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Thursday, 26 November 2009
Page: 13260

Mr SECKER (3:14 PM) —Like the previous speaker, the member for Capricornia, I represent a pretty vast rural area—64,000 square kilometres. It is bigger than Tasmania and certainly relies very heavily on the services of the ABC. There is only one television station that covers all of my electorate, and that is the ABC, and it covers it well. Indeed, we have five national ABC radio stations: one that covers the Mount Gambier area, one that covers the upper south-east, one in the Riverland and one in the Barossa, and many parts of my electorate can get Adelaide’s 891. When I am driving around in my electorate—as I often am because, as I said, I have a vast rural seat—I have access to five different radio stations, and they are all ABC. That is what I listen to, and I am sure there are a lot of farmers on their tractors who do the same thing, along with many people who are travelling around the electorate who rely on the ABC radio stations for their daily needs.

SBS, although one of my colleagues said that it stands for ‘sex between soccer’, attracts a lot of demand in my area. In fact, quite a few other areas do not have access to SBS and want that access. There is more than a multicultural aspect to it. SBS has some amazing programs. I remember one about the American Civil War, which was an extraordinary program and almost made you feel as though you were there. SBS serves a great need in Australia. It was instituted by the Fraser government. I think the retiring member for Kooyong had a fair bit to do with ensuring that SBS became a reality. There is no way we would ever get rid of that sort of TV channel. Even though it has some advertising now, I think people have accepted that as part of the service.

I rise today to speak on the National Broadcasting Legislation Amendment Bill 2009. The legislation consists of a few key parts: the implementation of a supposedly new merit based appointment process to appoint directors to the ABC and SBS boards, the banning of former politicians from appointment to the ABC or SBS boards and staff elected directors. These are key issues for the coalition and for me. In October 2008 Labor announced that they would commence a new merit based selection process and seek to reinstate the staff elected director. This merit selection process is full of holes and allows Labor to fill all the vacancies with their own like-minded people. I am not sure how a staff elected director fulfils the criterion of a merit selection process. In fact, I have very grave doubts that it can.

Both the ABC and SBS have a significant and unique role in Australian broadcasting, and the coalition strongly supports our national broadcasters. As these organisations receive substantial taxpayer funding, it is imperative that they adopt the highest levels of corporate governance—and we are talking here about millions of dollars, of course. It is also important that they have in place appropriate governance structures. The first part of the legislation—the implementation of a new merit based board appointment process—will establish a nomination panel that is to conduct a selection process for each appointment of a director. Labor has pushed for a merit based selection process for the ABC and SBS and proposes the following:

The Nomination Panel comprises a chair and at least 2 and not more than 3 other members appointed by the Secretary of the Prime Minister’s Department for part time office for a period not exceeding 3 years.

The Nomination Panel must advertise any vacancy nationally, assess all applications against selection criteria set by the Minister and provide a report to the Minister or the Prime Minister and Minister—

I suggest that in the case of the present Prime Minister he would certainly be meddling in that—

in the case of the ABC chairperson, containing at least 3 nominations.

The Prime Minister must consult the Leader of the Opposition—

it does not say he has to pay any attention but ‘must consult’ the Leader of the Opposition—

before recommending the person to be appointed as ABC chairperson and if the person to be appointed as ABC chairperson is not nominated by the Nomination Panel, the Prime Minister must table the reasons for that appointment within 15 sitting days.

At the time Labor announced it would commence a new merit based selection process in October 2008 it called for public nominations for the positions of directors of the two boards and then created a nomination panel to assess the applications. In April 2009 Labor announced the appointment of two directors to the SBS board and two directors to the ABC board using the new merit based selection process. Senate estimates later confirmed that the government spent $200,000 on the selection process utilised to appoint the four new directors to the boards during this time, which works out at $50,000 per director. I am not sure that that is good value for taxpayers’ money. This amount included payment for the members of the nomination panel, advertising of the vacancies and the engagement of a recruitment firm. It is worth noting that the bill states that there is:

… no guarantee that the nomination process will produce a successful nomination and it is still within the Government’s power to make an appointment that is not a recommendation of the Nomination Panel …

So there is this easy way out for the Labor government. And they can do this ‘provided the selection process has been undertaken’. But, if Labor wants to appoint one of their own, they certainly can under these rules. It is certainly not a hard and fast rule that the nomination panel will come up with the directors. It still leaves it very much open to government manipulation. It is through the holes in legislation like this that Labor will slide in their own. The legislation is not actually required to facilitate the government’s nomination and appointment process either, as the government has already undertaken this process.

