and bodes ill for other local radio programs, that the largest non-capital city no longer has its own program'.[16] The CPSU concluded that the funding cuts 'jeopardise the ABC's capacity to meet its current Charter obligations'.[17]

1.19      Heriot Media also commented on the problem of ensuring the local stories are available to communities:

Experience suggests that 'local' stories over time struggle to get to air in competition with national or international events coverage perceived to be more deserving. The risk is, without the guarantee of a half-hour slot on Friday, such local stories might not find a home or be featured prominently.[18]

1.20      Screen Producers Australia did not consider there was evidence that there has been a reduction in diversity of ABC content or that an increase of internal television production will result in more diverse ABC content. Screen Producers Australia went on to comment that there is no evidence that demonstrates any link between centralising (internal) television production to Sydney and Melbourne and a 'winding back of local content'.[19]

1.21      The CLC also supported the ABC's commitment to local content. The CLC pointed to the number of ABC news bureaux across Australia, its designation as the emergency services broadcaster, and its development of new platforms for disseminating local content and to encourage local production. In this regard, the CLC noted ABC Open and iView which have provided opportunities for local production and for those productions to be available to a wider audience.[20]

1.22      The ABC responded to concerns about local content across television, news and radio. In relation to news coverage, the ABC stated it provides more local news and current affairs reporting than any other Australian media outlet. The ABC pointed to the resources provided for news coverage including:

• fully-staffed and equipped local newsrooms in every state and territory capital city;
• 102 reporters in regional Australia;
• state-based reporting staff, including the national 7.30 program;
• local news and information and current affairs is provided on radio and online;
• in 2012–13 three new bureaux were established in Geelong, Ipswich and Parramatta; and
• resourcing up to 10 news and current affairs programs each year focused on major local issues in each state and territory.[21]

1.23      The ABC noted the provisions of the bill will require it to provide 'at least one weekly current affairs program of at least 30 minutes duration' in each state and territory. It stated that 'this provision is clearly intended to compel the Corporation to reverse its decision to replace the weekly state and territory editions of 7.30 with a national program'.[22]

1.24      The ABC went on to state that there were consistently lower audiences of the state and territory editions in comparison to the national 7.30 program. As a consequence, ABC News concluded that the more flexible, multi-platform approach to local news and current affairs developed by the ABC would deliver a more relevant service for increasingly-diverse audiences. The ABC concluded that:

It should be stressed that despite the overall cut in ABC News staff numbers, under these changes, the bulk of existing resources dedicated to regional news and current affairs will be maintained, but differently allocated.[23]

1.25      In relation to local radio content, the ABC stated that 'no other broadcaster in the country has the footprint or delivers more Australian stories, every day, to a broader audience than the ABC'.[24]

1.26      Mr Scott also responded to comments about the decrease in local content in some states and indicated that the ABC was of the view that the content being made will be more effective in reaching audiences. He went on to state:

Well, we are doing fewer hours. We were doing the state based 7.30 every week. Clearly we are doing fewer specials, but we are putting them in better timeslots and we are making more of an investment in them to reach a bigger return, and not just on television but in online and multiplatform as well. We do not think the audiences will drop on Friday night as a consequence of that. We think the audiences that these specials attract will be bigger, in fact. We have to respect the audience and what the audience is saying to us.[25]

1.27      The ABC has also established a regional division based in Launceston, Tasmania. Mr Scott commented on this development and stated:

We have great people in regional and rural Australia, but under the structures that previously existed there was not a great opportunity or incentive for them to lock in and work together. Some worked for the regional division, some worked for the rural division, you had radio online and multi-platform people, you had ABC Open people, you had ABC rural division, so you could go into one of our larger regional offices and you would find staff who reported and plugged into all these different parts of the organisation. We thought we should bring that focus under one leader who has a clear brief and responsibility for our provision of ABC content for the people who live outside the capital cities...together some of these teams, such as the Landline team and the ABC rural team. I think there are real benefits in what they can achieve together.[26]

Centralisation

1.28      The committee received submissions which outlined a range of concerns about the ABC's further moves to centralise operations in Sydney and Melbourne. Some submitters saw centralisation as a threat to the provision of a wide range of views and the marginalisation of the concerns of Australians outside these two centres.

