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Environment and Communications Legislation Committee
BROADBAND, COMMUNICATIONS AND THE DIGITAL ECONOMY PORTFOLIO
Australian Broadcasting Corporation
- Committee Name
Environment and Communications Legislation Committee
Bilyk, Sen Catryna
Birmingham, Sen Simon
Fisher, Sen Mary Jo
Bernardi, Sen Cory
Singh, Sen Lisa
Abetz, Sen Eric
Conroy, Sen Stephen
- Sub program
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Environment and Communications Legislation Committee
(Senate-Wednesday, 23 May 2012)
SUSTAINABILITY, ENVIRONMENT, WATER, POPULATION AND COMMUNITIES PORTFOLIO
Department of Sustainability, Environment, Water, Population and Communities
Office of the Supervising Scientist
Senator IAN MACDONALD
Murray-Darling Basin Authority
National Water Commission
ACTING CHAIR (Senator Fisher)
Environmental Water Office
- Department of Sustainability, Environment, Water, Population and Communities
BROADBAND, COMMUNICATIONS AND THE DIGITAL ECONOMY PORTFOLIO
Special Broadcasting Service Corporation
Australian Broadcasting Corporation
Australian Communications and Media Authority
- Special Broadcasting Service Corporation
- SUSTAINABILITY, ENVIRONMENT, WATER, POPULATION AND COMMUNITIES PORTFOLIO
Content WindowEnvironment and Communications Legislation Committee - 23/05/2012 - Estimates - BROADBAND, COMMUNICATIONS AND THE DIGITAL ECONOMY PORTFOLIO - Australian Broadcasting Corporation
Australian Broadcasting Corporation
CHAIR: Welcome, Mr Scott. Would you like to make an opening statement?
Mr Scott : No, I am happy to address the senators from the southern and western states who are here today.
Senator BILYK: Welcome. I have a few different questions about a few different areas, so there might be a bit of jumping around. The first issue might come across as a bit frivolous but, bearing in mind that there are job losses going on in Tasmania, I thought it was worth mentioning. In the Australian on 21 January there was a story written by the owner of the dog that was cast in what I understand was an outsourced drama series produced by the ABC and Matchbox Productions, The Straits. The story claims that the producers—
Mr Scott : We are trying to remember the story, Senator.
Senator BILYK: if you would like it, I have a copy of it here.
Mr Scott : What was the thrust of it?
Senator BILYK: The story claims that the producers flew the dog owners to Cairns for a two-week all-expenses-paid stay at a five-star hotel and provided a chauffeur driven vehicle to transport Coco, the dog, from Brisbane to the Gold Coast. It also says that, the dog having finished her film commitments, the owner and her husband had to fly from Cairns to the Gold Coast in order to appear at the Byron Bay Writers Festival. The only problem was that Qantas, the only airline that transports pets, did not fly into the Gold Coast from Cairns. So the TV producers came to Coco's rescue again, organising for tickets to fly them into Brisbane. There they were collected by a chauffeur, who installed Coco in the front seat of the stretch limousine. A plastic bowl of water was placed on the floor in front of her and the classical music on the radio was turned down. For the three-hour drive to Byron, the woman and her husband were relegated to the back seat. The issue is not that the woman and her husband were relegated to the back seat. My concern is that we have funding cuts going on. We have people losing jobs in production in Tasmania. I understand that this was a co-produced production but I am interested in knowing how much this might have cost?
Mr Scott : I recall the story but it was published some months ago now and I do not have the details.
Senator BILYK: It was 21 January.
Mr Scott : Yes. It was 4-plus months ago now. I do not have the precise detail at hand. I think this was viewed as a humorous bit of writing and I think questions were raised as to what was presented. But I am happy to provide you with details of that on notice. I have nothing further to add to that story.
Senator BILYK: Can you provide on notice answers to how much it cost, what level of verification of budgets for the production of The Straits was undertaken by the ABC prior to the decision to commission the program, and whether the ABC is surprised that there would appear to be such a level of padding in the program's budget as to allow Matchbox Productions to appear to have been so profligate in its spending?
Mr Scott : I can speak broadly to that, Senator. This is a co-production, but the ABC does sign off on budgets. There is a significant examination of that. Often these independent productions are independently audited at the end of their production. The books are audited. Then often our group audit function does a review. That is a standard format. So we are happy to give you details of that.
Senator BILYK: I would appreciate that. Senator Singh and I, and Senator Abetz, all Tasmanian senators, are concerned about what is happening with the ABC in Tasmania. I have a few different questions there. Friends of the ABC were at the very well-known Salamanca Markets recently. In the first week they got 270 signatures and in the second week they got 436 signatures on letters from the public regarding support for the ABC in Tasmania. Are you aware that those letters have been forwarded from the Tasmanian public to the chairman, Mr James Spigelman?
Mr Scott : Yes, I am.
Senator BILYK: Will you ensure that he responds to those concerns?
Mr Scott : I understand that a response has already been prepared. I spoke to Mr Spigelman—
Senator BILYK: When is that likely to be sent?
Mr Scott : I expect it would be with them next week. Mr Spigelman was in Canberra today and I discussed that matter with him.
Senator BILYK: That was short and sweet. Still speaking about Tasmania, I have heard rumours, as have a number of people who have spoken to me about it, that the 7.30 in Tasmania might no longer be locally produced. Do you have any information on that?
Mr Scott : That is the first I have heard of it, Senator. My understanding is that we produce the 7.30 Report for Tasmania on Friday nights. I have heard of no plans or intention to make any changes to that at all.
Senator BILYK: That is good news and a nice answer for us. You are not going to change the name or anything?
Mr Scott : No, there is nothing I have heard at all.
Senator BILYK: While we are talking about Tasmanian productions, I think last time you were before us you told us that The Collectors was sleeping. I am wondering if it is comatose or deceased.
Mr Scott : We have no plans at the moment to bring back The Collectors. Our investment in local production in Tasmania is focused on Auction Room at this point.
Senator BILYK: That brings me to my next question. Is there a recommendation regarding the continuation of Auction Room?
Mr Scott : I am pleased to be able to inform you that we are pleased with how the first series of Auction Room has gone. I want to thank the staff there for their work on it. My understanding is that the television division intends to commission a second series of Auction Room. That will go into production for the second half of the year.
Senator BILYK: Do you know how many shows might be in that second series?
Mr Scott : I do not have that detail in front of me. I suspect it would be similar to the number of shows in the first.
Senator BILYK: Could you take that on notice and find out for me?
Mr Scott : Certainly. But I think it is good news. I did read a number of reports that suggested that because of the timeslot and other factors the ABC was not wishing that program well, which I thought was an offensive comment. Of course we wished it well. In that timeslot on a Sunday evening we have had very successfully rated programs. We are pleased with how the first series has gone and we will be commissioning a second series.
Senator BILYK: I think those concerns were—people have been telling me—where that there was some expectation that there might have to be 300,000 viewers.
Mr Scott : I think we should talk about this. I think it is a very important issue that you raised. These are estimates committees reviewing budget and budget budgetary performance. At the ABC of course we pay attention to how many people are watching the program. It is not the only thing we pay attention to, but of course we pay attention to that. This is a production that has significant cost. Because of the production overhead that we carry in Tasmania it is a more expensive program than it would be if we were making it in other places, and it is more expensive than it would be if we were making it in co-production. So of course we pay close attention to the audience numbers. On all of the programs we commission we have a sense of what we would expect that audience to be, and if the audience number for any program that we produce falls significantly short of the audience expectation that we have then we would ask questions about the way we are making that program, the cost of that program and whether there were other places to make the investment. I am not apologetic at all. I met with the staff in Tasmania and I said that of course we would have audience expectations.
Senator BILYK: Was that audience expectation 300,000?
Mr Scott : I do not have that precise detail in front of me but the advice that has come back to me from the television division is that, given the competitiveness of the timeslot, they were happy to invest in the show for a second series. One of the things we recognise is that sometimes it takes time to grow an audience. I know that the staff there were concerned that we would make a pre-emptive decision early, which is what we clearly have not done. We are looking to see whether this program can grow a strong audience over time. That is what we are doing. I am pleased to be able to tell you tonight—we have not announced this previously—that we will be commissioning a second series of Auction Room.
Senator BILYK: How long does it take to get the figures on viewing capacity?
Mr Scott : Overnight.
Senator BILYK: So you would have an idea now on what the figures were.
Mr Scott : Yes.
Senator BILYK: Has it picked up?
Mr Scott : It is a competitive timeslot. It think we concede that. There are some big programs that go on the commercial networks around that time. It has received audiences of between 250,000 and 300,000 in the 5 metropolitan areas that you do the first cut on. Then you add to that up to around 50 per cent for the areas that are not surveyed in the five metro areas. We put it up on iView and I think it might be available for download as well. It is not a stellar number but we thought it was a solid enough number to reinvest in the program.
Senator BILYK: I am sure that those people in Tasmania working on that show are very pleased to hear that. When you were in Tasmania in December you mentioned that you were talking about a new historical factual program in Tasmania.
Mr Scott : It was a private staff meeting. Is that what your reference is?
Senator BILYK: This is an ABC news clip that I have. I am not sure it was that private.
Mr Scott : Which series was that? Is that Who's Been Sleeping in My Bed?
Senator BILYK: It just says 'talking about a new historical factual program in Tasmania'. Is there any movement or anything on that?
Mr Scott : I am not sure. I would have to check on that. That was one we were looking to that we would be making in co-production and would be doing some filming there. I would have to find out details on that.
Senator BILYK: When did Who's Been Sleeping in My Bed start? That was last year, wasn't it?
Mr Scott : At the end of last year, I think, yes. Let me find out some more.
Senator BILYK: The 2011-13 ABC television production strategy statement was put out by you and Mr Dalton and distributed to staff—is that right?
Mr Scott : That is right, yes.
