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The ABC: an overview



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Parliament of Australia Departmentof Parliamentary Services

Contents

Introduction ....................................................................................................................................... 1

Public broadcasting ....................................................................................................................... 1

Establishing the Australian national broadcaster ................................................................................ 2

Charter and national identity ......................................................................................................... 3

Regulation .......................................................................................................................................... 4

Codes, classifications and complaints ............................................................................................ 4

Codes ....................................................................................................................................... 4

Box 1: one man's satire—another man's distress ...................................................................... 4

Classifications ........................................................................................................................... 5

Complaints ............................................................................................................................... 5

Editorial policies ................................................................................................................................. 5

Box 2: the ABC and political and election broadcasts ................................................................ 6

Management ...................................................................................................................................... 7

ABC Board ..................................................................................................................................... 7

Advisory Council ............................................................................................................................ 8

ABC divisions ................................................................................................................................. 8

Management controversies ......................................................................................................... 10

Staff-elected director .............................................................................................................. 10

Political appointments ............................................................................................................ 12

Services ............................................................................................................................................ 14

Radio ........................................................................................................................................... 14

BACKGROUND NOTE 20 April 2011

The ABC: an overview

Dr Rhonda Jolly Social Policy Section

Television .................................................................................................................................... 16

International ............................................................................................................................... 19

Online and mobile ....................................................................................................................... 20

Accusations of unfair competition .......................................................................................... 21

Box 3: online with Telstra ....................................................................................................... 23

ABC and bias .................................................................................................................................... 24

Box 4: Iraq: bias or balance? ................................................................................................... 28

Funding ............................................................................................................................................ 30

Commercial activities .................................................................................................................. 30

Funding dilemmas ....................................................................................................................... 31

Advertising: a budget solution? ................................................................................................... 35

Box 5: the SBS experience ....................................................................................................... 37

ABC revenue sources ........................................................................................................................ 41

Total revenue .............................................................................................................................. 41

Additional funding information ............................................................................................... 46

Transmission services ........................................................................................................ 46

Capital Use Charge............................................................................................................. 46

Consolidated Revenue ....................................................................................................... 47

Orchestral Subsidies .......................................................................................................... 47

Capital payments and equity injections .............................................................................. 47

Concluding comments ...................................................................................................................... 48

Appendix A: an assortment of public broadcasting models ............................................................... 49

United Kingdom........................................................................................................................... 49

United States ............................................................................................................................... 51

Canada ........................................................................................................................................ 53

New Zealand ............................................................................................................................... 56

Acknowledgements: The author is grateful for the constructive comments and suggestions made on a previous version of this paper by my colleagues, Dr Nicholas Horne and Dr John Gardiner-Garden.

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Introduction

Public broadcasting

The United Nations Educational, Scientific and Cultural Organisation (UNESCO) describes public service broadcasting as:

... broadcasting made, financed and controlled by the public, for the public. It is neither commercial nor state-owned, free from political interference and pressure from commercial forces. Through [public service broadcasting ], citizens are informed, educated and also entertained. When guaranteed with pluralism, programming diversity, editorial independence, appropriate funding, accountability and transparency, public service broadcasting can serve as a cornerstone of democracy.1

This description reflects the intention of the first Director General of the British Broadcasting Corporation (BBC), which is seen as the definitive public broadcaster, that the BBC would serve as the 'interrogator of democracy', creating a 'symbolic heartland of national life'.2

After the BBC was established in the mid 1920s:

Within the governance of national authorities, public service broadcasting was recreated across western European democracies and beyond in various forms. At the core of each was a commitment to operating radio and television services in the public good. The principal paradigm adopted to accomplish this mission was the establishment of a state-owned broadcasting system that either functioned as a monopoly or at least as the dominant broadcasting institution. Funding came in the form of license fees, taxes or similar noncommercial options.3

Since the 1980s, various challenges to this idea of public broadcasting have arisen. One academic observes in fact that public service broadcasting has been the focus of pessimistic forecasting over 25 years. Its demise has been predicted to occur for a number of reasons—the result of institutional 'withering from within' and commercial competition or ideological opposition from without'.4

Despite these predictions however, it appears public service broadcasters have survived 'the market liberal reforms of the late twentieth century', and like the subject of this paper, the Australian

1. United Nations Educational, Scientific and Cultural Organisation (UNESCO), definition of public service broadcasting, viewed 19 January 2011, http://portal.unesco.org/ci/en/ev.php-URL_ID=1525&URL_DO=DO_TOPIC&URL_SECTION=201.html

2. D Cardiff and P Scannell, 'Broadcasting and national unity' in J Curran, A Smith and P Wingate, eds, Impact and influences: essays on media power, Methuen, London, 1987, p 159. 3. R Avery, 'Public service broadcasting', Museum of Broadcast Communications, viewed 19 January 2011, http://www.museum.tv/archives/etv/P/htmlP/publicservicb/publicserviceb.htm 4. M Debrett, 'Reinventing public service television: from broadcasters to media content companies',

Communications, Civics, Industry—ANZCA Conference Proceedings, 2007, viewed 19 January 2011, http://www.latrobe.edu.au/ANZCA2007/proceedings/Debrett.pdf

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Broadcasting Corporation (ABC), they maintain considerable public support.5 Indeed, public service broadcasters have eagerly embraced social innovation concepts of the twenty first century and are in the process of transformation to public service media organisations, which embrace both broadcasting and user-created content functions.

The paper presents an overview of Australia's principal public broadcaster, the ABC, with reference to its origins, current composition and functions and its vision for a viable future within a changing media environment. The paper also makes reference to some of the controversies which have been integral to long-running discussion about the ABC—allegations of bias, political appointments to the broadcaster and the perennial question of funding adequacy.

Establishing the Australian national broadcaster

Broadcasting in Australia commenced in the 1920s under a two-class regulatory system devised by the federal government. This system involved category A licences, which were to be financed mainly by revenue collected from listener licences, and category B licences, whose source of revenue was unspecified, but who were allowed to solicit advertising.6 The idea behind this system was the attraction of sufficient capital to deliver competitive broadcasting and to avoid the establishment of a monopoly broadcasting environment.7

From the outset, Category A stations were expected 'to extend the facility of broadcasting to places outside the capital cities, especially to distant country listeners'.8 This desire reflected the general expectations of the period that radio would be able to bring social and economic benefits to the bush, to curtail a trend towards migration to the cities and act as an incentive for the migrant population to join the rural workforce. Further, there were expectations that these state-supported stations would not only provide entertainment, but that they would also 'be directed towards some sort of cultural "improvement" for the public generally'.9

When Category A stations experienced financial difficulties, partly as a result of these conditions, the Government decided to nationalise the stations. The National Broadcasting Service stations, as they were called, were run under contract by the Australian Broadcasting Company from July 1929 to the end of June 1932. According to a review of the Australian Broadcasting Corporation in 1981:

It was of course in character with the political impulses leading to the nationalisation of the 'A' stations that some of the costs of extending broadcasting services to uneconomic areas should be borne by the taxpayer rather than by listeners, and financed by the Government's overall loan-raisings of surpluses generated elsewhere. National broadcasting was following a pattern

5. Ibid.

6. Note: Category A licences were allowed to accept a small amount of advertising. 7. Committee of Review of the Australian Broadcasting Commission, The ABC in review: national broadcasting in the 1980s, Australian Government Publishing Service, (AGPS), Canberra, 1981, p. 56. 8. Ibid.

9. Ibid., pp. 57-58.

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well established in Australia since the 19th century in the provision of public utilities for our widely spread spaces, ranging from railways to water supplies.10

The Scullin Labor Government, elected in late 1929, decided not to renew the Australian Broadcasting Company's contract and intended to establish a public corporation to operate the national service. After Labor suffered defeat in January 1932, the United Australia Party Government proceeded to introduce similar legislation to establish the Australian Broadcasting Commission (ABC).11

On 1 July 1932, the ABC first commenced broadcasting to radio stations in all capital cities and to relay stations in some states. At that time, Prime Minister Joseph Lyons predicted the ABC would provide an important national service which would deliver information, entertainment and culture 'to serve all sections of the public and to satisfy diversified tastes'.12

Following the recommendations of a Royal Commission in the early 1950s, 'the ABC was allocated responsibility for delivering a national television service which, given Australia's geography and uneven spread of population was not a viable commercial venture'.13

ABC television began transmission twenty four years after its first radio broadcast. ABN Channel 2 Sydney, inaugurated by the Prime Minister, Robert Menzies, first broadcast on 5 November 1956. ABV Channel 2 Melbourne began broadcasting two weeks later to deliver coverage of the 1956 Melbourne Olympic Games.

The ABC is now an integral part of the radio, television and online production industries in Australia and a respected source of news and information media. In recent times, it has played an important role in digital broadcasting and the introduction of new media services.

Charter and national identity

Under its Charter, which can be found in section 6 of the Australian Broadcasting Corporation Act 1983 (the ABC Act), the ABC is required to provide innovative and comprehensive broadcasting services of a high standard across Australia. It is also required to transmit news, current affairs and entertainment programs outside Australia.14

The Charter directs that ABC services must reflect what is seen as the traditional role for a public broadcaster—to deliver policy objectives through the broadcast of programs that inform, educate

10. Ibid., p. 59.

11. The Australian Broadcasting Corporation Act 1983 changed the name of the organisation from the Australian Broadcasting Commission to the Australian Broadcasting Corporation. 12. K Inglis, This is the ABC; the Australian Broadcasting Commission 1932-1983, Black, Melbourne, 2006, p. 5. 13. M Debrett, Reinventing public service television for the digital future, Intellect, Bristol, 2010, p. 81. 14. The Charter of the Corporation, viewed 6 December 2010,

http://www.austlii.edu.au/au/legis/cth/consol_act/abca1983361/s6.html and the Australian Broadcasting Corporation Act 1983, viewed 6 December 2010, http://www.austlii.edu.au/au/legis/cth/consol_act/abca1983361/

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and entertain. It must also address market failure, in areas such as the delivery of local content. Further, its programming must contribute to national Australian identity and reflect cultural diversity. Its services and contribution are well valued by Australians as the quote below indicates:

The character of Australia 'owes much to the ABC; no other institution reaches as many Australians, or touches so many so profoundly. The national broadcaster not only helps fashion Australian life, it is also a deeply personal part of innumerable individual lives'.15

Regulation

Codes, classifications and complaints

Codes

A Code of Practice applies to material broadcast on ABC radio and television, as well as to content delivered online and to material seen or heard on emerging media services.16

The ABC distinguishes between four types of content to which a general underlying principle of appropriate context applies.17 So, while it is unacceptable under the ABC code to use language, sound or images simply to offend, it is acceptable to use such language or images for bona fide purposes. For example, content which disparages or discriminates on a number of grounds, including race, sex, age, disability or religious, cultural or political belief or activity is unacceptable. At the same time, this requirement is not intended to:

... prevent content which is factual or the expression of genuinely-held opinion, or content presented in the legitimate context of a humorous, satirical or dramatic work.18

Box 1: one man's satire—another man's distress

The question of what is meant by legitimate context in the ABC Code has at times been contentious, as the satirical Chaser team discovered in 2009 when it included a skit which appeared to represent sick children who receive their wishes from the Make a Wish Foundation as selfish and extravagant.