1.29      Professor McNair and Dr Goldsmith commented that centralisation was a danger for the ABC as:

Perceptions that the ABC was retrenching to a metropolitan safe zone would fuel the opponents of public service media's alleged 'liberal elitism', and risk undermining the broad base of support which it currently enjoys with the Australian people.[27]

1.30      Submitters pointed to a number of negative outcomes arising from centralisation. The CPSU commented that there are more local stories produced and broadcast where the ABC has regional resources.[28] It was noted that following the closure of the ABC production unit in Hobart, the ABC had stated that there would be no reduction in Tasmanian content for regional and national audience. However, submitters stated that the ABC had not been able to maintain the quantity of productions in Tasmania despite it sourcing some Tasmania-related programs from independent producers.[29]

1.31      ABC Friends argued that the ABC is failing in its responsibility to reflect state diversity, particularly in television, as operations and editorial decisions become increasingly centralised in Sydney. ABC Friends argued that there are three key factors driving the loss of state programming and centralisation:

• inadequate funding – resulting in loss of program diversity and quality. In addition, inadequate funding has resulted in the ABC favouring programming that can be commissioned or acquired more cheaply because of external subsidies;
• the type of broadcaster that ABC management wants – it is claimed that the ABC, in some areas, is moving toward being a more commercial broadcaster and favouring light-weight programs whose value is measured by predictions of audience numbers. This included favouring youth audiences at the expense of the larger, older audiences. In addition, it appears that ABC management is ideologically committed to centralisation in Sydney and is favouring outsourcing; and
• the method of government support of the private production sectors undermines the ABC – ABC Friends argued that there is a financial disincentive for the ABC to produce some types of programming because it is able to commission or acquire programming that is subsidised externally.[30]

1.32      Heriot Media was of a similar view in relation to management culture. It stated that:

...the ABC's sequential closure of in-house television production activities outside of Sydney and Melbourne is not just a response to financial constraints. It also expresses a particular industry and philosophical perspective.[31]

1.33      The ABC responded to questions about the move to centralise operations in Sydney and Melbourne. Mr Scott stated:

I do not think it particularly matters where administration takes place. I think what we are really interested in here and the debate that we are having is how we can fulfil our charter around diversity of voices and diversity of programming. Some of that centralisation comes through the back-office functions and back-office services. Apart from these tiny little regional hubs we have, we have kept our local radio network in place and we are keen to report on programming that we make around the country. I appreciate there has been change there. I think it is not dramatic change.[32]

Local production

1.34      The bill proposes that the ABC must establish internal production units in South Australia and at least three other states and/or territories outside NSW and Victoria. The CPSU supported this amendment and argued that local content must be supported by local production.[33] The CPSU went on to state:

The CPSU's position on that is that regional content is best made by regional people and that it is best made locally, and that you are going to get a much more genuine quality of local content if it is made on the spot, so to speak. When we are talking about regional presence, we mean not just covering the regions from Sydney, but the ABC maintaining a presence in the regions, employing local people and producing local content.[34]

1.35      While acknowledging the ABC's financial position and the incentives of external production, Ms Sarah Hunt, CPSU, went on to comment:

...we do believe that there is a value in the ABC producing its own content in house...The ABC has traditionally been a place where skills and talent have been nurtured that have then gone out into the Australian entertainment industry and benefited the industry as a whole. We think that keeping those skills and talents within the ABC allows them to be developed. The ABC also has the option—because they are not dependent on ratings as much as other networks—to take a chance on people or on new ideas and programs that might take a little while to be established. I think that is a really good reason to have some production in house.[35]

1.36      The experience of the maintenance of Tasmanian local content following the cessation of production in Hobart was also noted by Heriot Media. It stated that:

...for whatever reasons legitimate or not, experience indicates the ABC cannot be relied upon for a consistent approach or commitment to levels of independent production in the States or Territories – that is, in the absence of formal obligation. If the Corporation no longer wishes or no longer has the financial capacity to operate internal production activities, across the nation, it should be held to account to ensure that a reasonable proportion of its screenbased commissioning and acquisition relates to the diversity of the Australian federation.[36]

1.37      However, Screen Producers Australia commented that it was not the case that internal production will lead to greater diversity of programming and that external production will lead to a reduction in diversity. Screen Producers pointed to examples where external production and co-production actually leads to more diversity. In addition, Screen Producers noted that ABC commissioning decisions are governed by a rigorous commissioning process.[37]