Senator BILYK: Was that just three pages?
Mr Scott : Yes, that is what we released to staff.
Senator BILYK: Is that the whole statement?
Mr Scott : There are multiple documents that are developed in our television division around all of their commissioning. Every commissioning meeting they have there are folders of data that are pulled together around each production. There were some questions about our commitment to a mixed production model, whether in fact we were set on a path of centralisation, and our commitment to working with staff. There are issues that have emerged about how to deal with ideas staff have for productions and things like that. So we did some work on it. We did some work with the board on it and we put out that statement to staff that spelled out, in a sense, the key principles that we were looking at. It included those seven bullet points that you would be aware of if you have a copy of it, which show the thinking and the strategy behind our television production slate. It made the commitment to a mixed model, it made a commitment to retaining a regional presence and it made a commitment to 75 per cent of broadcast hours being commissioned internally over the three years of the strategy. So that spells it out. But behind it there is a lot of detail, particularly in our television division.
Senator BILYK: But do staff see any of the rest of that detail?
Mr Scott : Different people in the television division see different parts of that material from time to time. We do things like develop a minimum production guarantee, which is a statement that our television resources department work on together on—basically what the load of internal production is going to be over a 12-month period, where that production is going to be made, what time of the year the production is going to be made, the number of hours and the kinds of resources that are involved. It is a very detailed planning exercise that we undergo.
Senator BILYK: You mentioned internal programming. I think you said 75 per cent. Is that right?
Mr Scott : Yes, that is right.
Senator BILYK: Does that include or exclude Rage and news and current affairs?
Mr Scott : It excludes Rage and news.
Senator BILYK: What percentage of the total production budget will be available for the production of the 75 per cent? What proportion is earmarked for the external component?
Mr Scott : I do not have that figure in front of me, but it is fair to say that it is not 75 per cent. I will explain why. As you will have seen in the figures that we released in the answers on notice, say about The Slap—The Slap cost more than $1 million an hour to make. The ABC was contributing around half of that. That is a great example of the leverage that comes with drama—contributions made by Screen Victoria, the state production bodies, Matchbox and others. But the genres that we are mainly involved in working in coproduction around are our most expensive genres. That is drama, documentary and key aspects of our children's slate on ABC3. So the percentage that we are spending on internal production does not represent 75 per cent, because an hour of television is not equal to an hour of television as far as cost is concerned because of the different genres.
Senator BILYK: Are you able to take that on notice and give some information to us?
Mr Scott : Yes.
Senator BILYK: How much has the ABC earmarked for internal production in regional centres over each of the three years—2011, 2012 and 2013?
Mr Scott : I can put that on notice and come back to you on that. But I think it does go to an important question and I know the focus of the good senators from Tasmania around this kind of issue. Our charter does not say that we need to make internal production at the ABC all around the country, but the flavour of the charter absolutely is to reflect the country to the country. So we are looking to film—where we are not doing internal production—to work in coproduction with our partners who will be making productions around the country. The Straits, which you referred to earlier, was clearly filmed in Far North Queensland. We have a slate of factual and documentary programs that we are filming in Western Australia. I think this is an important thing to be able to demonstrate that we do—that we are reflecting the country to the country. If you look at some of our internal productions over recent to mid years—some of that production is really quite generic; it could have been made anywhere. It was made in a studio and the studio was no different to other studios elsewhere. I must say I do like the idea that we get out of the studios and are able to engage with people who are making productions that reflect the geographical diversity, the ethnic diversity and the historical diversity to different parts of the country. We are happy to map and document that and to continue to be able to demonstrate that over time.
CHAIR: We have to move on.
Senator BILYK: I do have some questions that I will give you on notice, Mr Scott.
Mr Scott : Thank you, Senator.
Senator BIRMINGHAM: Mr Scott, have you finalised negotiations regarding the Australia Network contract?
Mr Scott : Not at this point. We are in discussions with the department of finance, the department of communications and central agencies, but finally this is a matter that we are waiting for final resolution on. We have had further interim funding from—
Senator Conroy: Christian is not here. Do you want to start, or wait?
Senator BIRMINGHAM: Keep going, Mr Scott. I have been trying not to bite all day.
Senator Conroy: Paging Christian Kerr—Simon is on.
Mr Scott : We have had our funding extension and the network is continuing on. But we look forward to its resolution.
Senator BIRMINGHAM: How long was your contract extension until, Mr Scott?
Mr Scott : I think it is to August at this point. It was extended through until August.
Senator BIRMINGHAM: Which is at least 12 months, if not a tad more than 12 months, from when it originally expired. Mr Scott, how many meetings—you mentioned finance and comms as departments that you had—
Mr Scott : Sorry, the Department of Broadband, Communications and the Digital Economy. One of the things in the government's decision is around the opportunity for convergence in the national broadcasting, and that is something that I think is in the national interest. What we see in these markets as we look at them carefully is a convergence of television and radio and online and mobile, and what this decision allows us to do is to bring very closely together Australia Network and Radio Australia in a way that they were not able to be brought together before and to think of these markets in a converged sense. That is what the world is doing; that is what the ABC is doing domestically and that is what the government's review about convergence is all about. So because the funding stream for Radio Australia comes to us through our appropriation from the Department of Broadband, Communications and the Digital Economy they are clearly the stakeholder in this. DFAT is clearly a stakeholder too, with their involvement in Australia Network, and Prime Minister and Cabinet of course. This is a key issue for government. So we are just looking to resolve these matters. I do not expect it will be too long now. No great drama.
Senator BIRMINGHAM: So if you were looking for a reason for the delay in resolving it—because it is nearly six months now since the government announced that the ABC would receive the new Australia Network contract and of course—
Mr Scott : There have been some changes in DFAT, as you would be aware, and we are just looking to resolve these matters now.
Senator BIRMINGHAM: That presents an interesting question, Mr Scott. Who now signs off on the DFAT end of the contract?
Mr Scott : All this has to be finally worked through—where the funding source comes from and the nature of the engagement.
Senator BIRMINGHAM: The funds are appropriated to DFAT. Is Minister Conroy still the approver of the final deal related to those funds?
Senator Conroy: I think my role is terminated.
Mr Scott : I think that was the decision. How the funds will be appropriated and from where is one of the issues that is being resolved.
Senator BIRMINGHAM: Your role as approver in that sense was terminated, Minister?
Senator Conroy: Yes.
Senator BIRMINGHAM: So it reverted back to—
Senator Conroy: We will have the department here tomorrow and they can confirm it. You will be pleased to know that I—
Senator BIRMINGHAM: So as far as you are aware it reverted back to Minister Rudd and is now with Minister Carr?
Senator Conroy: have been terminated. I think that is the case. I am happy to correct it tomorrow when the department is here but I think that is the position. Getting ready for the estimates I said, 'Can we find out where it's up to.' I think the department might be able to answer some questions tomorrow.
Senator BIRMINGHAM: It is amazing how quickly we move on.
Senator Conroy: Just here doing my job.
Senator BIRMINGHAM: You got the outcome you wanted, and the details you can leave.
Senator Conroy: No, the cabinet made a decision.
Senator BIRMINGHAM: A decision to support the outcome you wanted.
Senator Conroy: The cabinet made a decision.
Senator BIRMINGHAM: Mr Scott, as far as there have been delays in the six months, they can best be attributed to the fact that you are essentially newly negotiating over the ground of convergence, and you have highlighted yourself the fact that there is a challenge there that your funding comes from two different sources across the two different platforms. It sounds for all the world like you are hoping to align that.
Mr Scott : I think there is a tremendous opportunity for alignment here that is in the national interest—not just the funding source but I suppose the issues to do with what are the goals of the international broadcasting arm, what the outcomes are and what the measurements we are going to look at are. I think this is an opportunity for us to look at those things together rather than separately, in a sense the same way we do for the ABC domestically. Those are the kinds of things we have been having discussions about—profitable discussions. The network is going on well and these things will be resolved as a matter of course. There is no real immediate pressure around that. There is continuity of the service. But it is a good opportunity for us to think through the opportunities.
Senator BIRMINGHAM: Are you any closer to being able to broadcast into China?
Mr Scott : We had meetings today with officials from China. You will find if you study it that no international broadcasters have been given further landing rights in China in the last couple of years. I do not think there is any expectation that there will be movement on that in this momentous year in China. But we continue to hold meetings and make our case. But it is not as though we feel that a host of other international broadcasters have been given access to China and we have not. Basically there has been a lockdown of further access at this point. I can say though that we have made significant ground in our partnerships with Chinese broadcasters, we think in quite an important way. We have signed agreements with the Shanghai Media Group. We have entered into a co-production agreements with CCTV around some children's programming, particularly animated programming. These are all positive things and we think help us build a partnership with China. We have a partnership with a number of other international broadcasters and we think these partnerships with China will be beneficial.
Senator BIRMINGHAM: All of which influence what you broadcast into Australia or elsewhere, but of course at present do not influence what you broadcast in China.
Mr Scott : The ABC has shown a commitment to China in a number of ways. The ABC, we believe, has been the western broadcaster that has had a correspondent based in China longer than any other western broadcaster. Next year will mark 40 years. We would love to get landing rights for Australia Network into China. But to develop that is not easy. There have been books written about Rupert Murdoch's failed attempts to develop that kind of broadcasting relationship with China. What we understand is that we need to be involved with them in a partnership and a working relationship over a period of time, and that is the work we are now doing as, we hope, a precursor to landing rights being given to Australia Network.
Senator BIRMINGHAM: Is there any extension of the Australia Network's coverage either of news from the Middle East or, in particular, broadcast into the Middle East?
Mr Scott : At this point there has been no change to our footprint for Australia Network, which is predominantly still the Asia-Pacific area. But we do continue to look at ways that may possibly allow us, particularly using online, to expand the footprint of those services. That is something we continue to cost and to evaluate over time.