The skit's concluding words—'why go to any trouble when they're only going to die anyway'—were labelled as particularly distressing.

15. From The Sydney Morning Herald 30 June 2007 cited in The ABC in the digital age-towards 2020, viewed 6 December 2010, http://www.abc.net.au/corp/pubs/documents/2020_ABC_in_the_Digital_Age.pdf 16. Australian Broadcasting Corporation (ABC), ABC Code of Practice, updated July 2008, viewed 7 December 2010, http://www.abc.net.au/corp/pubs/documents/200806_codeofpractice-revised_2008.pdf 17. The four types of content are: news and current affairs, opinion, topical and factual and performance. 18. ABC Code of Practice, op. cit.

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Following considerable outcry, the ABC suspended the Chaser program for two weeks with a promise it would review its editorial processes.19 An internal review resulted in the 'removal' of the head of ABC comedy for an error of judgement in not consulting more widely before clearing the Chaser skit for broadcast.20

Classifications

The ABC applies the Office of Film and Literature Classification (OFLC), classifications made under the Classification (Publications, Films and Computer Games) Act 1995 to all domestic television programs with the exception of news, current affairs and sporting events.21

Complaints

Complaints that the ABC may have acted contrary to its Code of Practice can be made in writing to the ABC. The ABC is required to respond within 60 days of the receipt of a complaint except if the complaint is considered to be 'frivolous, vexatious or not made in good faith or the complainant is vexatious or not acting in good faith'.22 Anyone who is dissatisfied with an initial response about a complaint can request that the Corporation's Complaints Review Executive review the matter.

An Independent Complaints Review Panel (ICRP), appointed by the ABC Board, reviews written complaints which allege that certain ABC content may have contained serious factual inaccuracy or bias, lack of balance or unfair treatment. This type of complaint can only be made if the ABC's normal complaints procedures have not resolved a matter. If the Independent Complaints Review Panel does not accept the complaint for review or if a complainant is dissatisfied with the outcome of an Independent Complaints Review investigation and the complaint is covered by the ABC Code of Practice, the complaint may then be taken to the broadcasting industry regulator, the Australian Communications and Media Authority (ACMA).

Editorial policies

The ABC calculates that some form of editorial policy has been in place since at least 1949. Editorial policies are reviewed from time to time to reflect changes in technology and the overall media environment. The current ABC editorial policy was first published in March 2007 and has since been revised in July 2008 and March 2009.

19. 'Sick kid stunt earns Chaser 2-week ban', ABC News website, 5 June 2009, viewed 21 January 2011, http://www.abc.net.au/news/stories/2009/06/05/2591072.htm The skit, viewed 21 January 2011, can be seen at: http://www.youtube.com/watch?v=6DxNZcNDLro

20. ABC, Chaser review finding, media release, 10 June 2009, viewed 21 January 2011, http://www.abc.net.au/corp/pubs/media/s2598139.htm 21. Guidelines for the classification of films and computer games, viewed 7 December 2010, http://www.comlaw.gov.au/ComLaw/Legislation/LegislativeInstrumentCompilation1.nsf/0/F0EC030A108C93DDCA

2574120004F6B8/$file/FCGGuidelines2005.pdf 22. ABC Code of Practice, op. cit.

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ABC editorial policies require that it demonstrate impartiality as a creator, broadcaster and publisher of news and current affairs and topical and factual content. This means:

... while individual items of content can take a particular perspective on an issue, the ABC must be able to demonstrate at the platform level that it has provided its audiences with a range of different perspectives on the subject under consideration.23

Box 2: the ABC and political and election broadcasts

Political broadcasts

Section 79a of the ABC Act specifically empowers the Corporation to determine to what extent and in what manner political matter will be made available.

If the ABC broadcasts or publishes political matter for another person or for a political party, it must announce the name and address of the person and political party authorising the political matter on radio and announce and display in print on television the same information. The name of every speaker in the address or statement must be similarly announced on radio, announced and displayed on television or published on online.

Election broadcasts

The ABC notes that it has the sole discretion in revising its guidelines on election broadcasts, but in general, it grants or withholds free election broadcast time to political parties on the basis of the measure of demonstrated public support for those parties.

The Government and the official Opposition in an outgoing Federal or State Parliament or Territory Assembly are usually granted equal time by the ABC for election broadcasts within the relevant jurisdiction during election campaigns conducted for those parliaments or assemblies.

When political parties are in coalition, either as Government or as the official Opposition, the ABC provides an equal allocation of time to the Government and to the official Opposition. Parties in coalition divide the time between them as they see fit.

Other parties can be granted broadcast time subject to certain eligibility criteria, such as the number of seats contested, demonstrated public support and other factors deemed relevant by the ABC Board.

With reference to the guidelines for the 2011 New South Wales election, for example, the ABC has specified that it is subject to legal and other obligations which affect decisions about whether to approve material submitted by political parties for broadcast.

23. ABC, Editorial policies, March 2009, viewed 7 December 2010, http://www.abc.net.au/corp/pubs/documents/EdPols07_updateFeb09_FIN%20tools.pdf

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The guidelines state the ABC is obliged to ensure:

- it acts in accordance with principles of fairness and objectivity in election coverage

- the national broadcasting service is not used as a medium for personal attack

- the ABC does not broadcast material which, in the opinion of the ABC, is defamatory or otherwise unlawful, and

- the ABC does not broadcast election advertisements, as distinct from broadcasts of political matters.24

Management

In January 2011, the management of the ABC consists of the ABC Board, an Advisory Council, the Managing Director and the directors of the various divisions of the Corporation.

ABC Board

The ABC Board is expected to ensure that the functions of the Corporation are performed efficiently and to maintain the independence and integrity of the Corporation. The Board is also responsible for ensuring that the gathering and presentation of news and information is accurate and impartial, according to recognised standards of journalism and that the ABC complies with legislative and legal requirements.

Up to seven Directors of the ABC Board can be appointed by the Governor-General on the recommendation of the Government for a five year term. The Managing Director of the ABC is appointed by the Board. Directors must be experienced in broadcasting, communications or management, or have expertise in financial or technical matters or cultural or other interests relevant to the provision of broadcasting services.

Members of the ABC Board as at 1 January 2011:

• Maurice Newman AC—retired stockbroker and investment banker and Chair of the Board, (appointed 1 January 2007)

• Cheryl Bart—lawyer and company director, (appointed 3 June 2010)

• Peter Hurley—businessman, (appointed 14 June 2006)

• Michael Lynch—arts administrator, (appointed 27 March 2009)

• Steven Skala AO—lawyer and businessman, (re-appointed 24 November 2010)

24. ABC, Production guidelines for free broadcasts by political parties, New South Wales Election 2011, viewed 8 March 2011, http://www.abc.net.au/corp/pubs/documents/ProdGuidelines_NSWElection2011.pdf

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• Dr Julianne Schultz—academic, (appointed 27 March 2009)

• Keith Windschuttle—historian and journalist, (appointed 14 June 2006)

In addition, the Managing Director of the ABC, Mark Scott, sits on the ABC Board. Scott was employed in management positions with John Fairfax before being appointed on 5 July 2006 for a five year term. His term was extended from July 2011 for a further five years.

Advisory Council

The Advisory Council advises the ABC Board on matters relating to the Corporation's broadcasting programs. It is intended to provide a broad representation of Australian community concerns and interests in relation to programming and is expected to consult with the community on ABC programming and initiatives.

The ABC Board appoints the 12 members of the Advisory Council for a period of two years with a possible two year extension. Joan McKain, a former ABC employee, was appointed as convenor of the Advisory Council from 1 January 2011.

ABC divisions

As at the end of June 2010 there were 12 positions identified as 'Executive Leadership' director positions. There were also state and territory directors. The Executive leadership team reports to the Managing Director. The full divisional structure and incumbents are shown in the diagram below.

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ABC divisional structure

Source: ABC Annual Report25

25. ABC, Public broadcasting, public benefit: annual report 2009-10, viewed 13 December 2010, http://www.abc.net.au/corp/annual_reports/ar10/pdf/ar2009_10_complete_report.pdf

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Management controversies

Staff-elected director

In 1975, the Whitlam Government introduced a staff-elected position on the ABC Board. The position was not enshrined in legislation, however, and was abolished by the Fraser Government. An amendment to the ABC Act by the Hawke Government in 1986 re-established the position.26

The position was once again abolished, through legislation, in 2006 by the Howard Government which considered that it created 'uncertainty about accountability'.27 According to the Explanatory Memorandum to the 2006 legislation:

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 difficulties associated with such a position were recognised in the June 2003 'Review of the Corporate Governance of Statutory Authorities and Office Holders' (the Uhrig Review) at pages 98 and 99. That 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, rather than the success of the entity they are responsible for governing.'28

Staff elected representatives denied there was any uncertainty about accountability. Ramona Koval, staff representative in 2006, wrote to the online newsletter Crikey, that she was required to act in the best interests of the ABC:

... it's a serious responsibility that I have carried out with passionate commitment.

The position of staff-elected director is important to provide the Board with a working knowledge of the role and functions of a public broadcaster, and, at times, as a balance to the

26. Broadcasting and Television Legislation Amendment Act 1986, viewed 13 December 2010, http://www.austlii.edu.au/au/legis/cth/num_act/batlaa1986450/ 27. H Coonan (Minister for Communications, Information Technology and the Arts), Restructure of ABC Board, media release, 24 March 2006, viewed 13 December 2010,

http://www.minister.dbcde.gov.au/coonan/media/media_releases/restructure_of_abc_board 28. Explanatory Memorandum, Broadcasting and Television Legislation Amendment Bill 1986, p. 1.