1.38      Screen Producers Australia stated that it was simplistic and 'patently false' to argue that having a production facility in a particular location will ensure the ABC broadcasts content about that location. It pointed to programs produced recently in the ABC Adelaide studio, such as Auction Room and Poh's Kitchen, which did not contain local content. In addition, it noted that while there may not be internal production, relevant local content can be provided by external producers contracted by the ABC. Finally, Screen Producers Australia noted that audiences do not distinguish between internally or externally produced content, they are simply 'ABC programs'.[38]

1.39      However, Mr Matthew Deaner, Screen Producers Australia, went on to comment on the need to ensure that the ABC continues its level of investment in Australian production. Mr Deaner stated:

It is critical that the ABC does not short change the Australian audiences it has by maintaining its level of investment in production. Our point is that it does not matter where that production necessarily is sourced from, but we would be most alarmed if there was a decrease in the overall amount of production that was being created by the ABC. We would also be alarmed if the balance of regional storytelling was changed.[39]

1.40      The ABC submitted that its existing internal production model is adequate to serve the needs of Australian audiences and meet its Charter requirements. It noted that it employed a mixed model of television production, commissioning television from both internal and external sources. The mixed model allowed the ABC to leverage external funding sources including Screen Australia, state and territory film funding bodies, local and international distributors and the producers themselves.[40]

1.41      Mr Scott commented on the mixed model and stated:

Our model is one that keeps internal production capability at the ABC whilst backing local production firms, creating jobs and encouraging creative industries. That is why key industry organisations that are behind the massive employment and investment in the film and television sector, like Screen Producers Australia, back our model strongly. That is why the talent that has made many of the ABC's most memorable programs over recent decades back it strongly.[41]

1.42      Mr Scott concluded that the ABC was committed to the mixed model and noted that the ABC had been able to make more programming for the investment because of 'the leverage that can come to bear around some forms of production'.[42]

1.43      In relation to South Australia, at the February 2015 Additional Estimates, Mr Scott noted that while there had been internal production, the ABC had also commissioned 34 hours of production from external producers. He went on to state that the production in South Australia had employed hundreds of people and had stimulated the local film and television industry.[43]

Digital platform

1.44      The ABC's development of new platforms for disseminating local content and to encourage local production was supported by submitters.[44]

1.45      Professor McNair and Dr Goldsmith also commented that the ABC's digital future 'need not be seen as undermining the public service remit of the corporation'. With increasing moves to digital connection, it was argued that digital investment is 'entirely rational, indeed essential if the ABC is to retain its current role as the country's national voice'. Professor McNair and Dr Goldsmith went on to comment that the ABC's digital presence 'should focus on supporting existing and well established public service functions, rather than going online for its own sake'.[45]

1.46      The CPSU supported the investment in digital development, commenting that the ABC must invest in a digital future if it is to remain relevant and meet Charter obligations. However, the CPSU did not support the closure of the production unit in Adelaide as a means of funding digital development. It argued that the amount saved in Adelaide ($1.8 million per year) 'will not make or break the ABC's digital strategy'.[46]

1.47      The CPSU, while acknowledging that digital production is cheaper than TV production, and will offer opportunities for more local content in new platforms, saw a danger in centralising digital production in Sydney and Melbourne.[47]

1.48      The CPSU made specific comments in relation to the opportunities for digital production in Adelaide. The CPSU pointed to the success of The Daters, which was originally produced by Adelaide staff for online viewing, and was subsequently moved to TV due to its popularity.[48] The CPSU went on to note that, during the course of making this program, digital content skills had been developed by Adelaide production staff. Staff had proposed that, since the ABC is taking resources out of Adelaide production in order to focus more on digital content, the skills developed could be maintained and transition into an Adelaide-based digital content unit. The CPSU stated:

...we do strongly believe that those skills exist in Adelaide and that rather than getting rid of the staff who have them they could be doing some of the ABC's future digital work from here. That proposal was rejected by the ABC.[49]

1.49      In response to a question about whether the ABC would establish a digital film unit, Mr Scott commented that it envisaged a mixed model using funds from Screen Australia and independent producers from some state-based bodies. Mr Scott concluded that 'it does not make sense for us to do that in-house. So it is unlikely that will create a unit in-house to do that work'.[50]

Reporting by the ABC

1.50      A further issue raised in evidence was accountability by the ABC. Screen Producers Australia commented that it would like to see greater transparency and a more consistent approach in reporting by the ABC. Mr Deaner, Screen Producers Australia, went on to state, in relation to the ABC meeting its requirements:

