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Environment and Communications Legislation Committee - 19/11/2013 - Estimates - COMMUNICATIONS PORTFOLIO - Australian Broadcasting Corporation

Australian Broadcasting Corporation

CHAIR: Thank you, ladies and gentleman. The environment and communications committee will resume estimates. I now call officers from the Australian Broadcasting Corporation.

Mr Scott, thank you for your presence. I realise you did have another booking, and we did give you the alternative to make your own decision, but thank you for being here. Would you like to make an opening statement?

Mr Scott : No. I am happy to just receive questions from the members.

CHAIR: We will go to Senator Ruston for questions.

Senator RUSTON: Welcome, gentleman. Can I first of all touch on an issue in relation to a The Chaser sketch in which Chris Kenny was involved. Could you advise how much money is being spent by the ABC in relation to defending their right in relation to this matter?

Mr Scott : I know the matter you refer to. We did receive correspondence from Mr Kenny's lawyers. As far as I understand this matter has been dealt with by the ABC's in-house legal team. I do not believe—I might stand corrected—we have consulted external counsel on it. This is a matter that our in-house lawyers have handled to this point and it has been a simple matter of correspondence back and forth.

Senator RUSTON: Sure. Is there any possibility of the legal advice that was provided to you being made available to the committee in some way?

Mr Scott : No, Senator, I do not think we would be in a position to do that. I do not have a copy of the legal advice in front of me and, in fact, I do feel a bit inhibited in discussing the matter because it is currently a matter that is with our lawyers, having been brought there by lawyers engaged by Mr Kenny. I would say, as I have said publicly in the past, I appreciate that this was a controversial matter and, as I said previously, I am not going to defend it in terms of good taste. I can understand why people thought it was pretty offensive—sometimes comedy and satire is. There is a broad licence that we give, and the Australian media gives, I think, to cartoonists and satirists—but that does not mean that it is not hurtful and offensive on occasion.

Senator RUSTON: Do you believe, in the context of what you have just said, that perhaps a line was crossed in this instance?

Mr Scott : It is a matter of judgement. As it was reviewed internally, I think it is fair to say that our editorial policies as they have been developed and interpreted over the years provide a broad licence in terms of satire, just as a broad licence is applied to cartoonists in newspapers. There was satire at the basis of this matter and it is a licence that is provided. People will come to different judgements on that and it is a matter that we have looked at internally. I understand it has gone to the ACMA; they will provide a view on it. Finally, it will need to be a matter for the ABC board as to whether, in fact, they feel the editorial policies which are drawn to guide our editorial operations are appropriately drawn. I appreciate that there will be divergent views on the matter, but the test is not simply whether I found it tasteful or tasteless, or even whether it is hurtful. Cartoonists can be hurtful in their depictions of people in newspapers. That is not the test that we use.

Senator RUSTON: Okay. So I suppose the next question would be when the matter goes to your board I would be very interested to see whether your board actually believes—

Mr Scott : Our editorial policies—the guidance that is provided to our program makers—are publicly available on our website and if we change those policies, they are changed by the board and that will be publicly noticed and available.

Senator RUSTON: Just quickly, have you or has anybody else at the ABC been in contact with Mr Kenny to apologise for this issue?

Mr Scott : He has put the matter in the hands of his lawyers. We have engaged with him at that level. Again, to draw a parallel with a newspaper cartoon: sometimes cartoons will be drawn and sometimes people will be hurt by those. I am not sure newspaper editors are there apologising to public figures who are lampooned in cartoons. So—

Senator RUSTON: Okay.

Mr Scott : I have not been in touch with him personally, no, but the matter is in the hands of the lawyers.

Senator RUSTON: In reference to the reporting by the ABC of an alleged intelligence-gathering information story yesterday—I just wondered when the document containing this alleged intelligence-gathering information came into the possession of the ABC.

Mr Scott : Only a matter of days before broadcast. We investigated the matter. We were proactive in reporting that document. We saw the response. We redacted some elements of what was released. But we put that to air yesterday as soon as was practical after we saw that material.

Senator RUSTON: You obviously sought legal advice.

Mr Scott : Yes, we did.

Senator RUSTON: Internal or external?

Mr Scott : It followed the same legal process that nearly all our news programs follow. My understanding was that the legal advice took place internally.

Senator RUSTON: In a broader context, my understanding is that the document actually had 'top secret' written on it. Do you think it is a reasonable thing to publish a document that had that printed on the front of it?

Mr Scott : The test we apply is whether releasing material is in the public interest. There has been some discussion about this today of course. I would almost draw a distinction. At times some people talk about 'the national interest' rather than talking about 'the public interest'. There are a number of questions raised by this material. One is the nature and extent of intelligence activities undertaken by Australia. A second one is how those intelligence activities and the information gleaned is shared—and then how secure that information is.

This is very similar to debates which have emerged in the United States after the release of the NSA material. Leading American political figures, such as John Kerry, the Secretary of State, and former presidential candidate Senator John McCain have spoken about the revelations that came through this material. Senator Kerry said that the intelligence activities had reached too far and that some of that activity was on automatic pilot because the technology was there. So there are very significant debates which come off the back of this.

Yes, I appreciate that the release of some of this material might be embarrassing and that the release of some of this material may cause some difficulties in the Australia-Indonesia relationship in the short term. But, to draw a parallel with another story, the reporting that was done on the activities of the Australian Wheat Board certainly caused embarrassment and damage to Australia in the short term. But I think we would say that that reporting was absolutely in the public interest—and it was probably also in the national interest in the long term.

I think we are seeing a big international debate on intelligence activities in this digital age—what information can be procured, what information can be shared. I think the story yesterday essentially went to that and therefore I think it was an important story that should have been told—and that is why we told it, once we had checked it out, as soon as we could.