Senator BIRMINGHAM: Two of the areas that came up—the first one, China, is critical to the first tender and the second one, the Middle East, is critical to, allegedly, the second part of the tender. There has been no real change—
Mr Scott : I do not think we should be naive about the challenge around China. As I said, no other international broadcaster has had a big break on landing rights, and we are doing the work. I remember I talked to the Korean broadcasting service—
Senator FISHER: You have kind of given up before you have started.
Mr Scott : No, we have not given up.
Senator FISHER: That is what it kind of sounds like.
Mr Scott : Not at all. Let me put it to you this way. I have had numerous meetings in China. I have spoken with other broadcasters who have got in. I have spoken to the head of the Korean broadcasting service that got landing rights in China. I think they were the last international broadcaster, with the exception of the Russians—and there was a lot of politics in the Russian one. They said it took four or five years, multiple meetings and multiple partnerships around a range of issues to get the landing rights. I think it would be more concerning for us and perhaps more concerning for the senators if a host of international broadcasters were being delivered into China because of new decisions that were being made and the ABC had missed out. That is clearly not the case. This takes time. We certainly have not given up. In fact we will be in China again we expect later this year. We will be celebrating the 40th anniversary of diplomatic relations with China next year and also the opening of the ABC bureau in Beijing. These are all matters that are significant. We continue to press our case with representatives of the Chinese government here and when we go to China; certainly, at international symposiums when we meet and deal with the Chinese bureaucrats who are involved in this decision-making process we never let the opportunity go by of making the case. I think some of the reporting of this around Australia Network was naive, frankly. There was a sense that if you simply signed an agreement or a partnership or a memorandum of understanding then you would get landing rights. Frankly, we have signed all of those things for many years. We are doing the work in partnership. One does not automatically follow the other. You just need to continue to do the work over a number of years, and that is what we are doing now.
Senator BIRMINGHAM: My last question should be a fairly straightforward one. Have you secured satellite capacity for Australia Network beyond June this year?
Mr Scott : I believe we have interim arrangements in place while the long-term funding flow is delivered. We are not concerned at the short-term satellite situation that we face. But when the full funding arrangement is confirmed we will then look to enter into those longer-term satellite arrangements.
Senator BIRMINGHAM: You have had 12 months or thereabouts and various extensions for all of those things.
Mr Scott : We have had more short-term contracts but we are relaxed on that, and when the time comes we will move into longer arrangements.
Senator BIRMINGHAM: Have all of these interim extensions for all of these little things and not-so-little things like satellite capacity incurred additional costs?
Mr Scott : I think in the long run, like anything, with a longer-term contract you will be able to negotiate more beneficial terms, and we look to be able to do that once the matter is resolved. But we are not worried in the short term.
Senator BERNARDI: Mr Scott, I have a couple of issues. It will not take up too much of your time.
Senator Conroy: Why isn't he a regular on Q&A? That is his first question.
Senator BERNARDI: I am invited quite regularly, thank you Stephen. Mr Scott, my question goes to the Public Service Commission warning bureaucrats about their inappropriate comments and things on social media.
Senator Conroy: Yes—very inappropriate comment yesterday from him.
Senator BERNARDI: Is the ABC going to adopt this Public Service code?
Mr Scott : Let me talk about our social media policy. We released it in November 2009 and we updated in September 2011. I think it has to be remembered that we are a media organisation and so we are in the communication business, and we have made an extensive investment in social media. You may not be aware that this last week TRIPLE J recorded its 500,000 friend on Facebook. It is an extraordinary kind of number and an extraordinary achievement, and if you have not—
Senator Conroy: That is more friends than you and me, Cory.
Mr Scott : I would encourage you to friend up to TRIPLE J.
Senator BERNARDI: I would not know how.
Mr Scott : We could teach you. Our news service has the best part of 100,000 followers on Twitter. Some of our journalists—Annabel Crabb, Leigh Sales, Latika Bourke and others—have lots and lots of people following them on Twitter. We have four simple rules that we outline. Do not mix the professional and the personal in ways likely to bring the ABC into disrepute. Do not undermine your effectiveness at work. Do not imply ABC endorsement of your personal views. Do not disclose confidential information obtained through work. They are four standards. There are other media organisations that came out with four pages of standards. We decided that simplicity was best. It is also a good fit for Twitter, which is a disciplined, focused medium anyway. It does not mean that with the thousands and thousands of tweets that are being sent out on a daily basis, possibly under the banner of the ABC, you will not be able to find one or two atrocities.
Senator BERNARDI: Mr Scott, that is not my purpose here. There are no traps here. It is a genuine question.
Mr Scott : No, but I am saying we have managed this, I think, well. There have been times when somebody has tweeted something inappropriately and we have taken steps with that person.
Senator BERNARDI: Once again, there is no trap; there is no gotcha moment from my point of view. Is it sufficient for an ABC employee on Twitter, for example, to say 'views are not my own'? Is that sufficient for them to put out whatever they like?
Mr Scott : I think that what they are trying to do when they say that is that it goes to bullet point three: do not imply ABC endorsement of your personal views. I have found that I have, say, re-tweeted something that has been of interest and I am at pains to point out—
Senator Conroy: From fake Stephen Conroy or something like that?
Mr Scott : I must say it was a great photograph, Senator, and I could not resist it. What I try to do on Twitter is make it very clear in my statement that if I re-tweet something it is not necessarily an endorsement; it is saying that this is commentary or an article or something that is of interest and people might enjoy reading. So we try and work our way through it. Are there specific issues that are concerning you about that though, Senator?
Senator BERNARDI: No, it is really quite a genuine question. Have you been in a position where you have had to discipline ABC employees in respect to their tweets or their Facebook?
Mr Scott : Yes, we have, absolutely.
Senator BERNARDI: What sorts of penalties have been applied?
Mr Scott : There have been formal warnings given to people over the way they have tweeted. I think on occasion there have been some people who were tweeting quite actively and we suggested that perhaps the way they were approaching it was not the way that we wanted them to approach it. But yes there have certainly been examples over the last few years where people have tweeted things that we believed were breaches of the guidelines—were inappropriate—and our managers have taken consequence for that. There have been times, I think, that the people themselves have tweeted and have then thought better of it, and at times they have tried to take those things down. Sometimes you can do that and sometimes you cannot. It is a challenge for us, frankly, because everything else we do goes through this editorial filter. Apart from absolute live broadcasting there is an editorial vetting process that happens with a lot of our material—nearly all of our material that goes to air apart from that in front of a live microphone. This is live broadcasting in a way. And, yes, there are some risks involved from time to time. But the benefits we have found as a way of disseminating breaking news, as a way of building communities of interest with our audience and as a mechanism for our audience to provide feedback—we have found it a very valuable exercise.
Senator BERNARDI: I hope you will agree with me that there is a distinct difference between a social media commentator or journalist like Latika Bourke versus, maybe, a research assistant or someone like that.
Mr Scott : Of course. Some of the research assistants or someone who is simply an employee of the ABC is no different from someone who is working at the Parliamentary Library here.
Senator Conroy: Or in Cory's office.
Mr Scott : They may work at the ABC but there is nothing about their tweet feed that suggests they work at the ABC and there is no point of identification. One of the things we have worked through is trying to think through whether different rules apply to somebody who is not a broadcaster, a journalist or a commentator but simply an employee who might work in the finance department.
Senator BERNARDI: A public servant—like in this instance where the code does apply.
Mr Scott : Yes. So I think our guidelines here are probably more comprehensive and detailed—are broader, in a sense—than some of the guidelines that are circulated here.
Senator BERNARDI: And yet the APS Commission has sought to effectively ban public servants from commenting in a private capacity over issues of public—
Mr Scott : But we are an independent statutory authority. These are the guidelines that have been endorsed as part of our editorial policy process. That is then approved by the board. Broadly I would say to you that I think they have, given the nature who of who we are and our work, worked well for us.
Senator BIRMINGHAM: There was a question on notice in respect to Insiders panellists.
Mr Scott : Which question was that?
Senator BIRMINGHAM: No. 68. There were 25 people listed who have appeared on Insiders since 2010.
Mr Scott : Yes, we have that.
Senator BIRMINGHAM: By my reckoning and that of a few others there is maybe a handful, or maybe one more than a handful, of what would be deemed conservative commentators.
Senator Conroy: Good grief, you have to get out more!
Mr Scott : This comes up from time to time and I am glad to engage on it.
Senator Conroy: You have to get off your own blog and get out there and meet people.
Mr Scott : It all depends on who is doing the counting, in my view.
CHAIR: Me, I think they are all conservative.
Mr Scott : Senator Cameron believes they are all conservative. I think there are some—we can talk about Andrew Bolt because he no longer appears. He was lured away by commercial dollars I suspect. Andrew Bolt clearly would have identified himself as a conservative commentator and I do not think there would be a whole lot of dispute around that. And I suppose there are one or two who are clearly of the left. But there are a whole lot of names here: Misha Schubert, Annabel Crabb, Phil Coorey, Karen Middleton, Kerrie Anne Walsh, Niki Savva, Marc Kenny, Chris Uhlmann—we could debate all day about where you are going to put them on the spectrum. So the suggestion—and it is not you but other commentators have said it—that unless you are a strongly branded, heavily identified member of the commentariat of the right you are automatically one of the left. I just do not think that is how the show works.
Senator BERNARDI: But some of the names you have mentioned do have a political leaning. There can be no doubt about that.
Mr Scott : You can say that, Senator, but we could run down the clock debating it. It is very interesting. Can I give you another example? I do often think some of these things are in the eye of the beholder. I remember when Kerry O'Brien would do interviews—a contentious interview with the Prime Minister of the day—at times we would have 100 phone calls, 50 per cent of people saying 'How dare he viciously attack the Prime Minister?' and the other half saying 'Why did he go so soft on the Prime Minister?'