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practice of party political stacking of the ABC board I have never breached confidentiality in this role. I have simply raised concerns about the potential for political interference.29

In 2009, the Rudd Government introduced a Bill which, amongst other things, intended to reinstate the position of staff-elected Board member.30 The Bill lapsed with the announcement of the 2010 election, but was reintroduced in September 2010.31 The Bill was referred to the Senate Environment and Communications Legislation Committee, which reported to the Parliament on 17 November 2010.

Arguments put to the Committee in favour of reinstating the staff-elected position stressed that staff-elected directors have protected the best interests of the ABC, particularly its independence.32 On the other hand, Donald McDonald, former Chair of the ABC Board, argued against reinstatement of the position on the basis that the Managing Director of the ABC is a member of the Board and 'capable of representing the interests of the staff'.33

The Senate Committee was convinced that the reinstatement of the position of staff-elected director was in the best interests of the ABC.34 The Committee presented its report to the Parliament on 17 November 2010, no amendments to the legislation were proposed and a third reading of the Bill was agreed to in the House of Representatives on 23 November 2010. The Bill was introduced into the Senate the following day, but in March 2011 it had yet to be passed by the Senate.

29. Crikey newsletter, no date given, in J Chowns, K Jackson and F Childs, Australian Broadcasting Corporation Amendment Bill 2006, Bills Digest no. 121, 2005-06, Parliamentary Library, Canberra, 2006, viewed 11 January 2011, http://www.aph.gov.au/library/pubs/bd/2005-06/06bd121.htm

30. National Broadcasting Legislation Amendment Bill 2009, Bills homepage, viewed 11 January 2011, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;adv=yes;orderBy=priority,title;query=Dataset%3Abi llsPrevParl%20Dataset_Phrase%3A%22billhome%22%20Decade%3A%222000s%22%20Year%3A%222009%22%20P ortfolio_Phrase%3A%22broadband,%20communications%20and%20the%20digital%20economy%22;rec=1;resCoun t=Default

31. National Broadcasting Legislation Amendment Bill 2010, Bills homepage, viewed 11 January 2011, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;adv=yes;orderBy=priority,title;page=0;query=Datas et_Phrase%3A%22billhome%22%20ParliamentNumber%3A%2243%22%20Decade%3A%222010s%22%20Portfolio_ Phrase%3A%22broadband,%20communications%20and%20the%20digital%20economy%22;rec=2;resCount=Defaul t

32. Q Dempster, private capacity, Proof Committee Hansard, 1 November 2010 in Senate Environment and Communications Legislation Committee, National Broadcasting Legislation Amendment Bill 2010 [Provisions], The Senate, Canberra, November 2010, pp. 6-9, viewed 11 January 2011, http://www.aph.gov.au/senate/committee/ec_ctte/nat_broadcasting/report/report.pdf

33. D McDonald, private capacity, Proof Committee Hansard, 1 November 2010, in Senate Environment and Communications Legislation Committee, National Broadcasting Legislation Amendment Bill 2010 [Provisions], op. cit.

34. The Committee accepted a suggestion by Donald McDonald that staff-elected directors could only stand for one five year term.

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Political appointments

The issue of the politicisation of the ABC Board has been contentious for some time. ABC historian Ken Inglis notes that the governments of Whitlam and Fraser 'had both replaced every commissioner appointed by the preceding regime, each giving the governing body a preponderance of people sympathetic to its own'.35

More recently, when Labor was in government in the early 1990s, it was accused of stacking the Board with trade union and party appointees. Indeed, Opposition communications spokesperson, Richard Alston, implied Labor's most controversial appointment, former Labor Premier of South Australia, John Bannon, was a government spy—'the eyes and ears of the minister'.36 Ken Inglis has argued in opposition, however, that Bannon was 'no ministerial spy'; he was so 'straight', according to Inglis, it was hard to believe he had ever been in politics.37

The Howard Government faced criticism that it too made a series of political appointments to the ABC Board. Katherine Murphy in the Age in 2006 commented:

John Howard has transformed the leadership of the national broadcaster in the past decade. There is now no one serving on the ABC board who has not been hand-picked by his cabinet.

Mr Howard's first step in changing the culture was to appoint his friend Donald McDonald as chairman in July 1996

...

Mr Howard also shook things up early with the appointment of Victorian Liberal powerbroker Michael Kroger, who parted ways with the board in 2003. Other government appointees to raise eyebrows were pro-labour-market-deregulation academic Judith Sloane, selected for the board in 1999, and former Liberal MP Ross McLean. The board now includes commercial QC John Gallagher, appointed in 1999; Dr Ron Brunton, a former fellow of the Institute of Public Affairs, appointed in 2003; and Janet Albrechtsen, conservative columnist appointed in 2005

Yesterday's two appointments, of hotelier Peter Hurley and controversial historian Keith Windschuttle, round out the trend.38

35. K Inglis, Whose ABC? The Australian Broadcasting Corporation 1983-2006, Black, Melbourne, p. 243. 36. Ibid., p. 305.

37. Ibid., p. 306.

38. K Murphy, 'Gaining influence. It's as easy as ABC', The Age, 16 June 2006, viewed 11 January 2011, http://www.theage.com.au/news/national/its-as-easy-as-abc/2006/06/15/1149964674521.html

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One view of the appointment of Janet Albrechtsen to the ABC Board:

Source: Friends of the ABC newsletter 39

One problem with political appointments which has been sometimes overlooked in the various outcries is that of a perceived lack of relevant expertise:

The current ABC is required to make decisions with long-term implications in a time of overwhelmingly rapid transformation of broadcasting technology. The Board's task may have been made more difficult by the fact that many of its members have little specialist knowledge of either the broadcasting industry or the new technologies. Without such expertise, it is inevitable that a part-time board will be essentially reactive to senior management suggestions and initiatives, and will have difficulty in setting a vision other than in the most general terms, for the future direction of the organisation.40

A Senate Committee inquiry grappled with this problem in 2001 and recommended the method of Board appointments was altered 'to embrace a system characterised by the principles of merit and transparency' to counter widespread public perception that appointments were made on the basis of political affiliation.41 In its response, the Howard Government believed there was no compelling

39. Friends of the ABC (NSW), Quarterly newsletter, vol. 15, no. 1, March 2005, viewed 24 January 2011, http://www.fabcnsw.org.au/Update/update_2005-6/update2005_03.pdf 40. Senate Select Committee on ABC Management and Operations, Our ABC, The Senate, Canberra, March 1995, p. 155. 41. Senate Environment, Communications, Information Technology and the Arts References Committee, Above board?

Methods of appointment to the ABC Board, The Senate, Canberra, September 2001, viewed 12 January 2011, http://www.aph.gov.au/senate/committee/ecita_ctte/completed_inquiries/1999-02/abcboard/report/report.pdf

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reason to alter existing selection processes and questioned the Senate's claim that there was a widespread public perception that Board appointments were politically based.42

Legislation currently before the Parliament attempts to address the issue of merit selection as raised by the Senate in 2001. The legislation provides that future assessment of candidates for ABC Board positions is to be made against a set of core selection criteria.43 It should be noted, however, that the legislation retains an option for the Minister to be involved in the selection process through the provision of additional selection criteria where necessary.44

Services

Radio

The ABC delivers radio broadcasting services over:

• Four national radio networks:

- Radio National: Radio National first began broadcasting on 2FC in Sydney in 1923 and broadcasts in other cities followed. Radio National features programs on science, literature and the arts, religion, social history, and current affairs.45 Radio National is broadcast on over 260 frequencies around Australia, the largest single network in the country. Podcasts of most Radio National programs are available. 46

- ABC Classic FM: Classic FM was established in 1976 as 'ABC-FM'. It was the ABC's first FM station. Classic FM broadcasts classical and contemporary music.47

- Triple J: Triple J began broadcasting as 2 Double J on 19 January 1975 in Sydney. The ABC's annual report for 1974-75 notes that establishing the station represented a major change for the broadcaster in seeking to attract listeners under 25 years, a group 'seldom' attracted to ABC programming.48 In August 1980, the station switched from broadcasting in AM to FM and

42. Government response to the Senate Environment, Communications, Information Technology and the Arts References Committee, Above board? Methods of appointment to the ABC Board, August 2002, viewed 12 January 2011, http://www.aph.gov.au/senate/committee/ecita_ctte/completed_inquiries/1999-02/abcboard/gov_response.pdf

43. Explanatory Memorandum, National Broadcasting Legislation Amendment Bill 2010, viewed 12 January 2011, http://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r4430_ems_15504724-d4fd-4c05-bb2a-eb82b3faddc9/upload_pdf/347333.pdf;fileType%3Dapplication%2Fpdf

44. Ibid.

45. The Radio National website, viewed 6 December 2010, http://www.abc.net.au/rn/ 46. Podcasting is a way to downloading audio or video files to a computer automatically. The files can then be played on the computer or transferred to an MP3 or video player. 47. The Classic FM website, viewed 6 December 2010, http://www.abc.net.au/classic/ 48. ABC, Annual report, 1974-75, p. 46. The first track played on Double J was the then-banned track by Australian

band, Skyhooks, You just like me 'cause I'm good in bed.

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was renamed 2JJJ (Triple J).49 From 1989, Triple J has expanded to become Australia's national youth broadcaster.

- ABC NewsRadio: this network was originally established to comply with requirements under the Parliamentary Proceedings Broadcasting Act 1946 for the ABC to broadcast proceedings of the Senate and the House of Representatives, including joint sittings.50 In 1994, ABC NewsRadio began broadcasting continuous news in the periods when Parliament was not sitting. The 24-hour news format includes finance, science and information technology reports, as well as extended reports from the local and international news sources and rebroadcasts of international programming from other public broadcasters, including the BBC.51

• ABC radio delivers local radio services through:

- nine metropolitan radio stations in capital cities and in Newcastle, New South Wales

- 51 regional radio stations throughout Australia.

• ABC radio delivers three digital music based services through Dig Music, Dig Jazz and Dig Country. These are available on digital radio, digital television and online. Dig Music can currently be heard in the five mainland capitals.52

• Some metropolitan and regional radio services as well as Radio National, Classic FM, Triple J and ABC NewsRadio are also available on free-to-air digital and subscription services.

