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Monday, 22 November 2010
Page: 3218

Mr TURNBULL (5:34 PM) —Today I speak on the National Broadcasting Legislation Amendment Bill 2010 and the effects that this legislation will have on the public broadcasters in Australia. As my colleagues have stated in this House many times, the coalition strongly support Australia’s national broadcasters and recognise that the ABC and SBS play a very important role in the lives of all Australians. It is precisely because of the significance of these two great Australian institutions that the shortcomings of this bill need to be properly scrutinised.

Firstly, the bill seeks to implement a new merit based board appointment process to appoint directors to the ABC and SBS boards by amending the Australian Broadcasting Corporation Act 1983 and the Special Broadcasting Service Act 1991. The bill seeks to insert a provision in both the SBS and the ABC acts to enshrine the merit based selection process and require that appointments not occur unless that process has been undertaken. The only exceptions to this are on the advice of the Prime Minister in relation to the reappointment of an ABC chairperson and on the advice of the minister in relation to the reappointment of the chairperson of the SBS.

The merit based approach proposed by the government establishes a nomination panel, the purpose of which will be to conduct a selection process for each appointment of a director. This panel will comprise a chair and at least two, but not more than three, other members who have been appointed by the Secretary to the Department of the Prime Minister and Cabinet. The appointment will be for a period which does not exceed three years, and it is a part-time office. The nomination panel proposed is an unnecessary and overly bureaucratic process. In order to seek an appointment, the panel must first advertise any vacancy nationally, and it must assess all applications against the selection criteria set by the minister. In the case of the SBS chairperson, the panel must provide a report to the minister or, in the case of the ABC chairperson, provide a report to the Prime Minister and the minister which outlines at least three nominations.

In 2009, the government created a nomination panel to assess the applications for two directors to both the ABC and SBS boards. A Senate estimates inquiry found that the government spent approximately $200,000 on these appointments. Included in this was payment for the members of the nomination panel and the engagement of a recruitment company, as well as the cost of advertising. However, as the bill makes clear, there is no guarantee that this whole process will result in a successful nomination, and the government still retains the power to make an appointment that has not been recommended by the nomination panel, so long as the process is undertaken in the first place. This bill is simply creating a new and unnecessary bureaucratic process.

Secondly, the bill proposes that former politicians and their senior staff members are ineligible for appointment to the boards of the national broadcasters. This suggestion is very hypocritical on the part of the government. I applaud the recommendations of a recent report from the Senate Environment and Communications Legislation Committee which advised that this absurd double-standard be amended to provide that there is at least an 18-month cooling-off period—an entirely rational and practical response, given this is the case for the majority of other governmental advisory boards.

It is hypocritical for the government to argue that politicians are deemed unsuitable for positions on the boards of the national broadcasters while they are perfectly acceptable on the boards of other entities. Many former politicians have provided a valuable contribution to the board of the ABC and other government bodies. In 1994, for example, the former South Australian Labor Premier John Bannon was appointed by Labor to the board of the ABC, as was the former Liberal senator Neville Bonner in 1983. As my colleague the member for Dunkley pointed out last year, Prime Minister Rudd’s appointments of former Labor minister John Kerin to the CSIRO board, Peter Costello to the Future Fund board and Steve Bracks as an adviser to the car industry highlight the irrationality and inconsistency of the government’s position on this issue.

Members of this parliament and of state parliaments gain great experience in the affairs of this nation across a wide range of areas. When they cease to be members of parliament, they are in a position to continue to provide that experience to the community and, almost invariably, most of them do so. There is obviously an issue with public broadcasters about partisanship and so some cooling-off period may be appropriate, but to put a permanent stigma on every former member of parliament and every senior member of staff is really a very extreme response.

Further, the blanket ban on politicians serving on the boards of the national broadcasters does not serve to depoliticise these institutions as there is no reference in the legislation to prevent current or former party officials or others with political affiliations so serving. Former Labor staffer and lobbyist Jody Fassina was appointed as one of the four directors of the Tasmanian NBN Co. On this issue, there is obviously an opportunity for some compromise. On the one hand, the government is advocating independence and accountability by proposing a nomination process and ban on politicians and, on the other hand, the government can override this process by appointing their own directors. Why should the board of the national broadcasters be any different from the boards of other government agencies? Why has the government not considered a cooling-off period, as is the case with other government agencies? I urge the House to consider the recommendations put forward by the Senate committee on this issue.