Senator RUSTON: To follow on from that, last night on The 7.30 Report,your host actually stated that the ABC and TheGuardian Australia had obtained documents from blah, blah, blah. The question is: how does the ABC and The Guardian Australia become jointly—

Mr Scott : That is a fair question. I am happy to say, and I think it has been revealed, that The Guardian Australia was in possession of this material and that they came to us. We have some reporting depth and expertise and we certainly have a broadcasting platform which allows us to take these stories very quickly to the nation. There are two things I would say. The Guardian Australia has worked, I understand, in concert with a number of leading media organisations around the world on these stories. Also the ABC works at times in partnership with other media organisations. We have worked in partnership with Fairfax and we have worked in partnership with News Corporation. On this occasion The Guardian Australia came to us and we worked in partnership with them—even though we did investigate the story independently and report the story independently.

Senator RUSTON: Did any money change hands in relation to this?

Mr Scott : No, certainly not.

Senator RUSTON: You are saying it is quite usual for the ABC—

Mr Scott : It is not atypical. As I have said, we have worked with Fairfax and News Corporation on stories. The Guardian came to us with this. We reviewed the material and released the story concurrently with them.

Senator RUSTON: Thank you. Can I just quickly move on to Q&A last night, broadcast from India. You do not need to answer these now; I am quite happy for you to take them on notice, but if you have the answers that would be great. How much did it cost us to broadcast Q&A from India last night?

Mr Scott : I do not have that figure. I can say, though, that we believed it was an important part of our international broadcasting strategy. We are working with DFAT on this. India is clearly a very important market. Part of what we want to do is raise visibility about these important neighbours in an Australian context. That is why we did Q&A from Jakarta. That is why we did it from India. That is why we are keen to do one from China. We were delighted last night that it was broadcast not just by the ABC in Australia and on Australia Network and Radio Australia around the region but by Doordarshan, the Indian public broadcaster, live into India, potentially a remarkable market for that program. So it was not an insignificant exercise. I am happy to give you the figure on notice, but it was a good investment in public diplomacy on behalf of Australia.

Senator RUSTON: That will be great. When you provide that information, maybe I could have how many ABC staff were over there—

Mr Scott : Yes.

Senator RUSTON: and perhaps an explanation as to whether you used any on-ground crew from India, because obviously India has pretty good film production—

Mr Scott : Yes, there was a bit of all of that.

Senator RUSTON: and why you did not use that crew. If you could provide the same sort of information about Jakarta, that would be fantastic.

Mr Scott : Yes, certainly.

Senator RUSTON: Can I just quickly move on to the content on your website. I refer to the tweet that stayed on there for quite a number of hours that referred to a sexual act in the same context as our Prime Minister. Could you advise us of what measures you have put in place subsequent to that to ensure that this sort of inappropriate material is not again seen on a taxpayer-funded website.

Mr Scott : Yes. Let me come back to you on that process. Let me say on that matter that the tweet you refer to came from a direct stream of tweets that used the hashtag related to the program. It was not edited. It was not moderated. It was not seen by any ABC employee before it ran through the website. As I understand it, it was only on the website for a brief period of time; it was part of a flow of tweets that came through. There was a live flow of tweets from Twitter. I will find out for you, on notice, what now happens with that site.

Senator RUSTON: That would be great. Finally, on the four-part interview series with the ex-Prime Minister Mr Keating, I am just wondering how many hours of footage were taken in the context of this series.

Senator XENOPHON: You want to see the out-takes, do you?

Senator RUSTON: I would love to, yes—all of them. He is an entertaining man.

Mr Scott : Out-takes will be in the DVD edition!

Senator RUSTON: No, just how much footage you get.

Mr Scott : Senator, thank you. We were delighted with the audience response last week; there was a very big audience for that. If you look at the histories that the ABC has documented over the last quarter-century or so, we did Labor in Power, but that was recorded in 1992; it went to air in 1993. We then did The Howard Years. We are cranking up another Labor in Power series, you might be surprised to know. The full term of the Keating prime ministership was never covered in any of these historical series that we have done, and Mr Keating has similarly never written a memoir or autobiography. So we thought there was an opportunity to make some compelling television that the audience would find engaging. I think people did find it engaging last week. There were many hours of taped conversation, of which the highlights go to air over coming weeks, including this evening.

Senator RUSTON: Is there any intention of doing a similar sort of program on Prime Minister Hawke or Prime Minister Howard?

Mr Scott : The thing I would say about Prime Minister Hawke and Prime Minister Howard is that they have both written very extensive and voluminous memoirs and have been the subject of biographies—certainly, in Mr Hawke's case, multiple-volume biographies. The other thing is that the first Labor in Power captures the entirety of Prime Minister Hawke's prime ministership and The Howard Years captures the entirety of Mr Howard's prime ministership. But we have a number of series that are underway. In addition to a new Labor in Power series, we are doing a series that documents the history and impact of the National Party in Australian politics; that is being researched now.

Senator Fifield: You have to draw the line somewhere, Mr Scott!

CHAIR: It'll be huge!

Mr Scott : If they have not called you, Senator, I am sure it is only a matter of time.

CHAIR: Would you require more funding for it, Mr Scott?

Mr Scott : If we run short I will come right back.

Senator Fifield: Billy Hughes had something to say on this subject.

Mr Scott : We do try to look for the gaps and the opportunities, and we are very pleased with the audience response to part 1.

Senator RUSTON: I will move back to the intelligence one. You said that you had possession of the material only for a few days

Mr Scott : We had access to the material.

Senator RUSTON: Do you know how long The Guardian had access to material? If you do not, could you find out?