• In July 2009, ABC Grandstand digital sports began broadcasting and as a result of the extra channel capacity afforded by digital radio, ABC Extra has been set up to present special events. These have included a 40th anniversary rebroadcast of the Apollo 11 moon landing.53

In 2009, the average weekly reach of ABC Radio in the five major mainland capital cities was 4.3 million. This figure grew by 8.1 per cent from the previous year.54

Statistics from Nielsen in the table below show the increase in ABC share of metropolitan radio since 2008:

49. FM broadcasting is frequency modulation broadcasting, which conveys information over a carrier wave by varying its frequency as opposed to AM or amplitude modulation, which combines radio carrier waves and electric waves so that the amplitude of the carrier waves varies to match the change in the electric waves) and the establishment of the community broadcasting sector. The Triple J website, viewed 6 December 2010, is at: http://www.abc.net.au/triplej/

50. Times for the broadcast of proceedings of the Parliament are determined by a parliamentary committee. Coverage of either the House of Representatives or the Senate takes priority over ABC NewsRadio's regular schedule. When Parliament is in session, ABC NewsRadio broadcasts its regular programs on the Internet.

51. ABC NewsRadio website, viewed 6 August 2010, http://www.abc.net.au/newsradio/default.htm 52. Internet sites for these stations, viewed 6 August 2010, are at: http://abcdigmusic.net.au/about and http://abcjazz.net.au/about and http://abccountry.net.au/about 53. ABC, Annual report 2009-10, op. cit. 54. From Nielsen radio surveys 2008-09 and 2009-10, in ABC, Annual report 2009-10, op. cit.

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Weekly reach of ABC radio—metropolitan figures—2008-09 and 2009-10

Source: ABC Annual report 2009-1055

According to the ABC, the majority of Australians describe the quality of programming on ABC Radio as 'good'.56

Television

• ABC television services are delivered through:

- ABC1: a free-to-air national television service. ABC 1 commenced transmission in 1956 as ABN Channel 2 from the ABC's Gore Hill studios in Sydney.57

- ABC2: a standard definition digital channel, which began broadcasting in March 2005.58 ABC2 broadcasts a range of new and repeat programming including children's programs, specific regional programs, documentaries and arts programs and international and regional news.

- ABC3: is a standard definition digital only channel. It is the ABC's children's channel aimed at young people from six to 15 years. ABC3 broadcasts daily from 6am to 9pm.

- ABC News 24: the broadcast of ABC1 in high definition digital was reallocated to the ABC's newest channel ABC News 24 in July 2010. The channel features high definition continuous news coverage. When it began broadcasting, ABC News 24 was criticised by Sky News Australia, the 24 hour subscription news channel owned in equal parts by Rupert Murdoch's BSkyB and the Seven and Nine Networks. ABC News 24 is streamed online and on the Apple iPhone.

55. ABC, Annual report 2009-10, op. cit. 56. Ibid.

57. Gore Hill was closed in 2002 and the ABC production centre transferred to Ultimo. ABC1 Home page, viewed 6 December 29010, http://www.abc.net.au/tv/abctv/ 58. ABC2 Home page, viewed 6 December 2010, http://www.abc.net.au/tv/abc2/

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• ABC iView: delivers television via computer, PS3 or Internet-connected television. 59

• Local television in each state and territory.

The ABC digital television service is also retransmitted on various digital subscription platforms, including FOXTEL, Optus TV, AUSTAR, TransACT and Neighbourhood Cable.

ABC1 is watched in metropolitan areas by approximately 8.1 million viewers and in rural areas by 3.7 million viewers every week.60 The table below shows the audience share for metropolitan areas for ABC free-to-air television in 2008-09 and 2009-10.

ABC 1 television audience share—metropolitan—2008-09 and 2009-10

Source: ABC Annual report 61

The table below shows the audience share for regional areas for ABC 1 television in 2008-09 and 2009-10.

59. PS3 is the abbreviation for PlayStation 3. 60. ABC, Annual report 2009-10, op. cit. 61. ABC Annual report 2009-10, op. cit. Note: source for this data from OzTAM and RegionalTAM Television Ratings. 2010 data (from 27 December 2009) is based on consolidated data.

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ABC free-to-air television audience share—regional—2008-09 and 2009-10

2009-10 2008-09

Source: ABC Annual report 62

ABC television is available via analogue signal to 98.29 per cent of the population (see table below). The analogue service is transmitted via 900 terrestrial transmitters around Australia, including Self-Help facilities, which are operated and maintained by local councils or community groups.

ABC services are available on digital television to 97.66 per cent of the population. The service is broadcast over 328 terrestrial transmitters. The ABC has been progressively rolling out digital television services which will eventually have equivalent coverage to that of analogue television services. See the table below for more detail.

Availability of ABC services

Source: ABC Annual report63

62. ABC Annual report 2009-10, op. cit. 63. ABC, Annual report 2009-10, op. cit.

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International

• Radio Australia is the ABC's international radio service (see diagram below). It is broadcast by shortwave, online, satellite and local rebroadcasts to the Asia-Pacific region in Indonesian, Tok Pisin (Pidgin), Chinese, Vietnamese, Burmese, Khmer (Cambodian) as well as French and English.

Aside from news and current affairs, English lessons, sport and music from Australia, Radio Australia's programs cover the events and issues of the region with a particular emphasis on health, the environment, science and technology, agriculture and education.64 In 2009, Radio Australia celebrated 70 years of broadcasting.

Radio Australia and Australia Network

Source: ABC Annual report 2008-0965

• Australia Network is Australia's international television and online service. It is currently available in an estimated 34 million homes in 44 countries across Asia, the Pacific and the Indian subcontinent. The ABC has operated this network since 2001 on a five yearly contract with the Department of Foreign Affairs and Trade. In 2010, the Gillard Government announced that the next operating contract for the Australia Network would be extended to ten years.66

64. Radio Australia website, viewed 6 August 2010, http://www.radioaustralia.net.au/ 65. ABC, Annual report 2008-09: redefining the town square, viewed 8 December 2010, http://www.abc.net.au/corp/annual_reports/ar09/pdf/ar2008_09_complete_report.pdf 66. The contract has been a source of some controversy. ABC Chief Executive, Mark Scott, has argued that the Australia

Network is a key instrument of soft diplomacy for Australia in the Pacific Region and that consequently, it should remain under the auspices of the ABC. M Scott, A global ABC: soft diplomacy and the world of international

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Online and mobile

ABC Online was officially launched on 14 August 1995 as a part of the ABC's Multimedia Unit. Online covers a large network of websites including those for ABC radio and television. ABC Online provides content through streaming, podcasting, vodcasting, SMS, video on demand and mobile phones.67

In 2009-10, the number of people using ABC Online increased significantly. ABC Online averaged 25 million visits each month, an increase of 21 per cent from 2008-09. ABC news and current affairs websites reached an average of 1.5 million users each month in 2009-10. Over 4 million visits were made each month to ABC news and current affairs websites, an increase of 19 per cent from 2008- 09.

In 2009, the ABC launched a mobile site to bring content including news, sport, entertainment stories, localised information and movie reviews and session times directly to mobile phones. The site delivers mobile content and services for a range of smart phones including iPhone and Blackberry devices.

In 2007, the ABC began participation in the online virtual world Second Life.68 This participation was seen as an opportunity for the Corporation to explore new ways of interacting with audiences and communities. ABC Island in Second Life is an Australian destination which gives visitors the opportunity 'to design, create and showcase objects, discover a hidden underground music club, listen to Indigenous stories, wander round an environmentally friendly eco house, experience ABC audio and video in a social environment and attend live screenings and concerts.'69

According to the latest annual report, the ABC is responding to the growth of social media by experimenting with accounts that represent personalities, programs, stations, networks, divisions,

broadcasting, Bruce Allen Memorial Lecture, 2009 viewed 8 December 2010, http://www.abc.net.au/corp/pubs/documents/Bruce%20Allen%20Lecture_91109.pdf Scott has argued also: 'We don't put our embassies out to tender, we don't put our defence force out to tender and other countries don't put their public broadcasting and their international broadcasting out to tender'. L Sinclair, 'Network "like an embassy"', The Australian, 16 August 2010, p. 29, viewed 8 December 2010, http://parlinfo/parlInfo/download/media/pressclp/29NX6/upload_binary/29nx60.pdf;fileType=application%2Fpdf# search=%22australia%20network%22 Rupert Murdoch's News Corporation, part owner of Sky television, which failed to gain the Australia Network contract in 2005, and others, have argued in contrast that the it should be a show case of the best of Australian media, not a vehicle to recycle ABC content. M Colless, 'Australia Network needs a new formula', The Australian 12 July 2010, p. 26, viewed 8 December 2010, http://parlinfo/parlInfo/download/media/pressclp/87AX6/upload_binary/87ax61.pdf;fileType=application%2Fpdf# search=%22australia%20network%22 67. Vodcast refers to the download of video files. The ABC has also developed the m.abc.net.au site which provides a

selection of ABC content that has been optimised for viewing on a mobile phone. The site can be viewed on any mobile phone which can connect to the Internet. 68. Second Life site, viewed 9 February 2011, http://secondlife.com/ 69. See information on ABC Island on Second Life, viewed 9 February 2011, at: http://www.abc.net.au/services/secondlife/default.htm

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genres and campaigns. It sees social media as a great opportunity 'to gain feedback, undertake research and build ongoing relationships with audiences'.70

In 2009-10 ABC Online achieved an average monthly reach in the active Australian Internet population of 23 per cent. This increased from 19 per cent in 2008-09. There were 42 million ABC podcasts and ten million vodcasts downloaded in 2009-10.

According to the Newspoll ABC Appreciation Survey 2010, Australians are happy with the quality of content on ABC Online; 90 per cent of those surveyed described it as very good or quite good.71

Accusations of unfair competition

The idea of public broadcasters offering new media services has been the subject of considerable debate world-wide. Commercial organisations in Europe have perceived any foray online by public broadcasters as endangering competition for private interests beset by the adverse effects of recent reductions in advertising revenues.72 In contrast, the European Broadcasting Union has remarked that public service broadcasting must be free to develop in the digital environment in order to benefit society.73

An independent review of the BBC online in 2004 (the Graf Review) found that there may be some justification for concern about certain public service broadcaster activities. On the one hand, the BBC committed to leading a transition to a fully digital Britain, and in so doing, to using the best of the new digital technologies to make its content more personal, more convenient and more relevant for all audiences.