The degree to which we can do that at the moment is by identifying Screen Australia's reporting, by surveying our members directly, because they can tell us where they are investing—and the data that is in our submission comes directly from them—and by hearing what comes out of Senate estimates. We would like that to be not as higgledy-piggledy a process; we would like that to be something the ABC commits to out of this exercise in a much more consistent way that means that everyone has a bit of transparency.[51]

1.51      Screen Producers Australia cited the Broadcasting Financial Results published by ACMA as a good example of reporting obligations for commercial free-to-air broadcasters which could be replicated for public broadcasters. It noted that 'this type of reporting is a vital tool for industry and government in guiding policy development. It crucially provides a layer of commercial transparency that underpins business confidence in the independent sector'. Screen Producers Australia suggested that the data be enhanced across a range of content delivery services, including the ABC, and published more regularly.[52]

1.52      In response to questions about the ABC's accountability mechanisms, Mr Scott pointed to the annual report and the strategic plan. In addition, there is a cost and performance review of the investment that is made in the ABC through the triannual funding. This review is provided to the Department of Finance and there is other reporting to the Department of Communications. Mr Scott added:

I think it is a reasonable question as to whether in fact there is more detail that members of parliament would want on the outcomes of the ABC. We are currently undergoing an intensive internal process around creating more detail and more reporting for the management team and the board, based around our performance and our key goals. I am happy to engage in that, but I think that since we became a corporation back in 1983 there has been a detailed process of reporting on performance through a range of those outcomes.[53]

ABC South Australia archives

1.53      An issue relating to the archives of the production unit in South Australia was raised in evidence. The CPSU commented that staff being made redundant because of the closure of the production unit should be given adequate time to archive records properly. The CPSU noted that the material to be archived was highly valuable to the Australian public: it includes interviews with World War I diggers, cricketers, and recordings of South Australian sporting events. In addition, the CPSU argued that staff members are owed the right to leave the ABC, after decades of service, with dignity and respect.[54]

1.54      The CPSU noted that staff members had been given an exit date but had requested additional time to undertake archiving activities. In one case known to the CPSU, the ABC had denied the request. The staff member commented, in their letter to the ABC, that they sought time to catalogue 'a treasure trove of archived Betacam tapes that have content of local, national and international significance'. These tapes have not been formally logged and deposited in the ABC archive.[55] As the staff member is the only person who knows the contents on the tapes, the CPSU argued that it would be more cost effective for the ABC to retain the staff member for a few weeks to undertake the task rather than to send the tapes to Sydney.[56]

1.55      While not knowing of the particular case raised by the CPSU, Mr Scott responded that the material from South Australia would not be lost and will be archived. Further, archiving was a significant issue at the ABC and it was looking at how to digitise and organise its archives around the country.[57]

Issues in relation to proposed new subsection 6(3A)

1.56      While supporting the intent of the bill, most submitters did not agree with the proposed amendments citing, in particular, their impact on the independence of the ABC. For example, ABC Friends supported the intent of the bill 'to ensure the ABC has a strong local presence in all states and territories' and agreed that the Charter should be amended so that the ABC is more clearly committed to produce local content in each state.[58] However, ABC Friends saw a 'strong and overwhelming public interest to maintain the ABC's independence from government and that there are risks in introducing specificity on programming matters to the ABC Charter'.[59]

1.57      A similar view was provided by the CPSU, CLC, Heriot Media and Governance and Screen Producers Australia. The CPSU, while supporting the objective of the bill, submitted that any Charter amendment should be approached with great care as it is essential that the independence of the public broadcaster be maintained.[60] In addition, the CPSU stated that the local content and regional production problems would not be solved by amending the Charter without an increase in the ABC's budget.[61]

1.58      The CLC argued that programming and production decisions should be the responsibility of the ABC and noted that provision of local content is already contained in the Charter obligations.[62]

1.59      Heriot Media and Governance, while supporting the stated purpose of the bill, did not consider that the proposed section adequately reconciled the legislative intent with the practical responsibilities of the ABC Board and management as industry participants. It pointed to technology driven changes and the need for the ABC to remain innovative in this environment. Heriot Media concluded:

...it is unwise to link the legislated statement of purpose with detailed prescriptions as to what organising principles the ABC should apply in fulfilment of its purpose. To do so might impede unreasonably the capacity of the Board and management in anticipating or responding to trends in the digital and increasingly globalised media environment.[63]

1.60      The bill was not supported by Screen Producers Australia which argued that it amounts to regulation 'for its own sake'.[64] It also considered that the bill undermines the independence of the ABC and its Board by placing management and editorial decision-making in the hands of the Parliament. Screen Producers Australia concluded that:

Paragraphs 3A(a) and 3A(b) of the Bill fundamentally change the Charter of the ABC. These clauses have no relation to the long established goals of the Corporation to broadcast and distribute high quality content. The Bill represents a major change in the way in which Parliament interacts with the ABC and significantly reduces the independence of the ABC.