The coalition does not oppose the merit selection process but there does need to be consistency within the legislation. With this system they cannot rule out that the ABC and SBS boards will be stacked with Labor sympathisers. They are talking the talk but not necessarily giving us what they say they are going to do. The bill proposes that former state and federal politicians and senior political staff not be eligible for appointment to the boards of the SBS and the ABC. I can assure those here in the chamber that I have no intention of being a member of the ABC board or the SBS board. That is certainly not a career move I would ever be interested in. I want to get that straight from the outset.

Senator Conroy told Lateline Business on 5 December 2007 that the merit selection process was based around the Nolan principles in the UK. It would be good if the legislation was based on the Nolan principles in the UK, but of course it is full of holes. At the 2006 Senate inquiry into the composition of the ABC board and the coalition’s changes to remove the staff elected director of the ABC, departmental officials said:

If the argument to implement something like the Nolan rules relates to avoiding the appointment of board members who are too closely associated with a political party, a Nolan rules type process would not necessarily deal with that issue.

Indeed, if we are going to appoint staff representatives why don’t we elect a representative of the NFF, for example, to represent the rural needs of the ABC? I suspect that they would have a lot more merit than a staff elected representative. If this is the case then Labor’s perpetual ban on former political staff and members of parliament serving on the boards of the national broadcasters is really just a cheap stunt and is full of inconsistencies.

Former politicians have made a valuable contribution to the ABC board and other government bodies. Labor’s position on the value of former politicians serving on government boards is entirely inconsistent, as evidenced by Mr Rudd’s appointment of former Labor minister John Kerin to the CSIRO board and former Victorian Premier Steve Bracks as an adviser to the car industry. It is hypocritical for the government to claim that former politicians can provide valuable skills and experience to assist some boards but not the boards of the national broadcasters. They have failed to point out how these boards are different from any other arm of government.

Senator Conroy had no problems with former Labor staffer Jody Fassina being appointed to the board of Tas NBN Co. He also has no qualms about the $450,000 salary being paid to the disgraced former Queensland MP Mike Kaiser, who had to resign from parliament for stacking the electorate numbers in the hope of controlling things in Queensland. Mike Kaiser is doing government relations for a company with no customers—so who is he going to relate to?—and no income. But the company has plenty of expenditure, by the sound of it, because Mike Kaiser is getting $100,000 a year more than our Prime Minister.

Instead of offering a ‘cooling-off period’ for former staff and politicians—which we might have some sympathy for—Labor has placed a blanket ban on them ever being eligible for appointment to the board of a national broadcaster. This is a contradiction of the principle of an 18-month cooling-off period contained in the Rudd government’s ‘Standards of Ministerial Ethics’. Labor is inconsistent and has its own rules depending on the circumstances and what suits it at the time.

This legislation does not prevent current or former party officials or those with other political affiliations from being appointed to the boards. For instance, former Labor candidate David Hill served as both Chairman and Managing Director of the ABC and Michael Kroger also served as a director on the ABC board. These proposals do not restrict such appointments, which further serves to highlight how superficial the proposals are.

The coalition proposes that the bill should be amended to provide for an 18-month cooling-off period before former MPs and political staff can serve on the ABC board. I think that is a very sensible amendment that should be accepted by the government. Former politicians and their staff may have skills and experience applicable to the board. Indeed, former politicians, including Labor’s John Bannon, have made a valuable contribution to the board in the past.

Why is Labor so against former politicians serving on the boards of the ABC and SBS when they have appointed former politicians to other boards and positions? It is inconsistent and it is total hypocrisy. If they claim that having former politicians serving on the boards of the ABC and SBS equates to political interference, why are they so comfortable putting former MPs on other government boards? This is another example of Labor spin.