Mr Scott : That question has been asked today. I have seen a report in the last hour or so where The Guardian is saying that they had possession of it only for a day or two and that the suggestion that somehow people had been sitting on this for months is untrue, that the material The Guardian has received through this well-known leak is massive in its volume and that the material in it is still being reviewed and uncovered over time. My understanding is that people at The Guardian Australia had access to this material only 24 hours before the ABC was alerted to it, and this was only a matter of days ago.

Senator XENOPHON: I want to ask about issues of local content. The ABC airs two current affairs programs each night, 7.30 and Lateline. You may want to take this on notice. What percentage of Lateline stories are from each state or territory on average, if you have statistics, over the last—

Mr Scott : I do not have those with me, but I can take that on notice.

Senator XENOPHON: Yes, you can take that on notice. Also, what percentage of 7.30 stories are from each state or territory on average, discounting the local Friday night episodes? How does this compare over the last three years and is it accurate to say that there has been a decline in stories from South Australia, Western Australia and the Northern Territory? Again, I am happy for you to answer those on notice. Does the ABC intend to keep both of these programs—that is, Lateline and 7.30—on ABC1 and operating autonomously?

Mr Scott : If I could go to the schedule first, Senator, the switch-off of analogue television means that there are new opportunities for us to review our schedule for ABC1, ABC2, ABC3 and News 24, because we have the working assumption that our audiences can get all those channels. We still see ABC1, though, as a broad, general-interest channel, and I think our expectation in prime time is that 7.30 and Lateline will both continue to be on ABC1. I would say that it is unusual. If you look at the BBC or other public broadcasters around the world it is pretty unusual to find another public broadcaster like us that allocates, effectively, two hours of prime time to news and current affairs every night of the week, as we do. But I think that is a good thing. Our audience responds to it. It is an important part—

Senator XENOPHON: You are talking about the news—

Mr Scott : You have the News, 7.30, Lateline and then Lateline Business. That is atypical. For example, it is a good deal more than the BBC runs on BBC1. We can see—you can even see it in last night's ratings—that our audiences increasingly are picking up some of this programming through News 24. Our plan is to continue to run those programs on the main channel. When you say 'operating autonomously', we still have separate EPs for those programs. There is no plan to change that. Some of the new reporting staff we have recruited, who are specialists in some areas, will operate across a number of our programs.

Senator XENOPHON: Michael Brissenden, for instance.

Mr Scott : Yes. You might see Michael on the 7 o'clock news or on 7.30 or he might pop up on Four Corners or Lateline, depending. That is just a good use of our resources. But separate EPs.

Senator XENOPHON: I do not need to take that any further. Will the ABC commit to retaining the local editions of 7.30 on ABC1?

Mr Scott : We have looked at that. That is still our plan. There are no plans to the contrary. They will be back next year.

Senator XENOPHON: Remaining under local control?

Mr Scott : Yes, absolutely. There are no fundamental plans to change the operation of the state based 7.30, as I understand it.

Senator XENOPHON: Further to that, the ABC received $2 million from the previous government to boost local content. That is correct, isn't it?

Mr Scott : A range of things, actually: specialist reporters, local content, rolling out technology that allows video-linking equipment in ranges of the country, and all of that is being rolled out now.

Senator XENOPHON: Again, on notice, how much of that has been spent, on what has it been spent and has it been directed by the ABC centrally out of Sydney or is there autonomy with respect to the states? Also, how much has South Australia received of that amount?

Mr Scott : We can give you details. The consultation internally around this has been very comprehensive. We have had our state based editors in and there have been discussions around priorities. There has been a terrific allocation of these resources around the country, and I am happy to give you more detail on notice.

Senator XENOPHON: Finally, and most importantly for many South Australians, does the ABC have a commitment to airing local football.

Mr Scott : That is a very good question. I have been following with interest the questions of local sport in South Australian newspapers. We are planning to continue broadcasting South Australian National Football League for 2014. We understand that the SANFL have been looking at other options and that other people have been looking to see if they can put deals together to make this work. But we are on standby to broadcast the SANFL in 2014 on ABC television.

Senator XENOPHON: But not beyond?

Mr Scott : We continue to look at these matters. I think it is a year by year proposition for us. It is a year by year proposition partly because we have seen with Queensland rugby league, and as has happened in Tasmania, that sometimes codes go in pursuit of other deals and other arrangements. They think they might be able to do better and find bigger audiences, and certainly get more money, by heading elsewhere. We all know that sport has become very commercial. Often it depends if you can get sponsorship rights and other things that it is not possible for us as a public broadcaster to do.

As you know, whilst there is a great passion for these sports—and we have had discussion in this room around the importance of these local sports—the audiences on our broadcasts continue to decline, and they partly decline because of the saturation coverage of the national competition that is now available around the country.

CHAIR: Thank you. Perhaps more broadcasts of the Sydney Swans would lift your rating!

Senator THORP: Before the election Mr Abbott promised that if elected the coalition would maintain the ABC's funding. In fact he was interviewed on election eve by Anton Enus on SBS News. The question was asked: 'What about public broadcasters, Mr Abbott. Another soft target. Are the ABC and SBS in the firing line?' To which the now Prime Minister responded: 'No cuts to education, no cuts to health, no change to pensions, no change to the GST, and no cuts to the ABC or SBS.' Given that, why are the ABC and the SBS part of the Commission of Audit review?

Senator Fifield: The government has no plans to reduce funding to the ABC or SBS. The reason the ABC and SBS are subject to the work of the Commission of Audit is that every Commonwealth department and agency is in the purview of the Commission of Audit. I do not think people should be excited or worried about the work of the Commission of Audit. The Commission of Audit is there to help, to advise, to give the government advice on best practice and to give advice to ensure that every taxpayer dollar is being spent to its greatest effect.

