Chapter 2

Background

2.1        The Australian Broadcasting Corporation (ABC) is Australia's primary public broadcaster, providing content via radio, television and online. It is established as a statutory corporation under the Australian Broadcasting Corporation Act 1983 (the ABC Act). The ABC Act, which includes the ABC Charter, sets out the basic functions and duties of the Corporation.

2.2        The ABC Board of Directors is responsible for the ABC's operations. Up to seven directors are appointed by the Governor-General on the recommendation of the Commonwealth government. A managing director is appointed by the board.

2.3        As at June 2012, the ABC employed over 4600 full-time equivalent staff.[1] The ABC operates from 60 locations around Australia and 12 overseas bureaux.[2]

2.4        In 2011–12 ABC Radio broadcast 8784 hours of content and ABC1[3] broadcast 930 hours of first-release Australian television content during prime time.[4] The ABC's digital television services were available to 97.97 per cent of Australia's population from 354 transmitter locations.[5]

Origins and growth of national broadcasting in Australia

2.5        Radiotelephony was first demonstrated in Australia in 1919.[6] For approximately the first two years of broadcasting, experimental activities were conducted by amateurs. In 1923, following interest from commercial and professional interests to broadcast services, the Postmaster-General convened a conference of specialists to make proposals for the regulation of the industry.[7]

2.6        Australia's first broadcasting regulations were issued on 1 August 1923 and comprised the Commonwealth government's first formal involvement in broadcasting.[8] The need for government regulation of the use of electromagnetic wave spectrum was already acknowledged internationally due to the physical scarcity of the airwaves and to prevent users from interfering with each other's signals.[9]

Dual regulation system

2.7        The regulations created a dual system of broadcasting with A-class and B-class stations. A-class stations received government funding and were able to take limited advertising.[10] Licence numbers were limited to two in New South Wales (NSW) and Victoria and one in each of the other states. A-class stations also had to establish additional stations (including relay or rebroadcasting stations) at their own cost in locations where the Postmaster-General determined the existence of public demand. B-class stations received no government funding but instead were funded by advertising.[11]

2.8        Each licensed broadcaster was offered a particular frequency on the spectrum and allowed to collect a licence fee from anybody who chose to listen to the stations.[12] Radio receivers were "sealed" so that owners could pick up only the station or stations for which they had paid to hear.[13]

2.9        According to a 1981 review of the Australian Broadcasting Commission (the Dix Review),[14] the dual regulations 'heralded the beginnings of the Commonwealth government's concern to see broadcasting in Australia achieve particular policy objectives'.[15] For example, the Dix Review observed that:

The provisions relating to transmitter power and setting up relays reflected a desire to extend the facility of broadcasting to places outside the capital cities, especially to distant country listeners.[16]

2.10      The Dix Review also noted that at the time there were rising expectations about the role broadcasting could play in relieving some of the longstanding disadvantages country people suffered by comparison with their city counterparts.[17] According to the Dix Review:

The contemporary marvel of radio was expected to bring social and economic benefits to the huge and sparsely populated areas of Australia, curtail the trend towards migration of country populations to the cities, and act as an incentive for newly arrived overseas migrants to join the rural workforce rather than gravitate to the cities.[18]

The Australian Broadcasting Company

2.11      In 1920, deficiencies in the dual regulation system precipitated the Commonwealth government appointing a Royal Commission on broadcasting. Complaints had been made that the current system concentrated broadcasting resources in the cities and in Victoria and NSW, rather than states with fewer people.[19]

2.12      To address this issue, the Royal Commission recommended that licence fees be cross-subsidised with equal minimum payments of license fee revenues to each A-class station.[20] However owners of city stations in NSW and Victoria were reluctant to amalgamate and spread their resources, whilst those stations outside these states were critical of having to take programmes from the big cities on relay rather than being given a larger portion of revenue from licence fees to spend as they judged best.[21]

2.13      In July 1928 the Commonwealth government adopted a new approach to broadcasting regulation—and one that was explicitly rejected by the Royal Commission—and nationalised A-class stations.[22] As the five-year licences granted to A-class stations expired between 1929–30, licenses were then offered by tender for three years to a single nationwide company which would be responsible for providing all programming content, while the Postmaster-General's department would provide all technical services.[23] The regulation of B-class stations remained unchanged.