In conclusion, Screen Producers Australia submits that if the ABC loses independence there will be a broad range of unintended consequences that will ultimately shortchange audiences by reducing their access to a diverse range of screen content. The cumulative effect of the proposals in the Bill will lead to a weaker ABC.[65]

1.61      While not supporting the amendments as currently contained in the bill, ABC Friends, the CLC and Heriot Media proposed amendments which would address concerns with recent operational changes. ABC Friends suggested that only the first part of paragraph 6(3A)(a), as amended, be included in the Charter: 'the Corporation must have a distinct and discernible production presence in each State and Territory, and across all platforms on which the Corporation disseminates content'.[66]

1.62      The CLC acknowledged that there was public concern surrounding the closure of the South Australian television production unit and continuing centralisation of ABC functions due to budgetary constraints. In this regard, the CLC concluded that 'there is a case for introducing a less specific amendment [than that] proposed by the Bill to provide a minimum safeguard for the local production of content by the ABC outside major metropolitan areas'. The CLC suggested the following:

The Corporation must have a distinct and discernible presence in each State and Territory, across all platforms on which the Corporation disseminates content.[67]

1.63      Heriot Media also submitted an alternative amendment which it stated aligned with the language contained in the Act. The amendment proposed would also prescribe the intended outcome or benefit to be achieved on behalf of state and territory audiences, rather than the means by which the outcome is to be achieved. A new paragraph was proposed as follows:

Paragraph 3A(a) – the Corporation must have a distinct and discernible presence in each State and Territory, providing a reasonable amount of content across all ABC media platforms in common usage, as required to reflect the diverse circumstances and culture of the Australian federation. This presence should include, but is not limited to, State and Territory-sourced news and information relating to current events.[68]

1.64      The ABC did not support the bill. It stated:

At a general level, the ABC believes that the Bill is unnecessary, as the broad objective of ensuring that regional Australians are properly served by the Corporation is already well met. The ABC provides news, information and other media services for all Australians, including specialised services at the state/territory and local levels. The staff in its 47 non-metropolitan offices provide specifically for the needs of local regional and rural communities.[69]

1.65      The ABC went on to make specific comments about why it did not support the bill. The ABC considered the bill:

• effectively ignores the realities of the environment in which the ABC operates;
• is inconsistent with the structure and intent of the Act, including the underlying principle that the ABC should operate as an independent media organisation;
• would have a significant impact on the flexibility of the Corporation and its ability to manage its affairs efficiently and effectively;
• have the potential to conflict with duties of the ABC Board, particularly those set out in paragraph 8(1)(a) of the ABC Act, which provides that the Board must 'ensure that the functions of the Corporation are performed efficiently and to the maximum benefit to the people of Australia'; and
• would lock the ABC into budgetary allocations, production processes and programming choices that could only be altered by further legislative changes.[70]

1.66      Mr Scott further commented that the ABC:

...is an independent public broadcaster, and that independence is inextricably linked to the authority and independence of the ABC board around decision-making. Under the Act, it is the board members who are the trustees for the public, making the decisions around programming, standards and expenditure that will allow the charter obligations to be met.[71]

1.67      In relation to the costs of implementing the production requirements proposed by the bill, Mr Scott stated that the bill would impose a significant financial impost and noted that, at a minimum, there would need to be a $20 million commitment. In addition, there would be costs for state-based current affairs. Mr Scott concluded that:

There is no guarantee of additional funding in Senator Xenophon's bill. He is just indicating that we have to spend money in those places and we would have to make cuts elsewhere in the organisation. We have already gone to our back office; we have already gone to our efficiencies to make the savings that have already been demanded by the government. Effectively, Senator Xenophon's bill demands a further $20 million cut to the ABC and, as we have indicated, that $20 million would have to come out of content elsewhere if there was no additional funding guarantee in it.[72]

Committee conclusions

1.68      The committee considers that the issues to which the bill responds are significant. First, the committee is concerned that recent decisions by the ABC will impact adversely on the provision of local content, particularly in the news and current affairs area. The committee notes comments by submitters concerning the importance of local content to the democratic process, diversity and the maintenance of social cohesion, particularly in rural and regional Australia.