Senator PRATT: Does that mean you are going to interfere with an independent organisation?

Senator Fifield: Sorry, I do not follow the question.

Senator PRATT: If the Commission of Audit is designed to guide resources, if not cuts, the ABC independently decides how it wants to spend its resources.

Senator Fifield: Government is certainly not seeking to direct the ABC. The ABC has operational independence.

Senator PRATT: Why include them in the audit?

Senator Fifield: I do not think any Commonwealth government department, agency or body in receipt of taxpayer dollars should be afraid of independent advice. All government agencies should be open to advice as to what might be best practice in public administration. I think that is a pretty unremarkable sort of proposition.

Senator THORP: That is what I thought the public service was for, actually—to give independent advice to government. Given that there is a commitment that there will be no funding cuts and yet your response to my question referred to responsibility for every taxpayer dollar. So if there are no plans to cut the resources currently available to the ABC and SBS, and there is no plan, I hope, to interfere with the independence of both of those organisations, it seems to me it is a waste of taxpayers money to include them in the audit.

Senator Fifield: This may in some quarters be a contested proposition, but I think there is yet to be a Commonwealth department or agency that is yet to achieve operational or administrative perfection. Perhaps I am wrong. The purpose of the Commission of Audit is to provide advice about best practice. I would think that every Commonwealth department and agency should be open to receiving advice.

Senator PRATT: I am unclear what the point is if you maintain you are not cutting the budget to these agencies and they are independent?

Senator Fifield: You are presuming a very narrow purpose for the Commission of Audit, which I do not accept.

Senator THORP: But there seems to be only two points. One seems to be around making sure taxpayer dollars are expended efficiently—

Senator Fifield: Which you would think is a good idea.

Senator THORP: Yes, and I think that is one of the issues we as a community are grateful to the ABC and SBS for, in the sense that a certain level of trust is put in those organisations. They are funded and they have a very specific charter about what their responsibilities are. As someone who values the ABC and SBS very highly, it concerns me very much that they are being included in an audit when there is no clear purpose for that audit.

Senator Fifield: All areas of government activity, all government agencies and departments, are subject to the work of the Commission of Audit, and I think it is a good thing.

Senator THORP: In terms of the ABC, what information will the Commission of Audit be able to ask the ABC and SBS for?

Senator Fifield: I will leave it to Mr Scott to speak to any contact there may have been between the Commission of Audit and the ABC.

Mr Scott : There is some broad correspondence in circulation from the Commission of Audit. We are mainly dealing for this matter through the department, and providing them with information.

Senator THORP: What information have you been asked for?

Mr Scott : It is fairly general and high level basically at the moment, I understand.

Senator THORP: Is that information we can see?

Mr Scott : I can take that on notice. I do not have a copy of it here. But I do not think it goes much beyond what is in the annual report.

Senator THORP: So they are asking to see your annual report!

Mr Scott : I am not saying that. But my understanding is that it is not particularly detailed information that is being sought. The ABC is yet to make a determination as to whether in fact we will make a submission in the first round to the Commission of Audit. Do you need to add anything?

Mr Pendleton : No.

Senator THORP: You sound quite relaxed and comfortable.

Mr Scott : Let me put it this way. As you said, the Prime Minister said a number of times during the campaign that there were no plans to cut the ABC. In fact he said the ABC will flourish under the coalition. Because it is part of the responsibility of the board and the management team, we continue to look to ensure the ABC is managed efficiently and effectively. If you take a long-term view of it, the ABC has dramatically increased its output, with fewer staff and fewer dollars in real terms, over say a 20-year period. If you look at the kinds of additional content we have produced in recent years—with new television channels: ABC3, ABC News 24, a host of new drama content, iView, all the websites and all the apps—some of these things we were funded for and others were things we funded, like News 24 and iView, and our online activity. We funded them through finding efficiencies within the ABC and re-investing in content for audiences.

So, we are happy for there to be, in a sense, scrutiny of our operations, because we have always tried to manage them with an eye to efficiency and effectiveness. There are two measures I look at quite closely. One is that in any given week between 70 and 75 per cent of Australian watch, listen to or log on to ABC services. The other one that comes through the Newspoll, which is in our annual report, says that 85 per cent of Australians believe we provide a valuable or very valuable service. I imagine those members of the audience listening to the Prime Minister and hearing his commitments that the ABC will flourish under the coalition. Because of the working operations of the board, which has ensured that we have tried to save money to invest in content, and the fact that we have been that much more productive and provided so many more services to audiences in recent years, I am happy that our organisation stands up under scrutiny.

Senator THORP: I will explore that a little further if I may. Does one of those efficiencies include the cutting, for example, of local film units in places like Hobart?

Mr Scott : I have answered questions on notice about the film unit. It is a question that media organisations, broadcasters, around the world have had to deal with. There are a number of factors involved. You create these film archives and you want to then transfer the film archives, if you can, into a form that can make them be used in the digital context. Also, you want to preserve film. Some of these archives, if not appropriately preserved in the right kind of conditions and environment can deteriorate in a tragic way. So, under Mr Pendleton's operations, we have had a systematic program to try to bring together some of our archival content so that we can appropriately protect it and also so that we can digitise it, which makes it available to our staff all around the country.

Senator THORP: I was referring more to the personnel who used to work out of the Hobart film unit and are no longer—

Mr Scott : The local television production in Hobart?

Senator THORP: Yes.

