Senator ALSTON (Minister for Communications, Information Technology and the Arts) (11:38 AM) —There are a number of furphies in this debate. The first is that somehow some years ago we singled the ABC out for some special treatment when we had to try to make changes to repair the $10 billion budget black hole that we had inherited from the Labor Party. But we did that virtually across the board in the public sector. So the ABC certainly was not singled out. We gave very extensive notice. We waited until the end of the existing triennial funding agreement and we foreshadowed that in the next agreement there would be a $55 million reduction in funding for the ABC.

The ABC has since on a number of occasions made it plain that `One ABC' has been a great management restructuring success. One ABC effectively meant that, instead of having separate management streams for radio and television, you combined the two; you adopted modern management practices; you introduced a flatter management structure. As a result, they say that they have achieved a $28 million saving. In other words, more than half of that amount of $55 million has been met by management restructuring which the ABC itself says has been a very significant achievement in terms of greater productivity and performance. There is absolutely nothing that current discussions have to do with somehow redressing that funding imbalance.

The fact is that the ABC has been able to develop its online site—with our support from the very outset—very effectively. For Senator Bourne's information, it is rating about No. 5 in the list of the most popular web sites. It has about three million hits a week. It is clearly an ongoing source of great interest. The real challenge is whether the ABC, particularly news and current affairs, remains relevant in the digital environment. That is the challenge. Do you want to consign the ABC to a backwater; do you want to just have it adhere to its traditional practices; or do you really want it to get a slice of the action?

Senator Lundy —You cut their funding.

Senator ALSTON —I am just making the point that ABC Online has emerged as a very successful venture.

Senator Lundy —You never funded it. It is no thanks to you.

Senator ALSTON —They have done it—that is the point—with the existing level of funding. Back in the 1980s when you were keeping the lid on them, David Hill was off there and coming up with a whole set of new ventures. They have always been able to find new opportunities, and I commend them for it. This has been one of the most successful.

Another great furphy, which I presume is being peddled out of ignorance rather than malice, is that there are some board members who want to sell off online services. I am not aware of any such suggestion. I am aware that one board member proposed selling off a minority stake in ABC Online. That is exactly what Telstra was talking about doing last week; it is exactly what PBL have done with ecorp; it is exactly what Murdoch is talking about doing with a minority spin-off of his satellite services. In other words, this is conventional corporate structuring in the online environment. But the ABC seems to be utterly oblivious to that. You tell us that, because we have 50.1 per cent of Telstra, we have absolute control, we can run the show and we ought to tell Telstra what to do, et cetera. But, somehow, if the ABC were in absolute majority control of the online web site, you would argue that that is a compromise or that they lose control. The logic escapes me.

I am very interested to hear that Senator Bishop now says the opposition is not seeking a full and wide-ranging inquiry into the act or charter. That is a breathtaking climb down from where Mr Smith has been in recent times. This is what Mr Smith wanted on 14 February—that is just this last Monday:

He also said only yesterday that he wanted an `inquiry into anything that the national broadcaster does or proposes to do'. Talk about death by a thousand cuts. He wanted to veto this original Telstra-ABC deal. He said, `It was red hot. Frankly, they ought to stop it.' I do not know why he kept using the word `frankly'. I presume it is because normally he is not frank and this was to be the great exception. But there he was saying that this ought to be vetoed and then he wants to have a rolling series of reviews. So I suppose over the next nine months any deal that the ABC comes up with has to be gone over with a fine toothcomb by people in the Senate who think that there is a bit of grandstanding mileage to be made.

This is an environment in which people have to be very fast and very flexible. If you have been to Silicon Valley, as Senator Lundy has, you will know that deals are done in 24 hours. Deals are done on the run. But for the ABC it is different because they have statutory obligations; they have a charter that guarantees independence; and they have someone who has consistently over many years been a fierce proponent of that, Mr Johns, now giving assurances that they will at all times adhere to those obligations. No-one has suggested they will not. All that has happened is that the Labor Party wants to ignore the fact that written into that agreement is a very clear clause that says that Telstra acknowledges the independence and integrity of the ABC. Of course, that is only right and proper. In fact, it is required by law.