Finally, the bill seeks to reinstate the staff elected director position on the ABC board. In 2006, following the advice of the Howard government’s Review of Corporate Governance of Statutory Authorities and Office Holders, the staff elected director position was abolished. This review, known after its chairman as the Uhrig review, found that having a staff elected director was an anomaly amongst other government agency boards as well as posing a significant potential for conflict of interest, as the director—who is legally required to act in the best interests of the ABC as a director—is, however, appointed as a representative of the staff. I note that our other national broadcaster, SBS, does not have a staff elected director.

The coalition stands by the Uhrig report that did not support representative 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, 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 not to create circumstances where they arise.

We have a tradition of corporate governance in Australia, as honourable members are well aware, that does not and should not favour representational appointments. The Uhrig review confirmed this stance.

It is a fundamental principle of company law in Australia that directors act in the interests of the company and all of its shareholders. So having a director who is a representative of one group is really trying to turn the board of directors into a quasi-shareholders meeting. The directors have to act in the interests of the entire corporation—in this case of the whole of the ABC. A staff appointed director is invariably going to be seen as effectively a shop steward at board level. There are obviously very powerful arguments for the interests of staff to be represented and for their point of view to be well argued, but they should not be represented in this way inside the boardroom.

In the ABC submission to the Senate inquiry into the 2006 legislation, the then acting Managing Director of the ABC, Murray Green, stated in relation to the conflict of interest for the staff elected director that it is:

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

The most recent evidence given to the Senate committee’s inquiry into this legislation found that staff elected board members would not necessarily perform badly. There is no question that you can have very capable people—and have had very capable people—elected as staff elected board members. So there is no criticism of the individuals involved or their calibre. But they will be subject to an ongoing conflict of interest and an ongoing tension in their role because the purpose of them being placed on the board is to represent not the interests of the whole company but the interests of the employees of the company.

The committee also heard that there is no need to have a member of the board representing staff interests, nor was there evidence that the ABC’s performance had suffered as a result of the absence of a staff elected director. In fact, since 2006, the ABC has really flourished with the launch of two additional television channels—the children’s channel, ABC3, and ABC News 24, Australia’s first free-to-air 24-hour news channel. The ABC has moved into digital radio, established the No. 1 rated online opinion site The Drum and launched the ABC Open project, which produces and publishes local contributions from ABC regional audiences. Recently the ABC has announced its intention to expand its international presence by consolidating the ABC’s presence in the Asia-Pacific and establishing new services in Africa, Latin America and the Middle East.

One only has to have regard to the ABC’s really formidable achievements—they are among the world’s best in my opinion—in the online space to see that its lack of a staff elected director has not held it back or compromised its activities at all. In fact, I would say that the ABC, in its range of activities, is more dynamic than it has probably ever been in its history. The government should recognise, therefore, that the reform of the ABC board carried out by the coalition has been in the best interests of the ABC. So far the government has ignored all arguments as to how the coalition’s reforms to the ABC have contributed to the broadcaster’s very successful transition into the modern media and digital environments while proving to be consistent with the contemporary standards of corporate governance.

Australia’s national broadcasters play a unique and essential role in the lives of all Australians. In order for them to have the best possible chance of continuing to provide Australians with their services, they need to have the best possible boards that can be provided. Allowing for the appointment of politicians and their staff to the boards after an 18-month cooling-off period is manifestly in the best interests of both our broadcasters and Australians. The 18-month cooling-off period is really more than sufficient—I would say quite a bit more than sufficient—to deal with any concerns about contemporary partisan considerations being brought to bear on the boards of those companies. We really do have to be very careful that we do not make it appear that because somebody has served in a parliament or in a senior advisory position to a member of the House of Representatives or a senator they are somehow or other regarded as stigmatised. The members of this House and the members of the Senate are engaged in public service, and it is very responsible and important public service. That service brings experience and, if members and senators having left the parliament want to continue to make a contribution to the nation, the provision of that service should be encouraged, not discouraged.

We also remain opposed to the staff elected director for the same reasons we were opposed to it when it was removed in 2006. Since then, on any view, the ABC has gone from strength to strength. It is impossible to point to any deficiencies or inadequacy on the part of the ABC occasioned by the absence of a staff elected director. There is a very important role for the staff of the ABC to be represented in their dealings with management but, as far as having a representative of the staff on the board of the ABC as a staff elected director, that is totally contrary to the traditions and principles of Australian corporate law. That is not the way companies are managed in Australia. As the Uhrig review demonstrated, it is manifestly not in the interests of the community to have public corporations with persons on their boards whose job it is to represent a particular sectional interest as opposed to the interests of the corporation as a whole.