2.14      The successful bidder to run the new National Broadcasting Service stations (as the A-class stations were henceforth known) until June 1932 was the Australian Broadcasting Company, a consortium of theatrical, cinema and music interests formed specifically for that purpose.[24]

Australian Broadcasting Commission Act 1932

2.15      At the expiration of the contract to provide programming to the national broadcasting service stations, the Commonwealth government decided against tendering for the management and programming of the stations and opted to establish a public corporation to operate the national broadcast service—similar to the British Broadcasting Corporation (BBC).[25]

2.16      In May 1932, the Commonwealth government passed the Australian Broadcasting Commission Act 1932. The Act created the Australian Broadcasting Commission (the Commission) which commenced broadcasting to radio stations in all capital cities and to relay stations in some states on 1 July 1932.[26] The Commission was charged with broadcasting 'adequate and comprehensive programmes' and taking in 'the interests of the community all such measures as, in the opinion of the Commission are conducive to the full development of suitable broadcasting programmes'.[27]

2.17      The Commission consisted of five commissioners appointed by the Governor-General, was financed by a portion of licence fees paid by receivers and was not allowed to broadcast advertisements.[28] Technical services continued to be provided by the Postmaster-General's department.

Landmarks in legislation after 1932

2.18      The functions of the Australian Broadcasting Commission remained relatively unchanged between 1932 and 1942.[29] In 1942 legislative changes were enacted to provide the Commonwealth Parliament with more oversight of the Commission and a minimum quota for Australian content in broadcast programmes was introduced.[30] In 1946 the Commission was required to establish its own independent news service.[31] In 1948 legislative changes severed the link between the Commission's revenue and the licence fee of radio listeners.[32] Funding was directly drawn from the Commonwealth consolidated revenue.

The introduction of television

2.19      In 1953 the Menzies government appointed a Royal Commission to investigate the feasibility of establishing a national television service.[33] The Royal Commission recognised that the expense of erecting television infrastructure would mean that 'the benefits of television will be enjoyed chiefly by viewers resident in, or adjacent to, the capital cities and other large centres of population'. This conclusion, according to the Royal Commission, 'is as inescapable as it is socially unfortunate'.[34] The Royal Commission therefore recommended that:

...despite the practical difficulties to be overcome, we regard the early extension of television services to country areas as a matter of prime importance. We consider it fundamental that when the Australian Broadcasting Control Board formulates a plan for the allocation of frequency channels, adequate reservations should be made to ensure the widest possible coverage to country areas when financial and other considerations make this possible.[35]

2.20      Following the recommendations of the Royal Commission, on 5 November 1956 the Australian Broadcast Commission transmitted its first television service. The first services were in Sydney and Melbourne, with state capital cities and large urban areas following later. Legislation was passed giving the Australian Broadcast Commission the same powers in relation to television as it did with radio.[36]

Australian Broadcasting Corporation Act 1983

2.21      In 1979, the Commonwealth government announced an independent review of the ABC, headed by businessman Alex Dix, which would review ABC programs and policies.[37] The Dix Review made 273 wide-ranging recommendations on the future objectives, powers and policies of the national broadcaster.[38] The recommendations included implementation of a second regional radio network and the replacement of the Commission with a board of directors. The Dix Review further called for additional regional identification in television programming and the decentralisation of editorial responsibility to state television managers.[39]

2.22      In expressing a future vision for the national broadcaster, the Dix Review stated:

We recommend that the ABC should provide a national service for all Australians, balancing as best it can the need to provide quality mass appeal programming with the demand for a wide range of special or minority interest broadcasts...It should continue to develop an emphasis on its news and information service. It should continue to develop a concern for appropriate services to people in country localities and isolated areas where choice of programs is severely restricted. It should be sensitive to the need for innovation and enrichment of Australia's cultural life, through the reflection of minority cultural interests as well as general artistic achievement.[40]

2.23      Many of the recommendations from the Dix Review were incorporated into new legislation: the Australian Broadcasting Corporation Act 1983 (the ABC Act). The ABC Act established the national broadcaster as a corporation, created a board of directors (instead of commissioners), established the position of managing director and required that the Corporation report annually to Parliament. The ABC Act further specified the 'Duties of the Board' and established a 'Charter of the Corporation'.[41]

The ABC Charter

2.24      The Charter of the Corporation (the Charter) is set out in section 6 of the Australian Broadcasting Corporation Act 1983. The Charter has not been substantively amended since the enactment of the legislation.[42]