Using the internet, mobile technology, broadband and interactivity, the BBC will be a pioneer and innovator, combining old and new media to offer a range of new services that can make a difference to people's lives—like access to the BBC's rich archives, new learning opportunities and fresh ways for people to participate and contribute as citizens. Our goal is to turn the BBC into an open cultural and creative resource for the nation.74

70. ABC, Annual report 2009-10, op. cit. 71. Ibid. and Newspoll, ABC appreciation survey: summary report, 2010, http://www.abc.net.au/corp/pubs/documents/Newspoll%20-%20ABC%20Appreciation%20Survey%20(June%202010).pdf

72. There has been considerable outcry in Europe, for example, from the European Publishers Council and the Association of Commercial Television (Europe). See European Publishers Council Contribution to the Draft Broadcasting Communication—Consultation 8th May 2009, http://www.epceurope.org/issues/epc-contribution-to-the-draft-broadcasting-communication-consultation-8-may-2009.pdf and the policy position on state aid and competition of the Association of Commercial Television, viewed 10 February 2011, http://www.acte.be/EPUB/easnet.dll/execreq/page?eas:dat_im=025B41&eas:template_im=025AE9

73. J Philippot, President of the European Broadcasting Union comment in 'State TV new media ventures under EU scrutiny', 3 July 2009, Euractiv.com, viewed 10 February 2011, http://www.euractiv.com/en/innovation/state-tv-new-media-ventures-eu-scrutiny/article-183726

74. BBC, Building public value: renewing the BBC for a digital world, 2004,viewed 10 February 2011, http://downloads.bbc.co.uk/aboutthebbc/policies/pdf/bpv.pdf

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On the other hand, the Graf Review questioned whether some of the broadcaster's activity was actually contributing to its stated aims. It concluded:

Some sites seem hard to justify in terms of the BBC's remit or wider public purposes. Sites—such as fantasy football, certain games sites, and the 'What's On' listings sites—do not seem [to the report's author], to be sufficiently distinctive from commercial alternatives or adequately associated with public service purposes, to be justified by the remit.75

As a result of the Graf Review, the BBC closed a number of websites identified as not being sufficiently distinctive from its commercial competitors. Following two further reviews, the BBC Trust concluded that the BBC needed to cut back on its online scale and scope and endorsed a 25 per cent budget cut to the BBC's online services.76

The ABC's online activity has not escaped this type of scrutiny. It too has been criticised for increasingly resorting to delivering the same fare as commercial media, and thereby interfering in the commercial marketplace. One report urged people to contemplate how the ABC was using taxpayer funds 'to soak up bandwidth, attract eyeballs away from niche media operators and poach writers on the government dime to the detriment of those trying to earn a buck setting up a new media business.'77

The conclusions of some have been similar to those reached in Europe—it is a waste of taxpayers' money to continue to fund public broadcasters to provide services which are already more effectively provided by the commercial sector. Eric Beecher, publisher of the online commentary site, Crikey for example, has criticised the ABC for establishing the online opinion site, The Drum. Beecher has likened the move to seeing 'tanks roll up' on commercial media territory.78

The opposing view of ABC online activity maintains that the Australian situation is different from Europe and the United Kingdom. While there may be justifiable criticism that the BBC and European public broadcasters have dominated their respective marketplaces, this has not been the case with the ABC. The ABC has always been expected to operate alongside commercial interests and to compete with them for audience share, and online is no different. Hence, in media analyst Margaret Simonds words:

75. Report of the Independent Review of BBC Online (the Graf Review), 2004, http://news.bbc.co.uk/nol/shared/bsp/hi/pdfs/05_07_04_graf.pdf 76. J Kiss, 'Trust endorses 25% budget cut to BBC online services', guardian.co.uk, 5 July 2010, viewed 10 February 2011, http://www.guardian.co.uk/media/2010/jul/05/bbc-trust-online-cuts 77. G Elliott, 'Eric Beecher is right to bag the ABC's Drum site. The Australian, 18 October 2010, p. 27,

http://parlinfo/parlInfo/download/media/pressclp/294681/upload_binary/294681.pdf;fileType=application%2Fpdf #search=%22eric%20beecher%20is%20right%20to%20bag%20the%20abc's%20drum%20site%22 78. L Sinclair, 'Crikey! Publisher Eric Beecher lashes the ABC', The Australian, 11 October 2010, p. 32, viewed 10 February 2011,

http://parlinfo/parlInfo/download/media/pressclp/276041/upload_binary/276041.pdf;fileType=application%2Fpdf #search=%22Crikey!%20Eric%20Beecher%20lashes%20the%20ABC%22

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... the ABC should be able to adopt any platform it wants and pay no heed to the commercial impact. While the role of a public broadcaster in the new media world is certainly up for discussion and redefinition, I have never been convinced by the notion that the ABC should abandon a platform or a form of media content merely because others are already there.79

Not surprisingly, the ABC's current Managing Director, Mark Scott, claims commercial interests are critical because they are 'threatened by the pace of change, the inflexibility of their own business models and their reluctance to invest'.80 Scott adds:

Sometimes we hear criticism that the ABC is expanding its services at the expense of commercial competitors. But the only expansion we're interested in is that which ensures the content the public has already invested in reaches its greatest possible audience. The motive is clear, to widen the impact of the content, making it freely available so that we deliver the best possible return.81

Box 3: online with Telstra

In August 1999, the ABC began negotiations with Telstra Corporation to enter into a contract to supply online content and co-operate in marketing and datacasting development.82 The proposed agreement involved payment of a basic fee of $13.5 million per year for five years, with an additional fee of at least $2.5 million (or a percentage of e commerce and advertising revenues received by Telstra on traffic which originates from a Telstra page containing ABC content, if greater).

The ABC already had online content deals in place with search engines Yahoo and Excite Australia, as well as AOL Australia, Cable and Wireless, Optus and Ninemsn.

The ABC saw the Telstra deal as:

79. M Simons, 'Why Beecher is wrong: Simons on the battle close to home', Crikey newsletter, 11 October 2010, viewed 10 February 2011, http://www.crikey.com.au/2010/10/11/why-beecher-is-wrong-simons-on-the-battle-close-to-home/

80. K Kissane, 'The ABC goes forth into a brave new world', theage.com.au, 13 March, 2010, viewed 10 February 2011, http://www.theage.com.au/national/the-abc-goes-forth-into-a-brave-new-world-20100312-q4g6.html 81. M Scott, Retaining relevance in the digital era, speech to Australia Council Marketing Summit, 2010, 15 June 2010, viewed 10 February 2011, http://www.abc.net.au/corp/pubs/documents/2929457.pdf 82. Datacasting delivers content in the form of text, data, speech, music or other sounds, visual images or in any other

form, or in any combination of forms, to persons having equipment appropriate for receiving that content. Datacasters are required to use the broadcasting services bands to transmit information and education programs, parliamentary and court proceedings, text and still images, interactive computer games and Internet-style services, including electronic mail. Datacasters are not able to broadcast a range of material including: programs that are considered to be equivalent to television news, drama, sports, music, weather, documentary, lifestyle or entertainment programs, or commercial radio programs. They are allowed to transmit extracts of television programs if these are no longer than ten minutes or put together to constitute a single program.

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... a great opportunity to make its online content available through a range of new outlets, while being paid a market-based licence fee. This additional income will enable the ABC to build and expand its content.83

Despite ABC assurances to the contrary, a Senate inquiry into ABC Online expressed concern that this agreement could affect editorial independence and integrity, as well as compromise the ABC Charter and editorial guidelines. Moreover, it may have raised issues relating to advertising and future directions of the Corporation in terms of viability and direction in a changing media environment.84

Similar views were expressed elsewhere and communications analyst Paul Budde added that the deal also reflected how much the ABC was willing to undersell itself and how desperate it was for revenue.85

Negotiations with Telstra were terminated in June 2000. According to the ABC this was due to the 'obligations' that would have been imposed by Telstra, the 'cost of servicing the deal and because it did not 'sufficiently recognise the value of the ABC's breadth of content'. 86

ABC and bias

The ABC has regularly been accused of presenting biased reporting. Many commentators have argued consistently that there is in fact a left wing bias which dominates ABC news and programming. From a similar perspective as other noted journalists, such as Gerard Henderson and Padraic (Paddy) McGuinness, Paul Gray maintains that the ABC is influenced by the 'narrow middle-class values of the Australian secular Left'. 87 In Gray's view therefore, while the national broadcaster

83. B Johns, 'National broadcaster rings the changes', The Australian 7 February 2000, viewed 24 January 2011, http://parlinfo/parlInfo/download/media/pressclp/2ZR06/upload_binary/2zr065.pdf;fileType=application%2Fpdf#s earch=%22abc%20online%20%20%20Telstra%22

84. Assurances made in First ABC submission to Senate Inquiry into ABC Online, 15 March 2000, viewed 24 January 2011, http://www.abc.net.au/corp/pubs/documents/onlinesub.pdf and Senate Environment, Communications, Information Technology and the Arts References Committee, Inquiry in to ABC On-line: interim report, April 2000, viewed 24 January 2011, http://www.aph.gov.au/Senate/committee/ecita_ctte/completed_inquiries/1999-02/abc/report/report.pdf

85. K Crawford, 'ABC deal "cash for no comment"', The Sydney Morning Herald, 8 February 2000, viewed 24 January 2011, http://parlinfo/parlInfo/download/media/pressclp/HXR06/upload_binary/hxr065.pdf;fileType=application%2Fpdf# search=%22abc%20online%20%20%20Telstra%22

86. ABC, Termination of negotiations with Telstra, media release, 9 June 2000, viewed 24 January 2011, http://www.abc.net.au/corp/pubs/media/s521630.htm Note: it is interesting that Dr Julianne Shultz, who was appointed to the ABC Board in 2009 was seen as one of the main architects of the Telstra deal.