Mr Scott : Sorry, there was another question about the film we were keeping in Hobart. Let me talk about local production. I think it is fair to say that if you look at what we have done in recent years—and I do not think we have had a chance to discuss this, Senator, even though I have had discussions with some of your colleagues on it—what we try to do in our television production model is have a mix of programming that we make in-house, programming that we do in partnership with the independent production sector and programming that we purchase and bring in. If you look back at the history of the ABC, the ABC used to do a lot of local production all around the country. That is not a terribly efficient way of making content.

Senator THORP: That gets to the point of my question.

Mr Scott : Let me tell you how we are dealing with this. That is not the most efficient way of making content. What we have said is that the focus of our internal production, apart from news, will be in Sydney, Melbourne and Adelaide. That is where we have active internal production units at the moment. But what we are saying to the independent production sector in Tasmania, Western Australia, Queensland and in the other states, is that we are happy to work in partnership with you. In fact, the director of ABC Television was in Tasmania last week holding briefings with the independent production sector. There are programs we are making with the independent production sector in Tasmania at the moment that will be a stimulus to the local production sector there.

But if in fact we were required to make extensive local production everywhere around the country, given the funding model that operates and our ability to access federal and state funding, and the producer rebate, and given the costs of internal production, where you are not fully operational everywhere, it means we would be doing less Australian production if we were committed to fully fledged local production everywhere. So it is trying to find the model that works.

Senator THORP: I can understand where you are coming from there. Am I right in saying that your charter obliges you, as far as possible, to make sure that there is local content and a regional spread of content.

Mr Scott : It does not quite say that.

Senator THORP: What does it say?

Mr Scott : I can get a copy of the charter here, but it certainly does not commit us to local production all around the country.

Senator THORP: I am not saying that; I said local content.

Mr Scott : Of course we want to create local content, but there are ways of creating local content. I suppose one of the things we are looking to do is to create content in partnership with the independent production sector all around the country.

Senator THORP: So what checks and balances have you got in place given that your in-house production is centralised now?

Mr Scott : It is in three locations.

Senator THORP: Yes, in the big capital cities.

Mr Scott : And South Australia.

Senator THORP: I am sure the South Australians would think that is pretty big. What checks and balances have you got in place to make sure that element of your charter is fulfilled, and how do you record whether or not the work that is being done—

Mr Scott : We do internal work around that. Our television division keeps significant detail of what work we are doing in different parts of the country, and we review that. For example, the television series The Doctor Blake Mysteries that we have done has been filmed in regional Victoria. I understand we have a children's drama program underway in Tasmania at the moment. There has been a lot that has happened in Western Australia. So we look to work in partnership, and this is material that our television division keeps and reports to me on.

Senator THORP: And is that kind of information publicly available?

Mr Scott : We can provide you with some more detail on notice if you would like.

Senator THORP: I think it would provide some comfort particularly to local Friends of the ABC groups, who, as you know, are very supportive.

Mr Scott : Yes. That is why I can tell you that the director of television is going to be visiting all states and territories to talk with the local independent production sector to try to find new opportunities to work with them. The first stop for that was in Tasmania, and we are keen to work with the Tasmanian independent production sector.

Senator THORP: Thank you for those answers. The questions come not from an inquisitorial point of view but from someone who represents people who are very strongly attached to the ABC and want to keep that local connection. My last question: am I correct in saying that in the budget the ABC was exempt from the requirement for an efficiency dividend?

Mr Scott : That is true. The ABC has not paid the efficiency dividend, because we get our funding allocated through a tri-funding agreement. This has been a long-established practice to provide visibility and security for the ABC over a number of years. If you think about our production commitments with our international bureaus, with the films we are making, with our television series and the like, we need that funding visibility and security over numbers of years.

Senator THORP: So no efficiency dividend required currently, and you do not anticipate one into the future.

Mr Scott : No. I understand the Prime Minister said there are no plans to cut the ABC, and implementation of an efficiency dividend would certainly be a cut to our funding.

Senator THORP: Thank you.

Senator FAWCETT: Q&A is a very popular program with the panel. I notice occasionally you have just one guest on the program. What are your criteria for selecting one guest?

Mr Scott : That is a good question. I think it is a judgement that is made by the production team. Q&A has been running a number of years. There have only been a handful of occasions where we have done that. Often it will just be a sense that you have a prominent figure well known to our audience and an opportunity to put a focus on them and to have them tested by the Q&A audience over time. We did this with Bill Gates. We have done it with political leaders. We did it with John Howard, though after he was Prime Minister. We did it with David Suzuki recently. Whenever we do it, some people prefer the traditional format. We got a very strong response to Q&A in India last night but, again, other people were saying, 'Why are we in India, and where are the Australian politicians?'

Senator FAWCETT: Sure. I guess the point of my question is: is there a set process or criteria, and I think the answer is no.

Mr Scott : The people who are exercising that judgement are the same people who are exercising the judgement on Q&A panels every week, and they will from time to time.

Senator FAWCETT: That is fine. Who came up with the idea for Q&A to host an audience with David Suzuki?

Mr Scott : That will be the Q&A production team, the same people who put together the panel every week.

Senator FAWCETT: Was he paid to appear on the program?

Mr Scott : I do not believe so. I will correct that if I am told otherwise, but I do not believe we pay any guests for Q&A. I am certainly not aware of it.

Senator FAWCETT: Do you pay for his flights, accommodation or any other expenses?

Mr Scott : I am not aware of any of that. I believe he was in the country. This is what Q&A often does with a good eye to taxpayer value. Often the international guests we get are already in the country, and we piggyback on expenses paid by others to get them on the program.

Senator FAWCETT: Sure. If you could just clarify with the committee on those two points.

Mr Scott : Sure. I will clarify that on notice for you.

Senator FAWCETT: Likewise, did you have any particular requests or demands that the ABC had to provide or comply with as part of his agreement to appear on the program?

Mr Scott : I am not aware of that, but I will answer it on notice for you.