2.25       The Charter establishes that the functions of the Corporation are:

• to provide within Australia innovative and comprehensive broadcasting services of a high standard;
• to transmit to countries outside Australia programs of news, current affairs and entertainment; and
• to encourage and promote the musical, dramatic and other performing arts in Australia.[43]

2.26      The key charter function relevant to this inquiry is that requiring the ABC to broadcast programs 'that contribute to a sense of national identity and inform and entertain, and reflect the cultural diversity of, the Australian community'.[44]

2.27      The full ABC Charter is reproduced at Appendix 3.

Committee comment

2.28      As the national broadcaster, the ABC fulfils an important role in providing news, information and entertainment to Australians. From its early beginnings, national broadcasting has been used as a method of bridging the divide between regional and metropolitan audiences. Programming offered to city audiences could equally be provided to audiences located outside of the capital cities. Likewise, the growth and development of the national broadcaster has allowed for regional communities to be represented and reflected back to the nation.

2.29      Since the creation of the Australian Broadcasting Commission in 1932, the aims and operations of the national broadcaster have been reviewed and revised. In particular, following the implementation of the Australian Broadcasting Act 1983, there has been a considered effort to ensure that the ABC is capable of reflecting and representing Australian identity. This is best shown in the adoption of the ABC Charter which requires the ABC to 'reflect the cultural diversity of the Australian community'.[45]

2.30      The committee acknowledges that the ABC is a beloved institution to many Australians and that it has provided a valuable service to regional and metropolitan audiences.

Reviews of the ABC and its operations

2.31      Over the past three decades there have been a number of reviews into the operation of the ABC. Some of these are briefly summarised in the following sections.

The Palmer Inquiry

2.32      In 1994, the Palmer Inquiry was initiated by the ABC Board as a result of allegations of outside influence on ABC program content. The ABC Board concluded that four programs were found to have been influenced by outside financial contributions. Actions to rectify policies and procedures were taken by the ABC in light of the findings and co-produced programs of the kind investigated were abandoned due to the risk to 'program independence'.[46]

Senate Select Committee on ABC Management and Operations

2.33      As a result of the Palmer Inquiry, the Senate Select Committee on ABC Management and Operations was established in 1994 with broad ranging terms of reference. Amongst other issues, the Select Committee considered the operational goals and direction of the ABC, budget funding, the ABC's increased dependence on external funding and the subsequent impact on editorial independence. The select committee's report, Our ABC, made 23 recommendations including making amendments to editorial guidelines, commissioning regular audits of the impact of external funding on program selection and, significantly, that 'the Board should reverse the current trend towards the concentration of ABC activities in Sydney'.[47]

The Mansfield Review

2.34      In 1996, the Commonwealth government commissioned Mr Bob Mansfield to conduct an independent review of the ABC. The Mansfield Review examined the future role and functions of the ABC in light of the Howard government's policy of creating a more focused role for the ABC. The Mansfield Review focused on funding and the ABC's independence. It recommended that the principal function of the ABC should be defined as broadcasting for general reception within Australia.[48] The review also recommended that arrangements for triennial funding should be resumed; that the Corporation should not be allowed to take advertisements or sponsorship; and that the ABC should outsource the majority of non-news and current affairs television production.[49]

Convergence Review

2.35      In 2008 the Commonwealth government released a discussion paper, ABC and SBS: Towards a digital future, which formed the basis of a public consultation and review of the two national broadcasters.[50] In 2009 the government released its response to the discussion paper titled Strengthening our national broadcasters.[51] In the discussion paper the government outlined its commitment to provide additional funding to the ABC and SBS to expand their range of programming and introduce a dedicated children's channel.[52]

2.36      In 2010, the Commonwealth government appointed the independent Convergence Review to consider broad issues surrounding the role of broadcasters in the contemporary media. The Convergence Review report was presented in March 2012 and made several wide-ranging recommendations.[53] Of relevance to the broadcasting industry, the Convergence Review recommended that the ABC Charter should be updated to reflect the range of services it provides (including online activities) and that Australian content quota obligations should apply to the ABC.[54]

2.37      The government has announced it will draft legislation to implement changes recommended by the Convergence Review by March 2013.[55]

Environment and Communications References Committee

2.38      In 2011, this committee examined recent programming decisions made by the ABC.  The committee examined decisions by the ABC to significantly cut the number and amount of internally-produced ABC programs.[56] The committee recommended, amongst other things, that the ABC ensure that it maintains an effective capacity to produce quality programming across the regions in addition to news, sport and current affairs.[57]

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