Senator Conroy: It is hard. When you let Piers Akerman off, everyone else does look left wing.
Mr Scott : So some of this is in the eye of the beholder. But I must say I have never really ascribed to the view that all of these people carry labels. I think a lot of the gallery journalists who come are just commentating on the events of the day as they see them. Every now and then you will have a Piers Akerman on or you will have someone who is strongly—
Senator BERNARDI: Every now and again—I am delighted that they get on every now and again.
Mr Scott : But I am saying that a lot of the time if you look at that panel I do not think there is this kind of branding going on that you talk about. I just think there are three journalists who are putting a perspective on the program. Every now and then you will have a strongly identifiable left-winger or a strongly identifiable right-winger but a lot of the time there is none.
CHAIR: Thanks, Mr Scott. I think you have made your point. I am waiting for the first left-winger.
Senator Conroy: Cory, he is serious.
Senator SINGH: I congratulate the ABC for Heywire. That has been a great, successful program to bring young Australians all across the regions to engage their talents and skills. We have also, as senators and members, had the opportunity to engage with them here in Canberra through that program. It is a real flagship program for the ABC.
Mr Scott : Thank you, Senator. Can I just put on the record my thanks to the team in ABC radio that pulls together that Heywire program. And I want to thank the government departments—we would not be able to afford to do that without very significant funding that comes from government departments, and we are grateful for that support.
Senator SINGH: Last time we were here at estimates, Mr Scott, which was 14 February, I asked you questions relating to the broadcasting of football in Tasmania and how negotiations were going.
Mr Scott : Yes.
Senator SINGH: Lo and behold the very next day—
Mr Scott : There was a dramatic turn of events, Senator.
Senator SINGH: The very next day, Mr Scott—
Senator Conroy: No-one was more shocked than I was.
Senator SINGH: The very next day, that was the end of that deal, obviously—despite your comments the night before saying that you were keen to broadcast local footy for the next two years.
Mr Scott : May I say, Senator, that was the commitment we made. There is no doubt—and I am happy to reinforce it here—that we have a spotlight on our coverage of local football around the country.
Senator SINGH: So you did not know the night before about this—
Mr Scott : No, I did not.
Senator SINGH: pulling out of—
Mr Scott : Not at all. I did not know. In fact we were keen—I had been in Tasmania and we were indicating that we were happy to negotiate. I think it is fair to say that our negotiations with the Tasmanian Football League had always been more difficult than any of our negotiations with any other—
Senator SINGH: You raised that at the time and I acknowledge—
CHAIR: Senator Singh, please allow Mr Scott to finish.
Senator SINGH: It is all right; Mr Scott raised that last time.
Mr Scott : It had been difficult. We had also had the issue that on a per audience basis it had been our most expensive football code to do. Our statement around the country was an expectation that, whilst we tried to work through and talk with the major codes about the cost of this, our expectation was that we would do two years of coverage. So we were surprised when the Tasmanian football organisation indicated that they were walking away from us and that they were going to enter into a deal with a commercial broadcaster. But that was their call.
Senator SINGH: You were offering double for no more, though. Let us be straight about that.
Mr Scott : We asked around the country for more funding. If you look at other areas—
Senator SINGH: Anyway, let us move on from there. Since then, which is now some three months, what have you been doing to have ABC broadcast sport in Tasmania?
Mr Scott : Nothing further at this point. I am happy to add to that on notice. But we have at the moment a range of commitments for our sporting coverage. We will mount one of the biggest coverages of the Paralympics of any broadcaster anywhere in the world later on this year, and that is a major priority. We have ongoing commitments to a number of women's sporting codes that we are looking at.
Senator SINGH: But in Tasmania?
Mr Scott : Wherever those games are played. What we have—
Senator SINGH: But all of the other states have—
Mr Scott : What we have not done—
Senator SINGH: We have had VFL teams—
CHAIR: Senator Singh, I try and allow the witnesses to give a response and I am not going to have a slanging match between the witness and the senator. Ask a question and allow Mr Scott to answer the question. If he goes for too long then I will do something about it.
Mr Scott : Queensland Rugby League also took their deal away from the ABC. What we have not done in Queensland or in Tasmania is suddenly turn around and wonder what sport we are going to cover. We have a strategy around sport and that is what I explained last time: our strategy around sport. Our top priorities are women's sports and the Paralympics. We have moved away from other sports that are not part of that key area and we continue to review our sporting commitment over time. We have not done further sport in Tasmania and nor do I believe we have done further sport in Queensland since those decisions were made by the codes.
Senator SINGH: But you are still open to looking at women's sport in Tasmania, for example? You talked last time about women's basketball, women's soccer, women's cricket and women's netball. These are areas that are not picked up by the commercials and areas that you have mentioned should be a focus for the ABC. We have all of those in Tasmania, so would you be looking now to fill that void of ABC coverage of the TFL with women's sport in Tasmania?
Mr Scott : I do not have any further details than I have told you at the moment. I am happy to take that on notice. We currently have a series of contracts in place with the major women's sporting codes around the country. We are currently fulfilling those contractual obligations.
Senator SINGH: So, given that Tasmania's OB van was used for those weekly sporting broadcasts, what is the future now of that facility? I presume that is used for when Q&A comes down to Hobart and for Anzac Day and a number of other official events and so on. What is the future now of that?
Mr Scott : We are reviewing OB van use around the country. As I indicated previously, in our strategic plan that we announced last December there were a number of commitments that we made and there are certainly activities that we want to be able to continue doing. One is broadcasting Anzac Day all around the country. It is our biggest broadcasting day of the year. We want to be able to take Q&A out on the road—with Tasmania earlier on that too. The reality, though, is that I understand we are the only broadcaster in the country that owns OB vans. OB vans are used primarily for sport. With all the sport Channel 9, Channel 7 and Channel 10 are doing, they do not own OB vans; they hire OB vans. So I do not think we should confuse our commitment to local coverage to ownership of pieces of technology. We are continuing to review the number of OB vans we need and where those OB vans need to be located, and that is work that is ongoing. We are concerned, of course, when there are vans that are underutilised, and we will continue to look at where the demand is.
Senator SINGH: In relation to the ABC no longer covering TFL games, have any staff lost their jobs since the ABC has ceased broadcasting that?
Mr Scott : Not permanent staff. I think casual staff get employed—and of course they will not be employed if the work is not there—but I do not think there has been a permanent staff change.
Senator SINGH: In the ABC's annual report, on page 91 it refers to ABC employee full-time equivalents. It shows an increase in that financial year up to 4,599. That is an increase of 42 FTEs. Where are these staff being located and what kind of division are they in?
Mr Scott : I am glad you asked me. They will mainly be in the radio division and that will mainly be because of ABC Open—the commitment funded by government to put 50 staff out in regional and rural areas to help promote local stories being told by local members of the community. We are delighted with how ABC Open has progressed and the kinds of stories that are being told. I am pleased that now those stories are being broadcast on ABC News 24 regularly. The key driver of that increase will be the rollout of the ABC Open commitment.
Senator SINGH: In that strategy you referred to before that came out at the end of last year, you talk about the new studio at Southbank and Sydney that will share the bulk of internal production. In the paragraphs thereafter it says something about how you are still committed to retaining a regional presence. How do you balance that out? What you mean in terms of the extent of regional presence when the bulk of internal production will be in Southbank and Sydney—Southbank in Brisbane, I presume that is.
Mr Scott : No, Southbank in Melbourne.
Senator SINGH: Hasn't the Southbank in Brisbane also had a big revamp?
Mr Scott : It is confusing us too, I can tell you. The mail is a challenge. We are at Southbank in Melbourne and Southbank in Brisbane. We are building a new television studio at our building in Southbank in Melbourne to replace the old television studios out at Ripponlea where we made Countdown, Sea Change and many other legendary programs in the history of television. The model that I think you are identifying here reflects the change in the ABC over some decades. In the early days of television, in the 50s and 60s, it was not possible to broadcast live programs simultaneously around the country, so we made a lot of local television in Tasmania that was shown only in Tasmania, and in Western Australia that was shown only in Western Australia. But what has happened everywhere—with us and with commercial broadcasters—is that you now largely run a national schedule. The way to most efficiently deliver that national schedule is, if you have studios, you have to have them busy most days, not have them dormant. So you have a crew and a studio. The crew is busy and the studio is busy, and that is how you run an efficient model. We will still be making television all round the country. We will certainly still be doing news and state-based 7.30 Report. In Queensland they do not do programs for the television division but they do Australian Story and Landline. As I was saying earlier, just because the ABC is not doing internal production does not mean the ABC is not a catalyst for production to be made. This work we are doing in Western Australia is not being made in our studio; it is being commissioned by the ABC. It would not be happening if it was not for the ABC. It is happening under the editorial oversight of the ABC.
Senator SINGH: So that is what you mean by regional presence?
Mr Scott : Yes. And I think this is absolutely one of the things we are keen to report on. If I talk to people in Western Australia they are very keen for us to come and provide work for the independent production sector to provide that catalyst for the industry. There is also great interest in us filming—
Senator SINGH: That is because, isn't it, there is no internal production in Western Australia?
Mr Scott : I am really happy to deconstruct it. If we do an internal production in Western Australia then we fund 100 per cent of it. If we do a co-production in Western Australia then it is often likely that we will get Screen Australia money to support it, we will get Screen West money to support it, the producer might put in some money and we get a 20 per cent producer rebate. And we often film that in different parts of the state. So that is a stimulus for the television production sector there. It makes taxpayers' dollars that are given to the ABC go significantly further. We keep editorial control over that matter. If we think in terms of audiences and the sector then this is a positive thing. I think it reflects our responsibility in our charter to reflect the nation to the nation. So there is a mixed model at play here: some internal production around the country but also co-productions where we think that is necessary.