1.69      The experience in Tasmania, following the closure of production facilities in Hobart, was raised by submitters. It was argued that the quantity of locally focused productions has not been maintained by the ABC. This evidence concerned the committee, particularly as the ABC has commented that the closure of the production facilities in South Australia will not affect local content. The Tasmanian experience does not appear to support such an optimistic outlook.

1.70      While there has been a focus on the cessation of the state-based 7.30 programs on ABC TV, the committee notes that some local radio programs have also been replaced by those emanating from capital cities. The committee does not consider that this is a positive outcome.

1.71      The committee acknowledges that the ABC has been subject to efficiency savings. However, it also considers that the ABC has actively sought to concentrate functions and operations in Sydney and Melbourne. The committee supports the view that centralisation has the potential to undermine diversity and the provision of local content. The committee therefore considers that closure of ABC production presence in certain capital cities, and the substitution of capital city produced programs for local programs on regional radio, must be weighed very carefully against the obligations contained in the ABC Charter.

1.72      Secondly, the committee notes comments about the production model adopted by the ABC. The ABC has focused on a mix of internal and external production. The ABC commented that this model allows it to co-produce material at a much lower cost than would be the case for internally produced material. The ABC noted that lower costs were achieved as independent producers are able to access funding from sources such as Screen Australia and state-based Film Corporations, as well as because of certain tax arrangements.

1.73      The committee acknowledges the benefits of a mix production model for the ABC to maximise its production investment. However, the committee is concerned that the correct balance is maintained between in-house and external production. Without in-house production facilities, the committee believes that the ABC may diminish the skills of the workforce that it relies on to meet its statutory obligations and to respond to changes in the environment in which it operates.

1.74      One area where new skills are being developed is in digital media. The ABC has directed internal savings toward digital platforms. The committee considers that this move will ensure the ABC maintains its presence in this emerging area and notes that, as pointed out by Mr Scott, this is a core function of the ABC.[73] However, the committee does not consider that centralisation of digital skills is essential. It appears to the committee that it is short-sighted to not retain staff in Adelaide who have developed skills in digital media which could be used to support production in the Adelaide studio.

1.75      The committee is also concerned that the ABC's current accountability mechanisms are do not sufficiently transparent, or comprehensive, to enable the Parliament to establish whether the ABC is meeting its Charter. The committee considers that, given the many organisational and programming changes currently under way, greater emphasis on reporting on matters related to the Charter is required. The committee considers that reporting obligations similar to those of free-to-air broadcasters should be developed.

Recommendation 1

1.76      The committee recommends that the Commonwealth Government establish a mechanism to enable the transparent and comprehensive reporting by the Australian Broadcasting Corporation against its Charter.

1.77      Finally, the committee has noted comments relating to the archiving of important film material from the Adelaide production unit. This includes interviews with World War I diggers and sporting identities. The committee considers that this material must be comprehensively catalogued before being transferred to ABC Sydney. This would not only be more efficient, but the committee also believes it would be detrimental for this material not to be archived by those people who were involved in creating the material and have a complete understanding of its significance.

1.78      The committee will write to the ABC seeking a short extension of time for the relevant staff to undertake archiving activities.

1.79      While the committee is concerned with the overall direction of recent changes within the ABC, the committee has carefully considered the implications of amending the Charter of the ABC as proposed in the bill.

1.80      The committee considers that there is substance to concerns that the proposed amendments may impinge upon the independence of the ABC and the ABC Board. The committee considers that the ABC must be free to make decisions that ensure that its functions are performed efficiently and effectively. In addition, the committee notes that the operational environment in which the ABC works is subject to rapid change through technological developments particularly in the digital area. The committee acknowledges that the legislative framework under which the ABC operates must be sufficiently flexible for the ABC to respond to technological developments and to maintain a presence across all platforms.

1.81      For these reasons the committee does not support the bill.

Recommendation 2

1.82      The committee recommends that the Australian Broadcasting Corporation Amendment (Local Content) Bill 2014 not be passed.

Senator Anne Ruston
Chair

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