87. P Gray, 'National broadcaster of the secular Left', The Australian, 10 October 2005, p. 8, viewed 25 January 2011, http://parlinfo/parlInfo/download/media/pressclp/DEJH6/upload_binary/dejh63.pdf;fileType%3Dapplication%2Fp df An example of the McGuinness and Henderson view of the ABC can be seen at: G Henderson, 'The ABC will pay for denying its leftist bent', The Age, 29 July 2003, p. 11, viewed 25 January 2011, http://parlinfo/parlInfo/download/media/pressclp/7EZ96/upload_binary/7ez963.pdf;fileType=application%2Fpdf# search=%22Gulf%20War%20%20ABC%20%20Hawke%22

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has at times offended governments of all persuasions, it has always been 'from the Left'.88 The more savage critics of the ABC, according to Gray, see the ABC's bias stemming from 'hatred of the Australian masses and their conservative values'.89 Gray is less savage, but equally convinced that the ABC must be persuaded:

... values which do not fit within a secular small-l liberal world view are indeed intellectually possible, and are in fact believed in by many of the members of the public whom they are paid to serve.90

Journalist Tom Switzer argues that ABC left wing bias is not deliberate, but he too considers it is entrenched and incestuous.91

A left-wing conspiracy is not necessary at the tax-payer funded behemoth, because (most) ABC journalists quite spontaneously think alike. They just can't imagine that someone could possible oppose the Kyoto protocol or an Aboriginal apology or a labour monopoly on the waterfront because, to them and their friends, these are self-evident truths. Nor can they imagine that someone could possible support a monarchy or Tasmanian timber workers or close Australian-US relations because, to them and their friends, these are unfashionable views to be ridiculed. It simply doesn't occur to them that sane or civilised people could disagree with them.

Switzer's complaint was not with the presentation of left-wing views on the public broadcaster, but with the fact that conservative opinions are rarely given equal exposure.

Political commentator Michael Warby is less generous in his assessment of inherent ABC bias. Warby argues the ABC adopts a 'noble righteousness' in relation to any criticism of its overall reporting style.92 He continues:

When Professor John Heningham, of Queensland University, surveyed journalists, he found they rated the 7.30 Report, the ABC News and Four Corners as the most pro-Labor media outlets... People from the 'rightwing' think tanks such as the IPA and the unavoidables, like Geoffrey Blainey, are allowed on periodically as … 'the guest enemy'. They are definitely not part of the ABC's normal service … Many of the defenders of the ABC are perfectly happy with this pattern. Progressivists see their views fully represented on the ABC. And, to the extent they notice the exclusion of classical liberal and conservative views, don't think it is a problem.93

88. Gray, 'National broadcaster of the secular Left', op. cit. 89. Ibid.

90. Ibid.

91. T Switzer, 'It's still their ABC', IPA Review, vol. 8, no. 4, December 2006, viewed 20 January 2011, http://parlinfo/parlInfo/download/library/jrnart/V1XL6/upload_binary/v1xl63.pdf;fileType=application%2Fpdf#sea rch=%22keating%20%20ABC%20bias%22

92. M Warby, 'No cure until the ABC admits there's a problem', The Canberra Times, 24 February, 2001, viewed 9 February 2011, http://parlinfo/parlInfo/download/media/pressclp/JJI36/upload_binary/jji3611.pdf;fileType=application%2Fpdf#se arch=%22no%20cure%20until%20the%20ABc%20admits%20there's%20a%20problem%22

93. Ibid.

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Supporters of the ABC deny claims that the broadcaster is either intentionally or inadvertently biased. The Friends of the ABC point out:

Accusations of bias continue to be made against the ABC, but they are most usually made in general terms, lacking specifics. While few would agree that bias is entirely in the eye of the beholder, it is difficult to measure, and difficult to get unanimous agreement about the whether or not a particular program was biased.

Most of the complaints about bias in the ABC have come from the government of the day - Labor or Liberal. Significantly both parties have been far less hostile to the ABC when in opposition. 94

Speaking from opposition, politicians have praised the ABC for its scrutiny of government. Labor's Daryl Melham noting in 2006:

When Labor was in government, the ABC rightly scrutinised the government. In many respects, it can be seen as the official opposition by the way it runs a number of programs that delve deeply into which direction a government is heading.95

As Box 4 and the cartoon below suggest, when in government the political propensity for political parties is more towards criticism of the ABC than praise; to paraphrase a comment from the Independent member for Calare, Peter Andren, in 2006, governments mistakenly label the ABC's critical debate and questioning of contentious policies as bias.96

In defending his former employer's credentials in 2002, journalist Tim Bowden observed:

Some say the Australian Labor Party is now to the right of the Liberal Party. If, as Michael Kroger said recently, the ABC is to the left of the Labor Party, doesn't that put the ABC smack bang in the middle where it ought to be?97

94. D Cassidy, 'ABC bias—verdict from the government appointed umpire', 2005 (updated 2010), Friends of the ABC, viewed 25 January 2011, http://friendsoftheabc.org/abc-issues-bias-funding-sponsorship/is-the-abc-biased/abc-bias-verdict-from-the-government-appointed

95. D Melham, 'Second reading speech: Australian Broadcasting Corporation Amendment Bill 2006', House of Representatives, Debates, 24 May 2006, p. 115. 96. P Andren, 'Second reading speech: Australian Broadcasting Corporation Amendment Bill 2006', House of Representatives, Debates, 25 May 2006, p. 40. 97. M Kingston, 'Surviving the ABC's survival', smh.com.au, 16 July 2002, viewed 20 January 2011,

http://www.smh.com.au/articles/2002/07/16/1026802689928.html

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A rare example of political agreement?

Source: Sydney Morning Herald98

98. Cartoon by O'Neill from A Ramsey, 'Always a pastime, Aunty bashing', The Sydney Morning Herald, 5 August 2006, p. 33, viewed 20 January 2011, http://parlinfo/parlInfo/download/media/pressclp/XPGK6/upload_binary/xpgk63.pdf;fileType%3Dapplication%2Fp df

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Box 4: Iraq: bias or balance?

Iraq: bias or balance?

Bias, it can be argued is in the eye of the beholder, as can be illustrated by the various views of the ABC's reporting of the first Iraq War in 1991 (also known as the Gulf War) and the second Iraq War which commenced in 2003.

The Gulf War and Hawke

Labor Prime Minister Bob Hawke claimed the ABC's war coverage of the first Gulf War in 1991 was biased. He complained that analysis presented principally by Dr Robert Springborg, an expert in Middle East studies, was loaded, biased and disgraceful.99

In academic Liz Jacka's view the problem was not the ABC, but the fact that that Springborg:

... gave what could be described as a more balanced and nuanced view of the events than was comfortable for the government, dealing as it was with some community dissent about the merits of Australian involvement, although the dissent about the first Gulf War was nothing like as outspoken as that for the second Gulf War. Springborg attempted to describe how the war might seem from the Iraqi or Arab side, setting the contemporary events against the backdrop of more than one hundred years of Western involvement in the Middle East. But too much understanding of the other side's perspective is seen as possibly treacherous and labelled as bias.100

Another media academic, Rodney Tiffen, suggested in this instance that rather than bias in reporting, ABC professionals had not been as sensitive as they could have been to the fact that the Government had for the first time 'committed citizens to potential death'.101

The ABC's Independent complaints Review Panel (ICRP) was established after the Gulf War of 1991 as a result of Prime Minister Hawke's dissatisfaction with ABC coverage.102

The Iraq War and Alston

In May 2003, the Coalition Government's Communications Minister, Richard Alston, made similar claims to those made by Labor in 1991. These were to the effect that the ABC was biased in its reporting of the second Gulf War—the Iraq War.

99. ABC, Lateline, 28 May 2003 and Inglis, Whose ABC? op. cit., pp. 228-9. 100. E Jacka, 'The elephant trap: bias, balance and government—ABC relations during the second Gulf War', Southern Review: Communication, Politics and Culture, vol. 37, no. 3, 2005, pp. 8-28. A difficult to decipher online version is at: http://www.fabc.org.au/vic/links/documents/details.php?art_id=78

101. Inglis, Whose ABC? op. cit., pp. 228-9. 102. Q Dempster, Death Struggle: how political malice and boardroom powerplays are killing the ABC, Allen and Unwin, Crows Nest, 2000, pp. 59-61, in Jacka, 'The elephant trap', op. cit.

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Minister Alston claimed that in its reporting of the Iraq War there were more than 60 instances where the ABC may not have upheld accepted journalistic standards. The Minister was particularly scathing about the radio current affairs program AM. He considered that AM's coverage of the war demonstrated 'at the very least a high degree of scepticism' towards the United States Administration, and 'at worst, a serious anti-American bias'.103

The ABC's Internal Complaints Review Executive concluded in July that the ABC had shown no bias in its reporting of the Iraq War, but Senator Alston was not satisfied with this finding. He continued to pursue the matter and a further investigation was convened.

In October, the ICRP upheld 17 of the Minister's complaints concluding that 12 of these involved serious bias by a reporter or presenter within an individual broadcast, four breached the directive to refrain from emotional language or editorialisation and in one case, sources were inadequately identified.104 Overall, however, the ICRP found that ABC coverage of the war was competent and balanced.

A further investigation by the Australian Broadcasting Authority (ABA) also found that the ABC had breached its code of conduct in six instances. At the same time, it agreed with the ICRP concluding:

... when considered as a whole, the [Iraq War ] broadcasts presented a wide range of perspectives including the principal relevant viewpoints on matters of importance, during the period in question. The ABA therefore finds that the ABC did not breach clause 4.2 of the code by failing to achieve balance.105

Interestingly, one report later pointed out:

Of more than 44,000 complaints lodged with the ABC in 2002-03, only 291 pertained to unbalanced coverage of the invasion of Iraq. These were split between 144 complaints of anti-US and 147 complaining the ABC was favouring the US.106

103. R Alston (Minister for Communications, Information Technology and the Arts), letter to R Balding, Managing Director, ABC, 28 May 2003, available on ABC Media Watch website, viewed 25 January 2011, http://www.abc.net.au/mediawatch/images/alston_to_balding_28may.gif

104. 'ABC bias finding spark fresh attack', The Canberra Times, 11 October 2003, p. 6, viewed 25 January 2011, http://parlinfo/parlInfo/download/media/pressclp/3MLA6/upload_binary/3mla64.pdf;fileType=application%2Fpdf #search=%22abc%20bias%20Iraq%22

105. Australian Broadcasting Authority (ABA), Investigation report no. 1362, 2003, viewed 2 February 2011, http://www.acma.gov.au/webwr/aba/newspubs/radio_tv/investigations/broadcast_operations/documents/radio/ 2005/1362.pdf

106. M Price, 'ABC bias did not rate with viewers', The Australian, 27 October 2003, p. 3, viewed 25 January 2011, http://parlinfo/parlInfo/download/media/pressclp/J5QA6/upload_binary/j5qa63.pdf;fileType=application%2Fpdf#s earch=%22abc%20bias%20Iraq%22

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Funding

The ABC is currently financed by the federal government primarily through triennial funding arrangements. These arrangements were only commenced in 1989, despite the Corporation arguing from 1949 that it needed 'to plan for three-year periods to accommodate the long project lead times of the technologically based broadcasting industry'.107 Specific measures have at times received funding in addition to that committed through the triennial process. Government funding is legislated through the annual Appropriation Bills Nos 1 and 2 for the use of the ABC. (More detail on this source of funding is provided in the revenue tables included later in this section).