Senator SINGH: I understand that. Perhaps we can we move on to something else. Are you aware, and have you read, an article on Inside Story by Professor Henry Reynolds—
Mr Scott : Yes, I know the story.
Senator SINGH: It is called 'A very British summer on your ABC'. In that, Professor Reynolds refers to the last Christmas-New Year period, particularly the peak viewing period between the end of 7.30 and the late news at 10.30.
Senator Conroy: Are you criticising the Dr Who Christmas special?
Senator SINGH: I would never do that, Minister!
Senator Conroy: I am very pleased to hear that!
Senator SINGH: Other than the Doctor Who special, Professor Reynolds outlines how on 29 of the 42 nights in question there were no locally made programs at all. Don't you think people have more time to watch TV over the holiday period? If so, why not have Australia presented to our national audience rather than a lot of BBC British programs at that time?
Mr Scott : Yes, I think it is a fair question. We are averaging around 55 per cent Australian content on ABC1 at the moment. That is the figure the convergence review recommended be a requirement for the ABC.
Senator SINGH: Over a year?
Mr Scott : Yes, over a year. But I think the question about the precise scheduling is of interest to us and well made. If you look at our top drama, say—The Slap or Phryne Fisher or The Straits—I understand the argument to show that over summer. The reality is that the total number of people watching television over summer is significantly lower. People are away; people do not watch as much television in the peak of summer. So our feeling has been to hold those programs back in the schedule for when the audiences are larger. Ratings is not the only thing that matters, but we would like those programs to attract good audiences and good ratings and to give them every chance to do so. That is why we put them on in a rating period by and large. But I think the question he raised about whether we are looking enough at our schedule, say, over a night or over a week was a point well made.
Senator SINGH: Twenty-one nights.
Mr Scott : Yes. Of course, Senator, we run news, we run 7.30—there is plenty of Australian content still running. But on a general entertainment schedule I take that on board and we will continue to review it over the summer.
Senator SINGH: That goes to a broader question—and I acknowledge that you have taken on board that there was no Australian content between those hours for 21 nights in our holiday period.
Mr Scott : I did not independently verify it but I take his word for it.
Senator SINGH: It goes to the broader question: does the ABC make enough product to be able to represent Australia to Australia? I know you say there may be, and I do not know about that, but I take your word for it, that there is a decrease in the holiday period of viewers. I would think there would be a lot of people on leave watching TV. There are also at that time a lot of visitors to Australia. I think those visitors watching TV for 21 nights would think they could be in a county of Britain rather than in Australia for those times. We have a lot of fantastic Australian product that has come out of the ABC. It could be repeated, for example, rather than the BBC imports.
Mr Scott : Some years ago we did do that. We ran repeats of some of our new drama. The other thing I would say, though, is that we do not just run one channel; we run four. The convergence review illustrated that the only multichannels out of this host of new multichannels available on free-to-air television that are broadcasting Australian content are the ABC multichannels—ABC3 and ABC News 24. In fact, we have an agreement that we will move to 50 per cent Australian content on ABC3. So I think if you look at it across the board there certainly is other Australian content there apart from ABC1.
Senator SINGH: But isn't ABC1 the flagship channel?
Mr Scott : I think it bears repeating that local content is by far the most expensive content we make. So we are prioritising our local content—the most expensive stuff we make an investment in—at times when the audiences are available, and our view is that that has not been over summer. But as to repeating some of our Australian content more over summer, that is something that we will be looking at for the schedule this year.
Senator Conroy: You have the cricket.
Senator BIRMINGHAM: Mr Scott, can I just ask for your perspective on the convergence review and its findings in relation to media regulation and whether the ABC or the ABC board has considered this, and what you see as appropriate media regulation for particularly the electronic landscape but a converged world as well, given the findings of the convergence review?
Mr Scott : I do not want to provide broad commentary, but let me put it in an ABC context for you. We were pleased that Justice Finkelstein—reinforced by the convergence review, I think—recognised the rigour and the thoroughness of the self-regulatory framework that exists within the ABC at the moment. We take our editorial standards very seriously. We have detailed editorial policies endorsed by the board and we have a thorough independent review and audit process that takes place when complaints come in. And there is nothing like it anywhere else in the Australian media landscape. In fact, Justice Finkelstein held it up as a case study and an example. We were a little concerned, however, that in his report, which was fundamentally looking at print journalism, he swept up the ABC—
Senator Conroy: And online.
Mr Scott : Print and online. He swept up the ABC into, in a sense, the one-size regulatory framework that he looked at. We were glad that the convergence review, on considering that, made out a separate case for the ABC and SBS. We certainly have the only boards that have enabling legislation that empowers our directors to specifically look at issues of editorial quality and standards.
Senator BIRMINGHAM: As it should be, being public broadcasting.
Mr Scott : Absolutely right. But it means that the focus around editorial quality and standards at gatherings of our boards would be more of a top agenda item than you would find in commercial media outlets. We think the system as it operates now for us works well. We have an independent review process. We deal with tens of thousands of audience complaints or questions every year. If audience members are not happy with that and they feel there has been a breach of our code of practice then they can take that to the regulator—in this case ACMA—and ACMA can bring down a judgment, decision or advice on that as well. So we think it works pretty well for us. That is basically the bones and structure of what we see as the regulatory framework being recommended by the convergence review continuing. We think it keeps intact, for the ABC anyway, a system that has been well thought through and well developed and operates pretty well in practice.
Senator BIRMINGHAM: As a case study, and not a television case study but a radio case study, I asked some questions in question on notice No. 84 regarding Adelaide ABC presenters Matthew Abraham and David Bevan, who were the subject of an adverse ACMA inquiry. Your response was that the ABC does not intend to appeal the findings of the ACMA investigation.
Mr Scott : That is true.
Senator BIRMINGHAM: I assume that means that the ABC accepts those findings.
Mr Scott : We accept, of course, ACMA's right to make that finding. We have discussed that finding and its implications with the broadcasters and the local radio network. There was quite a lot of publicity about that at the end of last year. I have discussed that finding with Mr Chapman, the head of ACMA. I believe he is appearing here, for one night only, later on tonight.
Senator BIRMINGHAM: You are his warm-up act, to borrow a phrase that may have been used elsewhere!
Mr Scott : Indeed.
Senator BIRMINGHAM: You answered my question on notice—and indeed answered just then—that there were discussions between the South Australian local content manager and the presenters. I understand that these matters need to appear internal, but it is unusual for the ABC to have an adverse ACMA finding against any of your activities.
Mr Scott : True. It happens.
Senator BIRMINGHAM: And that has obviously fed into your internal processes.
Mr Scott : It happens from time to time.
Senator BIRMINGHAM: Do you believe that if there is to be merit in the ACMA review process there should be some obvious and public response or statement or otherwise from the ABC?
Mr Scott : The process as it exists now has worked well. They make public their advice. They criticised the ABC. They criticised the broadcaster. That is a very public kind of statement and action. It then gets follow-up and generates much comment and much publicity. You are aware of it, others are aware of it and I think the Adelaide Advertiser was very aware of it.
Senator BIRMINGHAM: Perhaps unfairly so.
Mr Scott : You might say it; I could not, of course. But what I would say is that none of our journalists like adverse commentary coming out of the regulator in that way. That provides an opportunity for us to sit down and review the broadcast and review what was said, to note absolutely the way ACMA interpreted our—
Senator BIRMINGHAM: So in the ABC's case the adverse finding and the publicity that goes with it is penalty enough, in a sense, for the organisation to deal with.
Mr Scott : What we did not do—I certainly did not and radio did not—was come out and provide adverse commentary on that finding. We noted that finding. We put that through a rigorous review process. That was not the finding of the ABC but it was the finding of ACMA. That is as it is. We have noted that. We talked about it with the broadcasters. We have done a deconstruction of it and we have moved on. They are fine broadcasters, as you well know.
Senator BIRMINGHAM: Let us turn to Mr Spigelman's appointment. Has he chaired a meeting or meetings of the board yet?
Mr Scott : Yes, he has.
Senator BIRMINGHAM: Have there been any reviews initiated or particular new projects initiated or studies under Mr Spigelman's—
Mr Scott : I am not really privy to provide commentary on matters of the board. I never have in these estimates hearings up until now. I am pleased to say that Mr Spigelman's first board meeting was our board meeting in Brisbane where the Governor-General came to open our—
Senator BIRMINGHAM: At north Southbank?
Mr Scott : Correct. No Queensland senators are here tonight, I notice.
Senator Conroy: Showing true diligence.
CHAIR: It is six-four Queensland at the moment, but it is not going to last long.
Mr Scott : I appreciate that.
CHAIR: Cane toads.
Mr Scott : It was terrific having the Governor-General opening that building. It was a wonderful reward for our staff. That was the first meeting that Mr Spigelman shared.
Senator BIRMINGHAM: I am not asking you to reveal discussions as such or opinions of the board but I think it is a matter of internal policymaking and decision-making in the ABC if the board has decided to initiate a review or undertake any particular steps—
Mr Scott : I think it is fair to say—
Senator BIRMINGHAM: They are matters that—
Mr Scott : I think it is fair to say that Mr Spigelman indicated to me and others in meetings we had here today how much he is enjoying the role and he is currently under a process whereby he is receiving numerous briefings, getting to know our staff and getting across the full, vibrant complexity that is the ABC.
Senator BIRMINGHAM: You are being a good managing director and keeping the chairman busy.
Mr Scott : The chairman is busy in his own right, I can assure you.
Senator BIRMINGHAM: I am sure he would be. We will watch his tenure and activities with interest. Perhaps I can just ask quickly about another question on notice, No. 79, which related to Mr Frangopolous' opinion piece that was submitted to The Drum.
Mr Scott : Yes.
Senator BIRMINGHAM: The answer says that in order to provide a balanced view the acting director of innovation, which administers The Drum site, invited you to submit a piece, et cetera. Does the director of innovation review all publications that go on The Drum?