Senator FAWCETT: Okay, that's it. Thank you.

Senator LUDLAM: Mr Scott, I am going to take you back to where you began in response to some remarks that you made on questioning from my colleague Senator Ruston. I was watching and listening fairly attentively from my office downstairs and appreciate the candour of your comments regarding the story that the ABC and The Guardian broke yesterday. I think it was extremely well put. I am interested in the process of redaction. I notice that, of the slides you published, six or so slides have been redacted. Have you done that in collaboration with The Guardian, or is that something separate?

Mr Scott : I think there were discussions with The Guardian, but there were also discussions with appropriate authorities. As would usually be the case with a story, we went to appropriate figures—I will not go into detail on that—saying that we were aware of these matters, that we had seen these documents and that this was the shape of the story that we might be running. There was some consultation around that. I think that, in light of representations that were made, a decision was made to withdraw some elements on those slides. I will not go into the detail of that information, but that was a decision that we came to. That is not an atypical process.

Senator LUDLAM: Were you at that point coordinating with the editors of The Guardian?

Mr Scott : I believe I was aware the story was coming together and finally briefed on its shape before it went to air, but I believe that, even though, when the ABC was aware of this material, the ABC reporting staff made its own calls, made its own inquiries and wrote and filmed our own stories independently from The Guardian, there were points where there was discussion with The Guardian, including around the time when the story would be published.

Senator LUDLAM: Presumably in what form the primary source material would be published.

Mr Scott : Yes. I think there was an agreement around what material would be redacted and the reasons for that.

Senator LUDLAM: Can we assume that some of those redactions are a direct response to your process of checking with various authorities?

Mr Scott : Yes you can.

Senator LUDLAM: Publishers including The Guardian, The New York Times and others in the United States rest on first-amendment protections when they put this material to air or online, but in the UK, you are no doubt aware, the offices of The Guardian have been not quite raided but have had the editor told, 'Time's up; you've had your fun' and The Guardian has been forced to drill out and destroy hard drives containing the source material and, effectively, told to stop publishing. To their credit, they have not. What is the legal situation here in Australia? On what constitutional protections, if any, do you rest when you put a story like this to air?

Mr Scott : I do not have precise detail in front of me. We had this story legalled. We did not believe there was any legal impediment to broadcasting this material, but I do not have that precise legal advice in front of me this afternoon.

Senator LUDLAM: Okay. Do you publish under some kind of implied freedom of publication or are you exposed in the same way as publishers in, for example, the UK?

Mr Scott : We clearly do not have the first amendment here. In our discussions with authorities yesterday there were no other issues raised with us that was an inhibitor on us publishing this material.

Senator LUDLAM: That is good. I know it would not normally be the practice.

Mr Scott : And our act does require us to comply with the law. This is one of the reasons why we seek legal advice prior to publication.

Senator LUDLAM: I guess I am more concerned that the law is silent rather than containing any explicit prohibition for you to do what you have done. The law in the Australian Constitution is silent.

Mr Scott : That is true. There is no prevailing first-amendment protection.

Senator LUDLAM: Publish and be damned—and good on you for doing so. Changing the subject briefly: there have been some reports in a newspaper about potential product placement in ABC programming. Does that go on? Is there an explicit policy?

Mr Scott : No, there is no product placement in ABC content. I have seen some of those articles and been a little bit confused by them. I have some material here on that. The ABC's editorial policies prohibit the use of product placement. Product placement would pose a threat to our independence and integrity.

Senator LUDLAM: Indeed.

Mr Scott : But that is not to say, though, that products will not appear in a drama program and the like. But we are not being paid for them.

Senator LUDLAM: That is good. It is good that your policy is that clear. Have you had complaints or are you just aware of the media stories?

Mr Scott : We are just aware of a series of stories. Someone has watched some of our programs with a stopwatch and said that a certain car brand has appeared a lot, but that is the car brand that the characters in the drama were driving. Anyway, our editorial policy's section 11 makes clear the guidelines that operate. It is also covered in section 12 and section 13 of the editorial policy. Our television division adheres to those requirements. There is no product placement in ABC commissioned content, and our independent producers are aware of those requirements.

Senator LUDLAM: That was where I was heading next. How do you police that upstream to work that you commission?

Mr Scott : Those people who work in partnership with us understand that they need to deliver in terms of the editorial policy. When we contract with them to make a drama or a documentary, they know that part of the contractual requirements is that they are in compliance with the editorial policies. They indicate that we have final editorial control over that product. We provide training sessions for production teams that include issues like commercial references and our product placement prohibition. We have a website that provides further support and information. So I do not think it is the case that we have a clear policy but independent producers who work with us make up their own rules. They have to deliver under the editorial policies that would operate if we were doing this internally, and we do our best to inform them and educate them around those policies. And we can review their adherence to those matters.

Senator LUDLAM: All right; that is pretty clear. Lastly for me, on your online platform: what is your policy on iview about how long and how many of your programs will be resident on your website?

Mr Scott : It is a good question. iview is continuing to experience tremendous growth for us, and we look to expand that service in response to audience demand. The issue of the availability of a program on iview comes to rights negotiations.

Senator LUDLAM: Can we confine it for the moment just to stuff you hold the rights to? I am interested in particular in your current affairs work.

Mr Scott : That is a good question. Everything we put on iview we hold the rights to, but I will draw another comparison. For a program like Doctor Who or Broadchurch that we acquire or even a program that we make like Time of Our Lives we will make a payment that allows us to broadcast it a certain number of times on free-to-air television and then a window, linked usually to that free-to-air television broadcast, that we can broadcast on iview for. That is usually a 14-day window. You can look at different catch-up services around the world. The BBC has been at seven days and in some aspects they go to 30 days, but we are at 14 days. That is basically what we buy from our production partners and the like. So that has generally been the way that we have dealt with iview across the board: you educate your audience that it is a 14-day window. If you look at the iview traffic, it almost has a half-life. You get a slight pick-up on days 12, 13 and 14 because people are aware it is going to go. So that is the way we have set it up.