The second part of this bill relates to the position of staff elected director on the ABC board. The first staff elected position on the ABC board was introduced by the Whitlam government, without legislation, in 1975. This position was then abolished by the Fraser government, before the Hawke government enshrined the position in legislation in 1986. In 2006 the coalition amended the Australian Broadcasting Corporation Act 1983 to remove the position of staff elected director from the legislated composition of the ABC board to improve the corporate governance of the organisation. The decision to abolish the staff elected director was announced following the coalition government’s review of corporate governance of statutory authorities and office holders, conducted by Mr John Uhrig AC. The removal of the staff elected director was consistent with Uhrig’s recommendations about representative appointments. As I said earlier, if we are going to have a staff representative why not have a representative from the rural areas, a representative from the poorer areas, a representative from the richer areas, a representative from the female side and a representative from the male side? I mean, how far should we go with these appointments?

The Uhrig review concluded:

The review does not support representational appointments to governing boards as representational appointments can fail to produce independent and objective views. There is the potential for these appointments to be primarily concerned with the interests of those they represent—

if they are appointed by those whom they represent, of course they will wish to make sure that those feelings are expressed in the board—

rather than the success of the entity they are responsible for governing. While it is possible to manage conflicts of interest, the preferred position is to not create circumstances where they arise.

The position of staff elected director was seen as an anomaly amongst government agency boards. This is not the Liberal Party speaking; this is the Public Service. The other national broadcaster, the SBS, does not have a staff elected director. The coalition was also concerned about the potential conflict of interest of the staff elected director, who is legally required to act in the best interests of the ABC as director but is appointed as a representative of staff and elected by them. It is totally inconsistent yet again. The explanatory memorandum to the 2006 bill stated:

The Bill addresses an ongoing tension relating to the position of staff-elected Director. A potential conflict exists between the duties of the staff-elected Director under paragraph 23(1)(a) of the Commonwealth Authorities and Companies Act 1997 to act in good faith in the best interests of the ABC, and the appointment of that Director via election by ABC staff. The election method creates a risk that a staff-elected Director will be expected by the constituents who elect him or her to place the interests of staff ahead of the interests of the ABC as a whole where they are in conflict.

The Senate held an inquiry into the legislation to remove the staff elected director in 1996. In relation to conflicts of interest, in giving evidence to the Senate committee inquiry, officers from the department confirmed the view of Uhrig to the committee:

… while it is possible to manage conflicts of interest, the preferred position is not to create circumstances where they arise.

Professor Stephen Bartos, Director of the National Institute for Governance, made a submission to the inquiry that stated:

… the Uhrig Report is an accurate reflection of commonly accepted practice in Australian corporate governance. In this country we have applied a model of governance that does not favour representative appointments.


More broadly, staff-elected directors on a Board do represent an anomaly amongst Australian public and private sector boards in general governance terms …

At the time of the 2006 announcement, the then Chairman of the ABC, Mr Donald McDonald AO, stated that he had worked with three staff elected directors and:

Inevitably there has been a tension between the expectations placed by others on their role and their established duties as directors of a corporation.

In further evidence to the Senate committee inquiry, the department told the committee:

… the issue is not really about what may or may not have happened in relation to individual directors in the past. The issue is one of what is best practice corporate governance for the ABC, and Uhrig has recommended that there should not be positions like this on government boards.

The 2006 Senate committee concluded:

This Bill aligns the operations of the ABC Board with modern principles of corporate governance and accountability, as explained in the Uhrig Review. By abolishing the position of staff-elected Director, the Bill resolves the potential conflict of interest in being under a legal duty to act in good faith and in the best interests of the ABC, whilst at the same time being expected by those that have elected them (i.e. ABC staff) to primarily represent and act in their best interests.

Labor have given us no reason to believe that they are genuine about removing the apparent political interference on national broadcasting boards. The coalition remains opposed to the reinstatement of staff elected directors, in particular to the ABC board. If the coalition’s amendments to this bill are not successful we cannot support the bill. (Time expired)