Mr Scott : The way The Drum has been structured—and it is a little different now, but certainly how it was structured at that time—was that the editor, in an editorial line management sense, reported to the director of innovation. Under our rules you refer up matters that are contentious or significant. That is where you go for advice and engagement. I cannot quite recall the piece now, but I suspect that Mr Frangopolous did have some character-forming pieces of advice for the ABC and the public broadcaster in general. This was one that was referred up—and there have been more recent examples actually. The Drum, unlike some other outlets in the Australian media, is a place where we open ourselves up for criticism and debate, and we allow that to happen in our columns and on air. So we welcomed Frangopolous's piece, but we thought it needed to be carried with another piece to let the debate work. We asked for a day's grace around that and we were shocked—shocked!—that Mr Frangopolous then took the piece and published it in a News Ltd journal, the Australian.
Senator BIRMINGHAM: We feign outrage on this side of the table, Mr Scott, not on your side.
Mr Scott : So he withdrew his piece and lo and behold it was published by the Australian. So that was the story. But any time Mr Frangopolous wants to submit another piece to us I am sure we will take it on its editorial merits.
Senator BIRMINGHAM: I am sure that you will. Let me ask a budget question related to the clearance of the 2.5 gigahertz spectrum band. The ABC is receiving not just some ongoing funding for that over the period of the forward estimates but a significant capital injection this year. That capital injection is to purchase other spectrum space or upgrade equipment—is that correct?
Mr Pendleton : No, there is an ongoing amount for the management of the clearance. The capital component is for all the equipment from the links themselves right through the broadcast chain.
Senator BIRMINGHAM: And that is all being provided in one lump sum, so once that is spent in the coming financial year, what is the ongoing funding for the clearance being used for? The departmental expenses as such, the $340,000 or $350,000, are fairly consistent—the capital is $12.1 million in one year.
Mr Pendleton : The $12.1 million will need to be expended quite quickly to clear the spectrum. We need to be out of that space in about 18 months. The ongoing maintenance of that equipment would then fall within the normal ABC capital replenishment program. So it is the actual cost of removing the kit that is actually operational and within the remit of our capital programs to maintain and keep going. It is a one-off expenditure that we need to incur to clear that space out to replace operational equipment.
Senator BIRMINGHAM: And your plans are in place to be able to do that quickly and swiftly as is required?
Mr Pendleton : Yes.
Senator BIRMINGHAM: Regarding digital radio and your continued rollout of digital radio, what expansion of the digital radio footprint will be achieved over the next financial year?
Mr Scott : Nothing at the moment. As you know, we did not have our triennial funding bid considered this year. It has been rolled over to next year. I expect the expansion of digital radio rollout will be something that we put as part of that bid. We are party to a trial here in the ACT which allows audiences here to experience digital radio. We are continuing to innovate as much as we can around the programming offerings we are making on digital radio—pop-up stations, great success with the Triple J Unearthed station and some other activities as well.
Senator BIRMINGHAM: Just a last quick one from me. You indicated in an answer to a question to me that the news was running a budget deficit some period of time ago. Has that recovered or is that likely to close at a budget deficit this year?
Mr Scott : We continue to look at that as part of our budget deal. Our news budget is pretty tightly geared and special one-off events in news, clearly, are expensive. But we continue to focus on our news budget. All in all the ABC is meeting its budget. It achieved its budget last year.
Senator BIRMINGHAM: Sure, but as we get very close to the end of this financial year now you will expect the news division to return a deficit at the end of the year?
Mr Scott : Yes, I expect the news division to return a small deficit, but I expect that the ABC overall to achieve its budget.
Proceedings suspended from 21:00 to 2 1:15
Senator ABETZ: I welcome the ABC. From last time there was a question No. 74 to do with The Slap. In question (e) I asked how many complaints had been received about the content or classification of The Slap. I do not want to traverse that at all, other than what is in that answer I was told that the third investigation is yet to be finalised. Can you confirm that that investigation was in fact finalised on 24 February 2012?
Mr Scott : No, I only have the information on the question on notice.
Senator ABETZ: Can somebody confirm that that third investigation has been finalised?
Mr Scott : Yes, we will dig it out for you.
Senator ABETZ: In fact I have here that it was. I am not asking the ABC this, but I am asking you, Minister. It is quite obvious that this answer must have been prepared before 24 February to have included in it that the third investigation is yet to be finalised. Clearly it was finalised on 24 February. But we did not receive the answer to the question on notice until 30 Aprilâsome full two months plus later. What is the story here? Why was this sitting in your office for over two months before we were given the answer?
Senator Conroy: I would have to check that and come back to you, Senator Abetz.
Senator ABETZ: Take it on notice, but it has become a bit of a practice out of your office, Minister. We had to ask the ABC last time and they told us when a batch of questions had been submitted to your office and we had to wait for months before it came out of the sausage machine. I simply make the observation that it becomes very tellingâ
Senator Conroy: So the committee got them three weeks ago.
Senator ABETZ: It becomes very telling when the answer is already two months out of date when you actually get the answer. It gives the game away.
Senator Conroy: You got it three weeks ago.
Senator ABETZ: Sorry?
Senator Conroy: You got the answer three weeks ago.
Senator ABETZ: I got the answer at least two monthsâ
Senator Conroy: No, I said the committee got the answer three weeks ago, at the beginning of May.
Senator ABETZ: And the issue is?
Senator Conroy: I am just making the point.
Senator ABETZ: You are supposed to be answering these questions within 30 days.
Senator Conroy: As I said, I am happy to take it on notice.
Senator ABETZ: It is quite obvious that the answer from the February estimates hearings was provided to you by the ABC before 24 February, so clearly within the time, and then you sat on it for over two months. Let us move on to question No. 65 in relation to coal seam gas. You, Mr Scott, were trying to provide a valiant defence, as the Hansard will reveal. But we now know that the investigation has seen that there were seven material inaccuracies on the siteâsix in contravention of the ABC's editorial standards. Last time around and in the answer that I was given to question No. 65, we were told that this information was checked et cetera, so can you please take on notice for us, because I assume you cannot answer this straight off, the six errors that required an apologyâ
Mr Scott : A correction, Senator.
Senator ABETZ: Sorry, the six that were found to be in contravention of ABC editorial standardsâcan you tell us in relation to each one of those with what authority or with whom or whatever the accuracy of the initial assertion was checked as asserted by the ABCâthat all of these things were checked and verified. And with whom were they verified, because those people that gave the ABC this false information clearly have a lot to answer for? Can you take that on notice. Can I then also ask whether the ABC has written to the people and organisations responsible for this grossly inaccurate evidence to say that the ABC's reputation has now been impugned because you unwittingly broadcast this misinformation? I trust that the ABC feels aggrieved thatâ
Mr Scott : I am happy to talk about the coal seam gas project. That was the first started journalism project of its kind undertaken.
Senator ABETZ: Mr Scott, can you answer the specific question. Time is short.
Mr Scott : I amâ
Senator ABETZ: We went through last timeâ
CHAIR: Senator Abetz, to be fair, Mr Scott did not even get a chance to answer.
Senator ABETZ: He was about to embark on saying that this was the first time that something like this had been done. We went through all of that last time. It is on the record.
Senator Conroy: Can we not second-guess the answers?
Senator ABETZ: This is winding down the clock.
Senator Conroy: Can you not answer your own questions, and let Mr Scott finish?
Senator ABETZ: It is an old trick by an old hand to another old hand. That is why I pinged him.
Mr Scott : There are thousands of data points that we investigated and all the documents that we could find are on the record. As you know, the APPEA thought that there were the best part of 40 errors. We reviewed that materialâ
Senator ABETZ: I am only talking about the sevenâ
Mr Scott : About the ones that were upheld. We did that, Senator. I am not aware what the link was back to the documentation that was used as a source, but I can check that on notice for you.
Senator ABETZ: If you could, because if you are relying on others for the misinformation then it is clearly within the public interest that those that were the purveyors of this misinformation be exposed as such. I assume that the ABC will be writing to them indicating that their evidence in the future will not necessarily be taken at face value.
Mr Scott : Some of this I think was an interpretation problem and some of it I think may have been a problem with data that we found. But we can track through that, Senator.
Senator ABETZ: Mr Scott, this was not an interpretation question. In the official statement, the ABC accepts that these inaccuracies were significantâ
Mr Scott : No, our interpretationâthat is not what I was saying, I am afraid.
Senator ABETZ: and apologises for these errors.
Mr Scott : I am saying that we went through thousands of data points. I think in one or two of these there may have been a question about how we interpreted the material that was on the record. I am not talking about how about interpretation as how we interpret the material on the record.
Senator ABETZ: Understood.
Mr Scott : In that case it may not be the record that needs to have been fixed but our interpretation. So as soon as we got these findings we did that. But I will come back and document the six for you.
Senator ABETZ: Yes, because we were told at Senate estimates last time that all of the assertions were independently verified. So there was not an issue of interpretation at stake. You were just gathering a whole lot of information and then regurgitating that out after it had been verified.
Mr Scott : We were presenting it, Senator.
Senator ABETZ: Now you admit that there might be ABC interpretation involved.
Mr Scott : No, what I am saying is that we took material that were in all of these different reports on the record everywhere and we pulled it together and put it into one place. The question is whether in fact we were precisely accurate around some of that material. That was all official material. I will go through on notice for you the detail of those errors.
Senator ABETZ: Just by the way, were any inaccuracies or contraventions made in support of coal seam gas? In all of the errors were madeâ
Mr Scott : No, that is a misinterpretation of the site. The site does not have a view on coal seam gas. It is attempting to put factually accurate information around the debate about it. These are not errors in favour or against; these are errors around a factual record. I am sorryâthat question does not apply to this. There is no point of view in this material.
