Additional Comments by Independent Senator Nick Xenophon

Whose ABC?

1.1        The core argument at the centre of this issue is whether the ABC, as a cultural institution that is fully funded by the Australian taxpayer, should continue to be a creator, producer and owner of a large proportion of its content, or be transformed into merely a transmitter of externally produced programs owned by private independent production companies.

1.2        The August 2, 2011 announcements of forced redundancies in BAPH states are of grave concern and raise serious questions about the future ability of the ABC to produce internally-made content outside of Melbourne and Sydney in the long term.

1.3        Forced redundancies in South Australia will see a 50 per cent reduction in local program making capacity to a unit that has been delivering high-quality and cost-effective content for over a decade.

1.4        While submitters to the inquiry including the ABC and independent production companies have suggested that ABC management are supportive of a mixed-production model, the manner in which this model is implemented is critical.

1.5        As Simon Whipp of the MEAA argued in his appearance before the committee, it is crucial that there is a "critical mass of in-house production to ensure that the benefits that in-house production brings to the ABC and the industry are not lost".[1]

1.6        The perceived short term gain achieved by outsourcing program production to the private independent sector must be measured against the long term cost in terms of loss of content ownership and intellectual property rights in a multi-platform environment.

1.7        Loss of ABC ownership of content affects future revenue streams in terms of program sales and sales of program formats, DVD sales, merchandise, intellectual property rights as well as the future ability of ABC archives to licence the sale of ABC owned content.

Less for more

1.8        In 2010, the ABC internally-produced 40 episodes of Talking Heads and 40 episodes of Poh's Kitchen in South Australia, 40 episodes of Can We Help? in Perth and 40 episodes of Collectors in Tasmania, totalling 160 half-hour episodes of internally-produced content.

1.9        Should the slated cuts to internal programming proceed, BAPH states will create 13 episodes of Poh's Kitchen and 12 episodes of independently produced and owned programs from the South Australian Film Corporation FACTory initiative, 12 from the ScreenWest initiative and 10 of an auction program in Tasmania.

1.10      This equals a reduction of 70 per cent of on-air output for the same cost. Furthermore, only 15 per cent of these programs will be owned in entirety by the ABC.

1.11      However, it is not just an issue of airtime. According to the SAFC Program Guideline:

Based on a minimum per episode budget of $125K (to produce 20 episodes) a finance plan may consist of: $40k ABC Licence Fee, $15K ABC Resources and Facilities (equity contribution in kind), $50K SAFC Equity Investment, $20K Producer Offset.[2]

1.12      The CPSU, among other submitters, raised concerns with this arrangement. As its submission to the Committee states:

Under this arrangement a private sector producer may enter into this arrangement and obtain equity in a production that has been fully funded by the taxpayer, i.e. $55,000 from the ABC, a further $20,000 from the Commonwealth Government through Screen Australia and a further $50,000 from South Australian taxpayers.

The ABC will have invested $55,000 in the production and hold no rights to the program. Its money will have simply paid for a licence fee. That licence fee is likely to cover a limited number of showing rights...[3]

1.13      To draw the parallel, this means twice as much money will be spent to produce one SAFC externally produced episode as compared with the money spent on an internal episode of Talking Heads for example, which was produced at a cost of $50,000 per episode.[4] Furthermore, the ABC will not retain the content rights to programs produced under the SAFC initiative as they do currently with Talking Heads.

1.14      This is of considerable concern, particularly given this information does not appear to be widely known to the taxpayer.

Ratings versus responsibility

1.15      Many submitters to the Inquiry discussed a perceived deviation from the ABC Charter as a result of recent programming decisions.

1.16      As discussed in the majority report, the ABC Charter specifically requires the ABC to provide programs that contribute to a sense of national identity and inform and entertain, and also provide programs that reflect the cultural diversity of the Australian community.

1.17      The decision of the ABC to axe Art Nation and 'rest' Collectors, for example, has been cause for considerable community concern and feedback.