So there is all of this nonsense about `We want to be sure that you don't compromise independent news gathering processes.' How are they compromised? I do not understand this. Mr Smith did not even seem to understand the difference between coproductions and normal activities, as though coproductions were somehow something new and horrible and should never be contemplated. We had an inquiry some years ago in which I was involved which looked at coproductions and the ABC and whether there were some excesses in current arrangements. But, as we know, SeaChange and Frontline and a whole series of ABC success stories have been coproductions. McFeast was a coproduction. So coproductions ought not be anything new to be worried about. But somehow the ALP seems to think this is yet another example of commercialisation that is unacceptable.

The ABC does get involved in a number of commercial activities. The bookshops are all about commercialisation. All of the promotions that are given on the ABC about buying products from the ABC are commercial examples. The critical issue is whether or not the ABC will be compromised in its news gathering activities, whether it will be leant on to give a different priority to news stories. It is not. Dr Julianne Schultz has made this very clear. To the extent that there is a capacity for Telstra to offer advice and be properly listened to in terms of mix and variety, it is in relation to genres; it is not in relation to news and current affairs. There is no way that the ABC for a moment would allow any tampering or modifying of its news selection processes—and, of course, as it is a party to any ultimate contract arrangement, it will have the capacity to enforce that contract to require that there be no interference with any presentation of news and current affairs.

So, again, this is a complete furphy. What this is about is non-news and non-current affairs. In other words, you have a choice of genres. The ABC thinks comedy is terrific, so it serves that up. The punters do not like it when visiting the Telstra super site, they turn off in droves and Telstra says, `Well, hang on, surely you can do a bit better than that. Why don't you come up with a different comedy format; why don't you come up with something in a different space altogether?' It might be educational programs, it might be environment or Discovery documentaries. That is a perfectly sensible response to commercial realities. But, as far as news and current affairs are concerned, that is entirely different.

Again, we are talking here about organisations, like Telstra and other portals, offering people a range of choices. So you go to the home page, you want news and you see that you have a selection on a menu. You can have NBC, American ABC, CNN, Channel 9 Australia or ABC Online news. That is a matter of choice. No-one is forcing you to go there. It is not as though you are deliberately turning on Channel 2 and sitting there and saying, `Isn't this terrific? No ads. That's my choice, I'm watching it.' Here you have a choice, a smorgasbord of choices. How does it compromise the ABC if people want to go and visit the ABC web site? In other words, if they go from the link on the Telstra home page through to ABC news, which is completely unamended, they get the ABC's presentation—their suite of offerings in news and current affairs. That is what they want, and that is what they get. Telstra understands—and is prepared to pay something in the order of $65 million over a five-year period—that the ABC has a unique brand that relies on independence, integrity and lack of advertising. That is the very sort of reason why people might want to go to that web site.

But is anyone seriously suggesting that, because you go to a portal and it has a banner ad at the top or a strip of ads on the side, somehow that is compromising the integrity of the ABC, that that would make people say, `Oh, I don't want to drill down to the ABC news site because I saw a horrible, filthy, disgusting advertisement for Kids-R-Us on the side of that web site'? It is a preposterous suggestion. It is simply pandering to the lowest common denominator argument out there that somehow, if the ABC has anything to do with commercial activities, it will be compromised. Of course it will not be. The choice is whether the ABC will have the opportunity to compete with other news gathering enterprises or whether it will be consigned to oblivion, whether it is going to have to rely on people going directly to its web site. As we know, portals are gathering speed and momentum all the time. Yahoo and AOL are two of the best examples. Why do you think the ABC has signed up with them? Why do you think they have had these commercial agreements over the last 12 to 18 months? Because they want a slice of the action. They want to see the ABC news presentation available to as many people as possible on traditional terms; in other words, with no ads inside that site.

So you can grandstand as much as you like, but it is quite clear that the ALP is simply involved in a massive trawling exercise which is designed to paralyse the ABC, to marginalise it and to consign it to irrelevance. The best example of this and why, no doubt, I was not able to ask the question in its entirety—but I am sure that Senator Bishop will deal with it adequately in his reply—is that Mr Smith was out there for days saying that he wanted this to go to the IT select committee. That is a place where I can well understand he would want to send it because it is all about the digital environment, new technologies, new media enterprises and the like. But no, what happened is that, having said that repeatedly, he discovered that that was not the committee with the numbers that he wanted. So, all of a sudden, this goes to a references committee where the government does not have the numbers. So it simply exposes the nakedness of this whole exercise. This is entirely political grandstanding; it has nothing to do with concern about these two activities.