Senator ABETZ: The ABC is always independentâeach and every time we are able to show you examples of bias after bias and yet you are completely oblivious to what so many people in the community say.
CHAIR: Senator, ask a questionâ
Senator ABETZ: Next question. You have a new building in Brisbane which was opened.
Senator Conroy: An excellent building.
Senator FISHER: If you are moving on, can I ask a question about that issue?
Senator ABETZ: Yes.
Senator ABETZ: It is a follow-up question on coal seam gas.
Senator FISHER: Mr Scott, does the ABC agree with Stuart Littlemore that you overstated the number of approved wells at 40,000?
Mr Scott : Yes, I think there was a distinction between approved wells and identified sites and that was an area that we corrected.
Senator FISHER: When it was printed wrongly, did you get that wrong figure approved by or checked with the officers from the various state departments that you indicate to Senator Abetz that you check things with and one or more of your independent experts?
Mr Scott : I will have to check on the precise process and the background to that one.
Senator FISHER: Did someone tick off on the mistake or did you just run with it anyway is what I am asking.
Mr Scott : No, the 40,000 figure was a government estimate based on information that had been supplied by the industry. But it was not a statement around 40,000 coal seam gas wells that had been approved. The precise breakdown of how that happened I would have to take on notice. I would not be able to answer that tonight. But that was an issue that we reviewed and acknowledged and corrected on the record.
Senator FISHER: You also agreed, didn't you, that your estimate of water consumption for coal seam gas production was perhaps up to four times more than the real figure?
Mr Scott : I do not have that material here, Senator; I would have to take thatâ
Senator FISHER: But you agree that was a mistake?
Mr Scott : I think that was another error that we corrected.
Senator FISHER: Did you consult each of the state departments named and one or more of the independent experts about that claim before publication?
Mr Scott : I will have to check that. We were using and interpreting official material that was on the record. But we can try and get more precise detail on it.
Senator FISHER: Finallyâthere are two questions around thisâis the coal seam gas trial your only data journalism project thus far?
Mr Scott : It is the only one we have done thus farâ
Senator FISHER: Thank you, that was my question. My next questionâ
CHAIR: Senator Fisherâ
Senator FISHER: That was the answerâthat was all I needed.
CHAIR: But just let Mr Scott finish his sentence.
Mr Scott : The idea of this is to take areas where there is a lot of material and put it up on the record. Part of this process is that, when further information comes to light, we can update it. This is the only one we have done so far.
Senator FISHER: Has the ABC nominated itself for the data journalism awards that are run by the London based Global Editors Network?
Mr Scott : There was an enormous amount of detail on the record about this, Senatorâ
Senator FISHER: Have you?
Mr Scott : I do not have the precise detail on that.
Senator FISHER: Have you nominated yourself?
Mr Scott : I will have to take that on notice.
Senator FISHER: So you do not know?
Mr Scott : Senator, there are hundreds of awards out thereâI do not have the detail.
CHAIR: Senator Fisher, Mr Scott said he would take it on notice.
Mr Scott : I will take it on notice, Senator.
Senator FISHER: Thank you. And, if so, who nominated you?
Mr Scott : I will take that on notice.
Senator ABETZ: Just on the building in Queensland that was recently opened, we were told by the new chairman a few weeks ago that this building was cleansed in a traditional smoking ceremony and bad spirits were expelled. Later on, he says, 'We are here today because of the cancer cluster that was identified at our former premises. In these circumstances the smoking ceremony could not have been more apt.' Why was an Aboriginal smoking ceremony struck upon to expel bad spirits from this new building?
Mr Scott : I was there for that event with our staff. On the day of the opening we had a welcome to country and acknowledged the traditional elders of the land. There is a strong connection with the Indigenous community with that part of Brisbane and the feeling I think of the staff up there was that it would be goodâI think it was an early day where all of the staff were at the opening thereâfor there to be a symbolic ceremony.
Senator ABETZ: This was a few weeks before the opening occurred.
Mr Scott : It was before the opening andâ
Senator ABETZ: No, it was a few weeks before. It was not on the same day.
Mr Scott : No, that is what I am saying to you. I was there for both. It was a few weeks before. It was a symbolic event that lasted 10 to 15 minutes before a morning tea. There were some local Indigenous members who came and what the Indigenous leader did was that he had brought some gum leaves with himâhe smoked them and he walked through.
Senator ABETZ: That is fineâI do not need a description of it.
Mr Scott : It was a lovely event, Senator.
Senator ABETZ: Why did we not ask for a Christian ceremony?
Mr Scott : I am a Christian and I can tell you I was not in the least bit offended.
Senator ABETZ: I am sorryâthat was not the question. I asked why wasn't a Christian ceremony thought of given that the vast majority of Australians identify as Christians and what is more even a greater percentage of Australian Aboriginals identify as Christian.
Mr Scott : I am not sure what the origin of the ceremony was. It was a brief ceremony. Our staff, who had been through a lot, valued it. It was a symbolic event with a local Indigenous leader. Nobody who was there—
Senator Conroy: I am sure if there are any more details Mr Scott could take that on notice and come back to you, Senator Abetz.
CHAIR: Mr Scott, I am glad you did not need an exorcism—that is all I can say.
Senator ABETZ: If they could actually get rid of some of the evil spirits within the ABC—
Senator Conroy: Come on, Senator. I will put on the record there that you were joking.
Senator ABETZ: Was any money paid for this? Can you take that on notice. Can I turn to the climate death threats reporting. The ABC so breathlessly reported that there were these death threats being made to climate scientists, only to find after an FOI with the Privacy Commissioner Timothy Pilgrim intervening that in fact no death threats were made. Did the ABC correct ABC News on 5 June and the Tony Jones Lateline program on 22 June 2011, where this was reported so breathlessly? Did these programs, when it was found to be false, come out and say 'What we reported on these previous occasions was in fact wrong'?
Mr Scott : I need to be brief on this for a couple of reasons. Firstly, I think that there is still some debate going on as to whether or not someone at ANU had said to us that there were threats. The reason I cannot go into detail about it—if you follow the chronology of this, of course the Australian has provided exhaustive coverage of this in the last week or so and the matter was pursued by Media Watch on Monday night—is that these broadcasts are subject to complaints and are currently under investigation by our independent Audience and Consumer Affairs division. I think it is inappropriate for me to provide further commentary on that until that investigation is complete.
Senator ABETZ: If it is being further investigated, we will leave it for another time. Once again, all this reporting always stacks up on one side of the ledger, doesn't it? Talking of that, let us turn to Insiders and our panel.
Senator Conroy: Senator Bernardi has already beaten you to the table.
Senator ABETZ: Given the leagues table that has been provided to the committee and—
Senator Conroy: You missed the earlier commentary, Senator Abetz.
Senator ABETZ: the ABC's pursuit of balance—
Senator Conroy: As far as Senator Cameron was concerned, there have been no left-wing commentators.
Senator ABETZ: Chair, I am sure you will be intervening to stop the interruptions.
CHAIR: Yes, order!
Senator ABETZ: Do you assess the people that go on the panel of Insiders on the basis of what their political persuasion is?
Senator Conroy: We had this discussion before. We have already canvassed it, Senator Abetz.
Mr Scott : I am happy to recanvass it.
Senator Conroy: It is tedious repetition.
Senator ABETZ: That is what the ABC does—tedious repetition of left-wing bias.
Senator Conroy: Senator Cameron insists he has not seen a left-wing—
CHAIR: Senator Abetz, I did indicate that I am waiting for the first left-winger to come on Insiders.
Senator ABETZ: David Marr is not a left-winger?
Senator Conroy: Not as far as Senator Cameron is concerned, and he is serious.
Mr Scott : Let me tell you how I view it. Take the example of Andrew Bolt, who has left us for the greener pastures of commercial television. Andrew Bolt, I think, is happy to be identified as a conservative columnist. When he appeared on the program they were the views that he regularly espoused. I suppose there are some on that list who you would say would be his counterpoint from the left.
Senator ABETZ: Like who?
Mr Scott : You mentioned David Marr. I am not sure how David Marr would interpret it himself. I am not sure how you would view Brian Toohey. I am not sure how you would see Piers Akerman.
Senator ABETZ: Can you think conservative rather than left-wing?
Senator Conroy: After Piers Akerman, everybody is a left-winger.
Senator ABETZ: That you are struggling to identify Piers Akerman as either conservative or left-wing just highlights the nonsense that you go on with.
CHAIR: Senator Abetz, settle down and let Mr Scott answer.
Senator Conroy: You have been having a bad week, so let us just relax.
CHAIR: I should indicate we have gone through this in great detail with Senator Bernardi. It is all on Hansard. But if you want we will go through it all again.
Senator ABETZ: Did he go through it today?
Senator Conroy: That is what we are saying.
Senator ABETZ: In that case it is fine and I will move on.
Mr Scott : I simply say that if you look down that list I think it is very hard to put a right or left label on very many people on that list.
Senator ABETZ: Oh, really?
Mr Scott : I do.
Senator Conroy: After Piers Akerman, everybody is a left-winger.
Senator ABETZ: Let us move on. Can you explain to me why with this greatly independent ABC we have the Treasurer, Wayne Swan, on Radio National Breakfast on 30 January 2012 uninterrupted in an interview and two days later, in an interview with the shadow Treasurer, Joe Hockey, there were five interruptions.
Senator Conroy: You are not serious.
Senator ABETZ: I am very serious. Then we go to the issue of whether universities ought to offer qualifications in alternative medicine. We have the person who is opposing the universities offering qualifications in alternative medicine and he is interrupted 10 times. The person advocating for offering qualifications in alternative medicine is interrupted nil times.
Senator Conroy: Don't you have anything serious to discuss?
Senator ABETZ: In relation to universities offering qualifications in alternative medicines, I happen to support that. But when the interviewers are able to show how much they favour one side or the other of an argument by the number of interruptions—ineffective interruptions—
Senator Conroy: That is just sad.