1.18      Mr Sam Walsh, Chairman of the Chamber of Arts and Culture WA Incorporated, submitted that the ABC was "perilously close to multiple breaches of its Charter" following the decision to axe Art Nation and the "virtual decimation" of the ABC Arts Unit.[5]

1.19      Ms Julie Adams, President of the Public Galleries Association of Victoria, similarly suggested that it was critical the ABC continued to broadcast unique and diverse arts content:

Art Nation and the specialist Arts Unit produced and presented 350 stories about Australian art last year, with numerous stories, previews, blogs and extras delivered online. These stories play a critical role in the ABC achieving its Charter of contributing to a sense of national identity and reflecting cultural diversity; transmitting Australian culture; and encouraging and promoting the arts in Australia.[6]

1.20      As per its Charter, the ABC is required to provide a balance between broadcasting programs of wide appeal and specialised broadcasting programs. However, the axing of internally-made programs such as Art Nation, New Inventors, Can We Help? and Talking Heads, is a worrying trend that raises concerns about whether the ABC will in fact continue to provide 'specialist broadcasting programs' that reflect Australia's national identity.

1.21      The CPSU discussed this trend in its submission to the Inquiry:

There have been significant shifts in resources within the ABC over the past few years. These have resulted in the movement of close to $20 million from TV to fund the creation of News 24. Programming styles have changed in the same period. The ABC appears to be more concerned now with its prime time audiences at the expense of its specialist audiences. This in part is reflected in the shift towards infotainment programs, and a shift away from researched documentaries and towards observational/reality style documentaries. These shifts are eroding the quality of programs, and the distinctiveness of its schedule.[7]

1.22      It must be emphasised that the ABC is not a commercial network; its role is not to chase ratings, but to provide a balance between programs of wide appeal with programs of a specialised nature.

1.23      Of utmost concern remains the lack of consultation with stakeholders over the ABC's decision to outsource increasing amounts of production.

1.24      As Friends of the ABC Victoria aptly suggests in its submission:

The commercial emphasis now a feature of sections of the public broadcaster is contrary to the spirit, if not the terms, of the ABC Act and Charter. This trend threatens the essential character of the ABC – its independence and integrity. And it is happening without the authority of the national broadcaster’s owners, the people of Australia.[8]

1.25      As also discussed in the additional comments submitted by the Australian Greens, letters received by the Committee reflect a level of concern from the community about the future of the ABC and the decisions to outsource increasing amounts of production.

1.26      A form letter submitted to the Committee by 66 submitters aptly summarise these concerns:

I expect the ABC to be a producer of innovative quality programming in all areas. I want:

The ABC to be less dependent on outsourced programming;

The ABC to be funded and rebuilt so that it has strong specialist units to produce high levels of high quality and genuinely local in-house programming in all program genres on radio, TV and online;

A public broadcaster that is focused on diversity and quality, not ratings.[9]

Conflict of interest

1.27      Concerns were raised with the Committee as to the way the ABC dealt with any potential conflicts of interests when it came to the commissioning of new programs.

1.28      While the ABC has suggested "the whole of the organisation [has] quite strict guidelines and protocols around conflict of interest"[10], there may be a case to have a greater level of transparency and disclosure requirements to deal with such concerns.

Australian Greens

1.29      I support the general thrust of the additional comments of the Australian Greens.

Recommendation 1

1.30      The August 2, 2011 announcement of forced redundancies to be reversed and the level of ABC internal program production be restored and maintained at least at 2010 levels on an ongoing basis.

Recommendation 2

1.31      The ABC engage an independent external provider to conduct a performance and financial audit of the Television division's production commissioning model and to recommend ways to improve the transparency of the ABC's commissioning decisions, including reference to the recent SAFC FACTory initiative and ScreenWest outsourcing arrangements.

Recommendation 3

1.32      The committee recommends the Minister for Communications stipulates that as part of the ABC's next triennial funding allocation, the ABC quarantine funding for the National Interest Initiative (NII) and the Regional and Local Program Initiative (RLP) to promote ongoing internal program production in the BAPH states.

 

Senator Nick Xenophon

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