There is an argument we are now investigating around our archive. I would like more archival material available on iview, but that would probably be archival material that people need to pay for like they pay for it now. If you wanted to go watch a series of Sea Change, the only way you could do that is go to our shop and buy a DVD. We think you should be able to download that the way you could go on iTunes and download archival programming.

Senator LUDLAM: What about an asset like Four Corners?

Mr Scott : A lot of that material you can still find. I think we are still thinking through how we deal with our long-archive Four Corners; but, beyond the 14 days, you can find a lot of that material on the Four Corners website that you can play full length and often with additional material linked back to that program. But the way we set up iview, if I understand the thrust of your question, is to indicate that this is a 14-day catch-up window by and large, and that is the way it is operated. How you deal with the long archive of Four Corners—50 years of archive—we are still thinking through. There is a question about how much should appear on iview and how much should appear on the website. Then there is the whole cost of delivering this. There was some additional money that was provided for CDN costs in the last budget, but I think it was Mr Ebeid from SBS who earlier said, 'One of the miracles of broadcast technology is that, if one person watches or a million people watch, it is the same cost.' One of the challenges of digital delivery is that every additional person who is drawing material down from the system triggers a cost back to the broadcaster providing it. So how we manage the demand of iview is a significant question for us.

Senator LUDLAM: Yes. I will leave it there. I am not proposing that an episode of Four Corners from 40 years ago is going to be posing a massive drain on your servers. It is more that the entire assemblage is of cultural importance.

Mr Scott : I think that is true. I think the BBC is doing some of this. We still have a challenge with the cost of digitising our archive and how you create an architecture that makes it accessible.

Senator LUDLAM: Don't lose any of it while you are making your minds up.

Mr Scott : We are keen to preserve it.

Senator LUDLAM: Thank you very much.

Senator RUSTON: On a more specific area: when we were talking in estimates earlier this year we discussed the cessation of news services by WIN TV in South Australia. We were discussing that the ABC had taken up the mantle of putting video journalists into regional and rural areas. I am wondering how far that has progressed. I know there is a video journalist who has been based at the ABC in Renmark, but I wondered whether that program has expanded.

Mr Scott : I can get that on notice for you. Some of the additional news funding that came to us gives us the provision to put people and technology out in regional areas to provide stronger coverage and for us to be able to take advantage of our website and ABC News 24 to take that to a broader audience. But I can give you some of that detail on notice.

Senator RUSTON: I would be interested in knowing how far you have got and what your plans for the future are in that particular area, particularly in relation to rural and regional news and sport exposure.

I come back to the ABC fact-checking unit. Could you give us a little bit of information about it? Is this costing a significant amount of money to operate, how many staff et cetera? Is that something you have available?

Mr Scott : Let me see what I can find here. I have some information on the fact-checking unit. It has been operational from just before the election campaign. There have been numbers of stories that you will have seen have appeared on it—about 70 stories. I do not have the precise staffing level here now; but, yes, it has produced 70 stories over two months. The top 20 stories were viewed a total of 650,000 times online. I must say that, even though there were some suggestions here that this would be a very controversial undertaking, I think it has proven not to be the case. I am very happy with its performance. Unlike some other fact-checking units that have emerged I do not think it is particularly florid in how it executes its work. It is pretty factual and fact based. One of the things I am particularly pleased with about it is that, in addition to the staff that we have employed, we have a robust panel of advisers around economic matters and also around broader political matters that our staff can go to as a reference point. I can give you details around the exact staffing numbers on notice.

Every now and again I see a reference to a $10 million fact-checking unit. That is emphatically untrue, as the answer on notice will show you. We had numbers of things that were done out of the funding that was provided, which was a funding total of $10 million including regional staff, specialist staff, regional offices that we were opening and the fact-checking unit; but I will provide you with the detail of that on notice.

Senator RUSTON: I suppose it is all to the point of you saying that you are very happy with the operation of it.

Mr Scott : You know, it is working well. It is a good contribution. I must say that, in this era of the 24-hour news cycle and 24-hour news—the ABC partly helped create that environment here—I think it is terrific that we have a specialist team of people who can just take a step back from the rhetoric of the day and the hour and provide some depth and analysis and some reasoning behind that. That is good for public policy and discourse and they are doing a strong job.

Senator RUSTON: Have there been many complaints?

Mr Scott : I understand there have been minimal complaints around the operation of the fact-checking unit. It has not generated many complaints at all.

Senator RUSTON: Would it be easy to access a copy of what the complaints actually referred to, or not?

Mr Scott : Our complaints are protected by privacy in that we offer privacy to those people who are complaining, and privacy around why. In an answer on notice I might be able to give you a bit of the shape of any complaints. That is fine. But it has been noteworthy for the absence of complaints. The ABC has a well honed complaints policy. There will be times when we get numbers of complaints—although I would say, on the back of this election campaign, given the amount of coverage we were doing we had really relatively few complaints, and the complaints were actually quite even-handed in their outcome. I am happy to give you a bit more detail.

Senator RUSTON: What would be really quite an interesting comparison would be, broadly, what the content or the nature of the complaints were as opposed to the specific subjects. For instance, how many of the complaints to your agency were, broadly speaking, directed towards bias?

Mr Scott : Yes, sure. A lot of that reporting—not about the fact-checking unit, but more broadly— appears in the annual report.