Mr Smith talks about reviewing the charter, reviewing the act—reviewing everything that moves with the name ABC attached to it. Mansfield came out and recommended that we amend the charter to give greater protection in terms of regional activities, news and current affairs and children's television. No, the ALP would not have a bar of it. It does not want any of that to be tampered with. Now, for no apparent reason, because the ALP has not been able to point to any deficiency in the act, it wants to have this massive trawling exercise. I must say that I thought it was really a world first when the ABC put out a release accusing the ALP opposition of intruding on ABC independence, making it clear that almost everything that had been said to date by the ALP was wrong:

Why did Mr Smith not want to mention it? Because it did not suit his purposes. He wanted to pretend that somehow this was almost a done deal when it is actually an early version draft of a memorandum of understanding which is likely to provide the basis for a future contract arrangement. In other words, it is miles away from a completed deal. No, he does not want to mention the subservience of Telstra to the ABC in terms of editorial control or, indeed, all of the statutory protections that are built in. He said that he found it ironic that the federal opposition and others, in the name of protecting the independence and integrity of the ABC, are intruding on that very independence by seeking a parliamentary inquiry—an inquiry, incidentally, which would follow last week's intensive examination of the proposed agreement by Senate estimates.

It was not just questioning of the ABC. The first hour and a half was spent questioning Telstra. That is what led Mr Smith to go out and do a quick door stop to express shock, horror and outrage. Mr Smith has attacked proposed coproductions of online material with Telstra. He ignores the fact that not only will the ABC have total control over the content but that content will also be available for the ABC to use as it sees fit on its own web site. Claims that coproduction contents will be exclusively available to Telstra are totally false. It is perplexing Mr Smith objects so strongly to the coproduction principle.

What I really thinks sticks in Mr Johns' craw is that there seems to be a blinding ignorance of not only existing arrangements but also the online opportunities that will simply bypass the ABC if it is not allowed to get on with it. It acknowledges up-front—and we would expect no less—that it has statutory and charter obligations. I have no reason at all to think that the board will not be entirely conscious of those matters and that it will adhere to them both in the spirit and letter.

So what is it that we are told is deficient in current legislation that requires amendment? The answer is: `We do not know. We would like to have a long, drawn out nine-month inquiry to see whether we can come up with something that we might be able to impose on the ABC.' All this nonsense about, `Oh well, we now just want a little inquiry, thank you very much. We are not seeking a full and wide-ranging inquiry into the act or charter,' is not so at all. If the ALP had their way, they would be having a never-ending trawling through any existing or proposed commercial arrangements for the production, supply or distribution of material online. In other words, they want to second guess, they want to express their view on sensitive commercial negotiations and binding agreements. They want to be able to get out there and say, `No, that is not how the board ought to do it. We will run it our way.'

The ALP is the only party in history that I can recall that went to an election—as they did last time—promising to give directions to the board about how they should spend money. They were going to give it on conditions. Here they are again. They are not respecting the independence of the board of directors. If they cannot stack it, as they did years ago, they want to be able to tell it what to do. If they cannot expressly do that from opposition, they want to paralyse it by having an ongoing, rolling series of committee assessments of anything commercial that the ABC might think of doing, when the rest of the world knows that most of these things involve a quick decision. If the ABC does not want to be part of a super site, plenty of others do—thanks very much, done deal, let's move on. That is the way this world operates.

That is what the ABC quite rightly wants to get into. It understands the opportunities in new media. It has been very successful to date with its own web site. It has not been hampered in any shape or form by a lack of government funding. Yet now it is being told that it has to await the pleasure of a stacked Senate committee that is going to tell it what to do on a regular basis. It is going to reserve its right to disagree with everything that the board might do, everything that people negotiating might do.

What an absolute nightmare for anyone who is trying to act commercially to be told, `You are subject to scrutiny at every stage of the process.' You cannot possibly enter into commercial agreements. People will run a mile. They will just say, `We cannot be bothered. We will sign up with CNN and a range of other news providers. We will leave the ABC out of it.' Is that what you really want to happen? Because that is exactly what will happen if this committee proceeds down the path that is proposed.

If it comes to a choice between Senator Bourne's amendment in relation to (c) and the ALP's, I will support the Democrats'. Beyond that, we will oppose the entire proposition because it is totally unnecessary. It is putting the ABC in handcuffs. That may suit your political purposes. It does not suit the ABC. It is not something we support. I think the sooner you stop playing politics the better.