Senator ABETZ: Doesn't that cause you some concern?
Mr Scott : I have drawn on my experience here of you interrupting me tonight, Senator Abetz. You have interrupted me because at times you thought I was not answering the question that you had put. I think it is impossible, quite frankly, to do an analysis of interruptions until you actually go into this. It is not just a monologue. We do not just throw the microphone open and say we will come back in two minutes. We ask questions and we expect people to come to the answer. Sometimes—
Senator ABETZ: Which Mr Swan does all the time without the need for interruptions.
Mr Scott : I have seen analysis of other interviewers on other programs where the tally has been quite different.
Senator Conroy: The number of interruptions is a sad one, Eric.
Senator ABETZ: No, it is very true. We have James Delingpole who just wrote today, 'In Melbourne I had a run-in with a prickly ABC talk radio host.' That was in Melbourne. Then his reception at his local ABC branch was only marginally less frosty. Needless to say, the exorcism up there did not work.
Mr Scott : Can I make reference to that point, because I did read this article today. It struck me that there are a number of these international people, mainly climate change sceptics, who come and are interviewed on all our programs, and before they leave they drop a diary column to the Spectator and a piece in the Australian and leave. I am sorry that he did not feel that the robust questioning he got on the ABC was the kind of questioning he wanted. But he does present himself as contrary and running against conventional wisdom, and that is what you get.
Senator ABETZ: Then he talks about the treatment of Tim Flannery.
Mr Scott : I would say that in his final paragraph he describes the ABC, talking about the way we abuse 'the near monopolistic domination'—talking about us and the BBC—'of their country's broadcast media'. I thought that if he really has come to Australia and appeared on all these outlets and believes that the ABC has a near monopolistic domination of the country's broadcast media then quite frankly I do not think we need to hear much from him anymore, if that is the level of insight that he really has.
Senator ABETZ: Another independent view from the ABC. So tell us: how do we treat Tim Flannery?
CHAIR: Senator Abetz, let me just indicate that it will be your last question.
Mr Scott : We ask tough questions of Tim Flannery.
Senator ABETZ: Please, don't.
Mr Scott : We do. He was interviewed one-on-one on ABC News 24. We dealt extensively with concerns about statements he has made in the past. He was interviewed on Lateline about the Climategate hacking and asked to defend climate scientists generally against claims that they were overly alarmist and manipulating their results. On 14 May we specifically put questions about his public statements on climate change impact, and that was part of the seven o'clock news bulletin. Any suggestion that we do not articulate some of the criticisms of him that have existed and put tough questions to him in interviews is disproven by the record.
Senator ABETZ: I think most viewers of the ABC and its listeners see the treatment of Tim Flannery in complete contradistinction to that which is meted out to those that are climate sceptics. Does Mr Flannery get paid for his appearances for the ABC?
Mr Scott : He would certainly get paid for the television documentary series he has done with John Doyle, but through an independent production company.
Senator ABETZ: And if you were to have harsh interviews with him which discredit his reputation then of course the viewing audience for the documentaries that you pay for might in fact head south, mightn't they?
Mr Scott : I want to defend the integrity and independence of—
Senator ABETZ: It is in the ABC's interest to promote him.
Mr Scott : No, that is an insulting comment to the independence and integrity of our journalists. If you really think that—
Senator ABETZ: Oh, please.
Mr Scott : If you really think that Tony Jones or Chris Uhlmann or one of our news reporters here in the gallery has a brief from me to go easy on Tim Flannery because he is doing a documentary series—
Senator ABETZ: I have not said that at all.
Mr Scott : That is exactly the implication—
Senator ABETZ: No, that is a ridiculous straw man that you have deliberately set up to knock down.
Mr Scott : No, that is exactly what you said, Senator.
CHAIR: The record will determine this.
Mr Scott : You are asking about how he has been interviewed on our news programs and you are suggesting that somehow it is in the interests of the ABC to go easy on him in those interviews. The suggestion of that is that our journalists would go easy because it is in the interests of the ABC. I am putting to you that I think it is insulting to Mr Jones and Mr Uhlmann and other people who interview him to suggest that somehow there is a message that has come through from the ABC that they have abided by to go easy on the interviews, because that is exactly the—
Senator ABETZ: There is a group in the ABC that infects the overwhelming majority, and you would have to acknowledge that.
Mr Scott : I disagree with your view, Senator.
Senator ABETZ: Of course you do—you always have done. And you will undoubtedly continue to do so despite the evidence. Can I ask whether the ABC employees are able to put on their Twitter account their name and then ABC after it and then tweet—
Senator Conroy: We have had this.
Mr Scott : We have discussed Twitter at some length with Senator Bernardi.
Senator ABETZ: All right. In relation to Ms Corby's case—and this is one of the random emails that one gets—
Mr Scott : I have had some random emails.
Senator ABETZ: there is a cheque allegedly paid by the ABC to one William Moss. Are you able to—
Mr Scott : That I am not aware of.
Senator ABETZ: It says, I assume, $1,000. I do not even know whether it is a genuine article. Can you take that on notice. It is dated 12 April 2012.
Mr Scott : Certainly. We do not draw many cheques like that.
Senator ABETZ: But was a deed of release entered into with one Mr Moss?
Mr Scott : Sorry, I will have to take this on notice. There is a legal issue, so let me come back and look at that. It is a different matter.
Senator ABETZ: As I understand it, the settlement was for 'legal, court and administrative expenses' but I understand that Mr Moss was self-represented, so one wonders where the costs were that amounted to potentially $1,000 or more.
Mr Scott : There was a legal issue. Let me—
Senator ABETZ: All right, take that on notice. Can I quickly turn to the Bitcoin incident. Given that the intent was to use the computing power of visitors to an ABC website for personal gain, can you please advise if there were any public notifications on any ABC website about the potential impact of this code on visitors?
Mr Scott : We did discuss this, I think, with you and your office last year. This was detected within minutes, I understand, of it being put there. It was not correctly installed and at no time was there any ever any risk to any of the people who came through to our site.
Senator ABETZ: So did you display any news coverage about this incident?
Mr Scott : I am not sure. There was a blogging reference to it and something else. I am not sure whether we did news coverage.
Senator ABETZ: Can you take that on notice, please.
Mr Scott : Yes, I will.
Senator ABETZ: And let me know where it might be found on your website.
Mr Scott : Yes, if it is.
CHAIR: Mr Scott, on ABC radio and the FABC BMC Blue Mountains reception—
Mr Scott : Yes, indeed.
CHAIR: Friends of the ABC have raised with me problems with the FABC BMC. There are highly technical issues—
Mr Scott : Yes, there are transmission issues.
CHAIR: with this as well, which I must confess I am not across. But for the listeners in the Blue Mountains will there be any relief? Is there a technical fix or is there some other way that this can be fixed?
Mr Scott : I think we are working on it. I think we are discussing it with the ACMA as well. The geography of the Blue Mountains means that there are some dips and hollows that are difficult to reach. The Friends of the ABC have spoken with me about that too. That is a matter that I think we are identifying ourselves and seeing if there is anything we can do about it. Of course, ideally we do not want anyone in an area that is not an isolated or remote area at all not to be able to receive all of our signals, but it is a particularly difficult terrain and we continue to investigate that matter.
Senator SINGH: Mr Scott, I wanted to refer to the sale of goods and services that is in the budget papers. It is a line item there: sale of goods and services, $164,692,000. It has not changed over the last two years.
Mr Scott : That is our shops, really.
Senator SINGH: That is your shops? That was my next—
Mr Scott : Shops and ABC commercial books and CDs and DVDs and all that.
Senator SINGH: That is what I thought. So you stock some BBC merchandise as well as ABC—
Mr Scott : Increasingly with the mix in our stores it is merchandise that we are creating and developing ourselves.
Senator SINGH: When you sell BBC merchandise, do you ask some kind of commission or something?
Mr Scott : Absolutely. We do that under licence. It is a distribution deal we have with the BBC. We make money on that but we do not make as much money on selling other people's content as we do on content of her own.
Senator SINGH: What about the ABC selling its merchandise overseas?
Mr Scott : It depends on what the market is for it, of course. The history has not been particularly strong about the sale of overseas content, even though some is sold. We have an international sales division that looks to do that. But if you go to the UK you will find no BBC shops. The BBC do not have a chain of stores the way the ABC does. In fact there are people who came out from the UK up until a couple of years ago and thought it was easier to access the BBC archive here than it was in the UK, because they did not have that infrastructure.
Senator SINGH: What do you do with that revenue?
Mr Scott : That $160 million is not profit. That is just revenue. So the dividend that comes from ABC commercial, which is a fraction of that, is entirely invested in the ABC. A lot of it goes into content, really.
Senator BIRMINGHAM: In answer to my last question you confirmed, Mr Scott, that the news division would run a deficit this year. Are you able to project how much that is and, perhaps more importantly, whether the news division will have an increased budget in the next financial year?
Mr Scott : The budget for this year is yet to be finalised. We still have a period of time to run. We are still framing setting the budgets for next year. I think it is fair to say, and I said this to people in meetings today, that our entire focus is to try to reduce our expenditure on back-end, non-content areas to free up more money to inject into content. That is the budget review process I have under way now—to look at how we can make savings to give more to news and to our content divisions. That work is underway.
Senator BIRMINGHAM: Given that news has run a deficit this year, will it have a higher budget next year?
Mr Scott : Their budget figure will be higher next year.
Senator BIRMINGHAM: In real terms?
Mr Scott : We are still working all that through, but I am looking to try to find ways were we can inject more money into all of our content areas. That is our strategy. That is why we have done significant reviews of our IT, our technology infrastructure and our television production model—all of which helps us to save money that we can inject into more content.
CHAIR: Thanks, Mr Scott. That concludes the questioning of the ABC.