Senator RUSTON: Do you get a lot of complaints in relation to actual content?

Mr Scott : It depends. I remember, early on in my days in the role, Kerry O'Brien interviewed Prime Minister Howard and, as I tell the story, there were about 200 complaints the next day. About 100 of them said, 'Why was Kerry O'Brien so tough on the Prime Minister?' and the other hundred said, 'Why did Kerry O'Brien go so easy on the Prime Minister?' So you will get certain content—it might be an interview on 7.30 or a tough Four Corners—that you will get complaints about. But I am amazed—sometimes people will look at the same program and come up with quite different interpretations of what they saw, particularly when it comes to issues of bias and impartiality. People often bring their own world view to those matters.

We investigate those complaints. We have an independent unit that operates at the ABC. It works separately from the content division to review those complaints and they provide a report to the person who has complained. The board, at every board meeting, gets a summary of all those complaint reviews and where there are noteworthy findings that are upheld—where it is found that we did not breach our editorial standards—the board gets a report on that.

If people are unhappy with our complaints process outcomes, they can take those outcomes to the ACMA and the ACMA can review them. But again I would say that overwhelmingly—it is something like 90 per cent plus of the time—the ACMA confirms the findings of the ABC audience consumer affairs unit.

Senator RUSTON: At the moment apart, obviously, from the Chris Kenny incident that is with the ACMA, are there any other major issues with the ACMA in relation to bias of content with the ABC?

Mr Scott : With the ACMA? I would have to check on that.

Senator RUSTON: There is nothing that springs to mind.

Mr Scott : No. There are often a number that are with the ACMA. There will be some pockets of contentious programming that will generate some response. Often if there are enough complaints—irrespective of what the finding is or if the program is clear—then they will go to the ACMA and then we wait and see what their findings are.

Senator RUSTON: Finally, could you update us on negotiations with Cricket Australia?

Mr Scott : Yes. The first test is almost here. I understand that we are very close—

Senator RUSTON: It is in Adelaide.

Mr Scott : to finalising negotiations with Cricket Australia. We expect to be able to continue our 80 year plus relationship with them in broadcasting the cricket from Thursday. There are just a few matters.

I think it is fair to say it has been a difficult negotiation with Cricket Australia this time for a couple of reasons. Firstly, the whole way we have approached the ABC in recent years is to deliver our content to our audiences where they are, on the device that they want, and so we were very disappointed when Cricket Australia said that it would not be possible for us to stream our cricket coverage on ABC websites or ABC apps. We know through our feedback there are thousands of members of the audience who have been consuming their content in that way. The rights are held by Cricket Australia. It is their right to withhold them from us but it is disappointing. I must say I was also disappointed that we no longer have exclusive radio rights to test cricket in Australia even though I am confident that, if you are a cricket fan, you are going to want to be hearing Jim Maxwell and Kerry O'Keeffe called the cricket this summer irrespective of what is being offered on commercial radio with advertising at the over change. It has been a difficult negotiation. We have decided to take the investment of some of our staff and broadcast the A-League which we think there is an audience for, and there should be good engagement around that, but we are committed to test cricket and ball-by-ball coverage of that matter. We trust that we will be starting that process with the first test on Thursday.

Senator RUSTON: We hope so. You probably do not have this information but it would be handy to know. In relation to some of your high-profile presenters—for instance, people like Phillip Adams—how do you negotiate? Because he obviously does not produce from the Sydney studios, I understand.

Mr Scott : No, he is often in Sydney—but not always in Sydney. He lives up in the Hunter Valley.

Senator RUSTON: Yes.

Mr Scott : Look, these are usually annual contract negotiations with some of our talent. There are some people who are employees, and they are year-in, year-out; but there are others—particularly high-profile, on-air talent—who have annual contract negotiations. Mr Adams will regularly broadcast from Sydney. At times he will broadcast from Muswellbrook.

He has been quite unwell—he has been in and out of hospital a bit—so, as for others on our staff, we try to be as flexible as we can be because there is great audience support and passion for Mr Adams' program. We do our best to help him to be able to deliver that to our audience.

Senator RUSTON: I suppose I make that plea in the context of ever-shrinking or ever-greater pressure on resources. We often see that it is rural and regional areas that are perhaps the ones who are not necessarily getting an increase in expenditure. I would just suggest that maybe we could look towards making sure that we continue to get outreach to rural and regional areas—in the context of spending money to set up a studio in Muswellbrook.

Mr Scott : It is interesting. I must say my view is that there is no doubt that our regional and rural services are absolutely vital. It is an area that makes the ABC distinctive. What you can see happening with commercial radio in the bush is that clearly that business model is facing difficulties. Increasingly you are seeing that with the newspapers in regional areas as well. So the ABC becomes more important than ever.

It is one of the things that the minister, Mr Turnbull, said at his first function with the ABC—you can make an argument in this era that the ABC is more important than the given what else is happening in the media landscape. That is very true in rural and regional areas. I think the ABC has a responsibility—this goes to the questions we had earlier—to make sure that our resources are used efficiently and effectively. We do want local voices engaged with local communities and we look to make sure we are making the appropriate investment in regional and rural places.

Senator RUSTON: Absolutely, thank you.

CHAIR: Senator Ludlam, do you have one more question?

Senator LUDLAM: Yes, just one last question that I will ask you to put on notice. My staff are demanding to know when Rake is coming back.

Mr Scott : I can tell you, being a resident of Sydney, I would get word of sightings around Macquarie Street and William Street in the second half of this year. The ABC will be launching its television slate for next year in about a week's time. I think you can expect Rake season three in the first half of next year, and I understand that there are troubled times ahead for Cleaver Greene.

CHAIR: That completes questions for the ABC. Thank you for your presence.