The other main source of funding for the ABC is revenue from independent sources; that is principally, from commercial activities involving the sale of goods and services.

Commercial activities

ABC Commercial was established in 2007 to take over the activities of the former ABC Enterprises, which had been in operation since 1974. ABC Commercial supplements government funding for the Corporation, through funding from distribution and retail sales, as well as worldwide program sales.

ABC products are available through ABC Shops, ABC Centres, ABC Shop Online and other retail outlets including department stores, specialist retailers and direct marketers. ABC Retail owns and manages 43 ABC Shops and licenses 117 ABC Centres throughout Australia.

ABC commercial products include:

• ABC Books: publishes children's and adult titles in a wide range of subjects including ABC program-related books

• ABC DVD: provides popular ABC TV programs and programs from the BBC and independent producers

• ABC stages concerts and events for children and adults

• ABC Licensing manages a wide range of popular children's and adults' properties for global licensing

• ABC magazines

• ABC Music releases a children's, country and contemporary music by Australia's leading artists

• ABC classics releases recordings by the Australian symphony orchestras and classical music artists.

107. G Davis, Breaking up the ABC, Allen and Unwin, North Sydney, 1988, p. 60.

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In 2008-09, income from net profit from commercial enterprises was $18.8 million. In 2009-10, this figure was reduced to $13.8 million as a result of a number of factors, including weakening of the DVD market. 108

Funding dilemmas

The issue of the extent to which the ABC is funded by government has often been the subject of discussion. Many have claimed that governments have failed to grant the national broadcaster sufficient funds to enable it to fulfil its Charter obligations. Others have considered that the ABC receives too much support from government, particularly in an era of increasing media diversity.

When it was established there was some suggestion that the national broadcaster should be allowed to obtain additional revenue from the sponsorship of programs. But in a concession to the demands of newspaper proprietors and commercial radio owners, the Government decided that no station in receipt of 'subsidies from the public' would be allowed to accept any form of advertising.109 As ABC historian Ken Inglis observes, people later came to see this freedom from sponsored programs as part of the very nature of the ABC.110

Initially the ABC was self supporting, with its revenue 'outside direct government patronage' and derived from licence fees (as noted earlier in this paper).111 But licence fees proved to be an insufficient source of income, and in 1949, the Chifley Government established a system under which the ABC was funded by appropriations from consolidated revenue. Licensing fees were not, however, abolished until 1974.112

This change in funding source has resulted in what eminent media academic Henry Mayer described as early as 1980 as 'a permanent problem'.113 This is because it raised questions of, and called for decisions about how much money the ABC needs to fulfil its Charter obligations, and to what extent there is waste or inefficiency by the Corporation in the use of public funding.

Writing in 1988, academic Glyn Davis was of the opinion that the ABC had 'swung through several cycles of expansion and contraction since 1972; it 'prospered' under the Whitlam Government, but 'fared less well under Fraser'.114 The Hawke Government increased funding initially, but curbed its

108. ABC, Annual report, 2008-09, op. cit. and ABC, Annual report, 2009-10, op. cit. 109. Inglis, This is the ABC, op. cit., p. 19. 110. Ibid.

111. Davis, Breaking up the ABC, op. cit., p. 56. 112. Note: money from licence fees did not contribute to ABC finances following the passage of the Parliamentary Proceedings Broadcasting Act 1946. Licence fees were paid into Consolidated Revenue and the annual appropriation for the ABC bore no direct relationship to the amount of fees collected. Committee of the Review of

the Australian Broadcasting Commission, The ABC in review: national broadcasting in the 1980s, (the Dix Report) AGPS, Canberra, 1981, p. 487. 113. H Mayer, 'Media' in H Mayer and H Nelson, eds, Australian politics: a fifth reader, Longman Cheshire, 1980, p. 551. 114. Davis, Breaking up the ABC, op. cit., p. 5.

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financial largess later in its term, with Treasurer Paul Keating arguing that the Corporation was self-indulgent and self interested and that it would not get 'one more zac out of us'.115

With reference specifically to the Howard Government, journalist Shaun Carney argued in 2000:

... under the Fraser, Hawke and Keating governments budget cuts both real and threatened were used by incumbent ministers and prime ministers to put the screws on the ABC. With the [Howard] government, it is just a little more obvious ...To the government, the ABC is a plaything. Having attempted to tame it, the new direction seems to be to run it down at every opportunity, rhetorically and financially.116

ABC Board Chairs and Managing Directors, whether labelled as Labor or Liberal appointees, have often argued that the Corporation required more funding 'to perform its chartered tasks'.117 They have also conducted campaigns calculated to prevent cuts to the broadcaster's budget. Some of these have been more successful than others. Managing Director during the Hawke Government's term, David Hill, for example was responsible for the high profile 'eight cents a day' campaign to raise public awareness of the Corporation's financial difficulties.118 Ken Inglis surmises that Hill's efforts may have 'nudged cabinet towards generosity, or at least clemency' with regards to ABC funding.119

Some reports have indicated that the ABC performs well with lower levels of funding compared with other public broadcasters.120 But, at the same time, there are those who accuse the national broadcaster of wasting funding it receives. These critics usually call for 'tighter, tougher scrutiny' of the ways in which public funding is spent. 121

Other criticism which stems from calls for scrutiny relates to the quality of programming offered by the national broadcaster. In recent times, for example it has been said that the ABC's enthusiasm to compete in the new media environment has resulted in a steady decline in the intellectual content

115. Ibid.

116. S Carney, 'They just can't keep their hands off the ABC', The Age, 9 November 2000, viewed 7 January 2011, http://parlinfo/parlInfo/download/media/pressclp/5IT26/upload_binary/5it268.pdf;fileType%3Dapplication%2Fpdf 117. Inglis, Whose ABC? op. cit., p. 566. 118. The eight cents a day campaign claimed this was the cost to each Australian to fund the Corporation. The figure

was based on the 1997-98 budget appropriation—8 cents by 365 days a population of 17 million approximated the $430 million provided, Inglis, Whose ABC, op. cit., p. 160. 119. Inglis, Whose ABC, op. cit., p. 165. 120. An often cited example of this type of finding is the 1999 report by McKinsey & Company which calculated that the per capita cost of operating the ABC was equivalent to 10 cents (Australian) per day, considerably less than the 14 cents for the Canadian Broadcasting Corporation and well below 33 cents for the BBC, McKinsey & Company, Public service broadcasters around the world: report for the BBC 1999, cited in A Brown, 'Australian public broadcasting under review: the Mansfield report on the ABC', Canadian Journal of Communication, vol. 26, no. 1, 2001, viewed 9 February 2011, http://www.cjc-online.ca/index.php/journal/article/viewArticle/1198/1140 121. P Gray, 'Aunty's entertainments warrant tougher security', The Australian, 3 November 2005, p. 12, viewed 9 February 2011, http://parlinfo/parlInfo/download/media/pressclp/3ZSH6/upload_binary/3zsh610.pdf;fileType=application%2Fpdf #search=%22abc%20funding%22

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of programming and in the numbers of high quality, Australian-made dramas, documentaries and serious performance art programs arts.122 According to one critic:

You can still find [high quality programs], but they're fewer and further between than they should be especially given the current massive increased level of ABC funding.

What viewers want and deserve and should be getting for their ABC taxes is superior, content and a capital A in terms of national programming. There should be more dramatized novels, more serious discussion of books and science, and more edgy ABC-made versions of, The Wire and Mad Men. This—improving content quality and scope —is where the ABC should be spending the $137 million in extra funding it is getting from the Federal Government. 123

A further criticism is that the national broadcaster is using public funding to compete with commercial broadcasters. One representative of these interests has claimed that this is a highly questionable use, if not a misuse, of taxpayer funds'.124 Former ABC Board member and academic, Judith Sloan, agrees. She claims it is time to alter the charter of the ABC 'to narrow the focus of its operation and reduce the organisation's funding accordingly'.125

Submissions to the Rudd Government's discussion paper, ABC and SBS: towards a digital future continued to reflect aspects of this debate. The subscription television and radio industry representative organisation claimed the rise of the digital economy meant that there was less justification for funding public broadcasters to counter so called market failures in areas such as such as localism, children's programming and Australian programs. The industry considered the responsibilities of public broadcasting:

... should not be expanded to duplicate services that the market will create, generate and support on its own, without any necessary Government funding. Any proposals for funding to enable additional services or channels must be rigorously assessed and scrutinized and only considered where there is clear market failure. The national broadcasters are in a unique position to make core contributions to the community without generating any new replicated services already or likely to be provided by the market and which may create unintended anticompetitive consequences.126

The Media, Arts and Entertainment Alliance's view differed:

122. K Williams, 'The ABC's waste of money on nothing new or original', The Punch, 25 March 2010, viewed 8 February 2011, http://www.thepunch.com.au/articles/the-abcs-waste-of-money-on-nothing-new-or-original/ 123 Ibid.

124. M Hollands, 'ABC pursues news at a cost to local content', smh.com.au, January 27, 2010, viewed 8 February 2011, http://www.smh.com.au/opinion/politics/abc-pursues-news-at-a-cost-to-local-content-20100127-myiq.html 125. J Sloan, 'Aunty suddenly fills the air, and it's a real shame', The Australian, 2 October 2010, viewed 8 February 2011, http://parlinfo/parlInfo/download/media/pressclp/258538/upload_binary/258538.pdf;fileType=application%2Fpdf

#search=%22aunty%20suddenly%20fills%20the%20air%20and%20it's%20a%20real%20shame%22 126. Australian Subscription Television and Radio Association (ASTRA), ABC and SBS: towards a digital future: submission to DBCDE discussion paper, December 2008, viewed 7 January 2011,

http://www.dbcde.gov.au/__data/assets/pdf_file/0003/107427/main_submission_ASTRA.pdf

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Australia's national public broadcasters have struggled with insufficient funds for more than a decade in what has been a rapidly changing media landscape. The ABC operates three television networks, six radio networks and one of the largest suites of online services in Australia's media on an annual budget less than that available to any of the commercial free to air television broadcasters with whom it competes for audiences.127

Friends of the ABC (Victoria) also expressed a number of concerns about ABC funding. In the words of the Friends:

• The ABC does not have sufficient funding to adequately fulfil its charter responsibilities, produce quality content, and remain relevant in a technologically challenging and changing media environment.

• The ABC's efforts to earn income through commercial activities are undermining and diverting its focus from its raison d'être. The national public broadcaster has been built and paid for through taxes by three generations of Australians. It is not meant to be a business. The ABC was conceived as a service to the public— an independent institution of ideas, information, education and culture that enriches the nation and the lives of its citizens.

• While the need for the ABC has never been greater, so is the risk to its survival. It is not difficult to foresee what may happen in the future with any government antagonistic to independent public broadcasting, now that all major owners of commercial media in Australia own delivery platforms that compete with the ABC for audiences and have strong business interests in the ABC's demise.128

Following an interview in 2008 during which the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, maintained the ABC had been starved of funds for years, the Rudd Labor Government committed to increasing base funding for the Corporation. 129 Provision was made in forward estimates for funding of $698.7 million in 2009-10, $716.0 million in 2010-11 and $725.8 million in 2011-12. This amounted to $2.1 billion over the three year period. 130

The Rudd Government also provided an additional $150 million over three years from 2009 to enable the ABC to meet 'key priorities including the establishment of a digital children's channel and to increase the level of Australian drama content to match the requirements placed on commercial

127. Submission by Media, Entertainment and Arts Alliance to Department of Broadband, Communications and the Digital Economy regarding ABC and SBS: towards a digital future, December 2008, viewed 7 January 2011, http://www.dbcde.gov.au/__data/assets/pdf_file/0004/106555/main_submission_media_entertainment_arts_alli ance.pdf

128. Friends of the ABC (Vic), Submission ABC and SBS: towards a digital future, December 2008, viewed 7 January 2011, http://www.dbcde.gov.au/consultation_and_submissions/abc_sbs_review/_submissions/f/2679 129. P Hudson, 'ABC and SBS to get extra money', smh.com.au, 13 December 2008, viewed 7 January 2011, http://www.smh.com.au/news/national/sbs-and-abc-to-get-extra-money/2008/12/12/1228585118324.html 130. Australian Government , 'Part 2: expense measures', Budget measures: budget paper no. 2: 2009-10,

Commonwealth of Australia, Canberra 2009, viewed 7 January 2011, http://www.budget.gov.au/2009-10/content/bp2/html/bp2_expense-07.htm

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television broadcasters'.131 Funding under this initiative was for $28.5 million in 2009-10 (with an additional $14.1 million in capital funding; $0.5 million in of which was for the introduction of the digital children's television channel and the rest to assist the ABC to maintain its asset base). Funding of $42.4 million was allocated for 2010-11 and $65 million for 2011-12.132

Funding requirements from 2012-13 are to be determined in the usual context under the next triennial funding agreement for the ABC.133

Advertising: a budget solution?

As noted earlier in this paper, the issue of whether the ABC should accept advertising to boost its financial resources has been the subject of discussion since the 1920s. The discussion has intensified since the 1980s. The 1981 review of the national broadcaster by Alan Dix noting indeed that there was a worldwide trend emerging among governments to urge public broadcasters to look for 'outside' sources of funds.134 Dix recommended that section 31 the ABC Act which states specifically that the Corporation 'shall not broadcast advertisements' was changed to allow the Corporation to accept 'corporate underwriting' as well as to ratify arrangements involving co-production and co-financing in which the Corporation had begun to engage.135 In Dix's view, the integrity of the broadcaster could be ensured through provision in the legislation:

... for strict guidelines to safeguard editorial independence and program judgements, and confine underwriting activity to programs other than news, information and current affairs. Full details of receipts, their origins and the programs for which they [were to be used would] be recorded in the organisation's annual report to Parliament.136

Dix proposed that the ABC become more 'entrepreneurially minded'; that it overcome its distaste for the commercial; that it indulge in more effective exploitation of raising revenue through marketing. At the same time, he noted that this expansion into commercial activities should not be at the expense of quality programming. Moreover, Dix did not see these activities as more than providing greater flexibility for the funding of major and costly projects.137

131. Australian Government, 'Part 2: expense measures', Budget measures: budget paper no. 2: 2008-09, Commonwealth of Australia, Canberra, 2008, viewed 7 January 2011, http://www.budget.gov.au/2008-09/content/bp2/html/expense-04.htm

132. Ibid.

133. Ibid.

134. The Dix report, The ABC in review, vol. 1, op. cit., p. 14. 135. Ibid. p. 15. Underwriting usually involves acknowledgement that a program has been sponsored by identifying the sponsor through the mention of a legal or recognised names. Underwriting information is expected not to promote companies, products or services, nor is the sponsorship acknowledgment to interrupt the continuity of programs or

detract from the content or sound quality of programs. Note: Subsection (2) of section 31 allows the Corporation to broadcast announcements, 'if the Board thinks fit'. 136. Ibid.

137. Ibid.

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The ABC legislation was not changed to allow the underwriting of programming, and a 1997 report by Bob Mansfield stressed that Australians strongly opposed the introduction of advertising and/or sponsorship to finance the ABC.138

In recent times, the presence of the national broadcaster online rekindled the debate about advertising and commercialisation. A 2001 report by the Senate Environment, Communications, Information Technology and the Arts References Committee noted the concerns of some who believed that the advent of the online environment may encourage the national broadcaster to seek to circumvent the ABC Act by carrying advertising on services not defined as broadcasting services.139 The ABC's commercial arrangements with a number of companies to supply online content, a proposed deal for the same arrangements with Telstra (referred to earlier in this paper) and the statements of ABC management representatives appeared to confirm that there was a trend in this direction.140 However, the Committee did not recommend, nor did the Government deem it necessary to amend the ABC Act to prohibit the ABC from raising revenue through advertising on online services.141

The ABC is not alone in facing dilemmas over funding and in considering the option of advertising as a supplement to government funding. As noted in Appendix A to this paper, public service broadcasters in Canada and New Zealand accept advertising to supplement government funding and the United States accepts sponsorship underwriting of programming. Taking the advertising option has presented difficulties for each of these public broadcasters.

For the United States, the fact that underwriting is gradually becoming more like standard advertising is now seen as a threat to the ideals on which public broadcasting is founded. For the Canadian national broadcaster, the problem has been maintaining a realistic level of government funding in the face of calls for it to become more self-reliant.142 In the New Zealand case, while the original intention was to establish a public broadcaster in the image of the BBC, long term

138. B Mansfield, The challenge of a better ABC: volume 1: a review of the role and functions of the ABC, AGPS, Canberra, 1997, p. 5. 139. Senate Environment, Communications, Information Technology and the Arts References Committee, Inquiry into ABC On-line: final report, The Senate, Canberra, 2001, viewed 3 February 2011,

http://www.aph.gov.au/senate/committee/ecita_ctte/completed_inquiries/1999-02/abc/report2/report.pdf 140. For example, while no advertising was 'allowed around any content', Julianne Schultz, the ABC's corporate strategy manager, confirmed the Corporation 'allowed advertising around index sites' as cited by M Bishop, 'Reference to

the Environment, Communications, Information Technology and the Arts References Committee, Senate, Debates, 17 February 2000, p. 11977, viewed 8 February 2011, http://parlinfo/parlInfo/download/chamber/hansards/2000-02-17/toc_pdf/172-5267.pdf;fileType=application%2Fpdf#search=%22ABC%20online%22 141. Senate Environment, Communications, Information Technology and the Arts References Committee, Inquiry into ABC On-line: interim report, op. cit., Senate Environment, Communications, Information Technology and the Arts References Committee, Inquiry into ABC On-line: final report, op. cit., and Government response to the final report of the Senate Environment, Communications, Information Technology and the Arts References Committee Inquiry into ABC Online, viewed 8 February 2011, http://www.aph.gov.au/senate/committee/ecita_ctte/completed_inquiries/1999-02/abc/gov_response.pdf 142. 'Canadian Broadcasting Corporation', Cavenager.com 2008, quoted in T McCausland, 'The Canadian Broadcasting Corporation', Mapleleafweb, 1 June 2010, viewed 18 January 2011, http://www.mapleleafweb.com/features/canadian-broadcasting-corporation#operation

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restructuring based on economic, rather than public interest considerations has led to the virtual demise of public broadcasting. A generous assessment of New Zealand public broadcasting is in effect that it is a commercial entity which espouses vague social obligations.

Liberal parliamentarian Christopher Pyne argued in 2003 that the ABC needed to find supplementary sources of revenue, such as between-program advertising.143 Pyne rejected suggestions that advertising would lead to a 'dumbed down' national broadcaster; advertising would in fact create incentives for the national broadcaster to broaden its audience. Any concerns about the negative effects of advertising he considered had been thoroughly refuted by the experience of SBS:

Despite the presence of unobtrusive commercial advertising between its programs, no one could deny that SBS continues to provide a world-leading service.

Its commitment to screening fascinating documentaries and foreign language programs defies the critics who claim that advertising and intellectually stimulating programming are incompatible.144

Box 5: the SBS experience

The SBS experience

The Special Broadcasting Service (SBS) was established on 1 January 1978 as an independent statutory authority to administer ethnic broadcasting, which at that time consisted of two radio stations, 2EA Sydney and 3EA Melbourne. Enabling legislation (the Broadcasting and Television Amendment Act 1977) made no provision for advertising on the service. Prime Minister Malcolm Fraser decided in 1980 to extend multicultural broadcasting through the introduction of SBS television in 1980.

While there was no advertising initially on SBS television, success in gaining the rights to the World Football Cup in 1990 prompted it to seek commercial funding in association with the televising of that event. The further success of this venture, combined with ongoing funding problems led SBS television to lobby for the inclusion of a provision to allow advertising to be associated with all SBS programs except news and current affairs.

In contrast to the ABC Act, which specifically prohibits advertising, the Special Broadcasting Service Act 1991 (SBS Act), which established SBS television as a corporation, sanctioned the introduction of 'advertisements or sponsorship announcements'. Advertisements, however, were to be only those

143. C Pyne, 'Adequately funding the ABC requires that we look at advertising revenues', Online opinion, 19 August, 2003, viewed 2 February 2011, http://www.onlineopinion.com.au/view.asp?article=628 144. Ibid.

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'that run during periods before programs commence, after programs end or during natural program breaks'.145

Ien Ang and her colleagues, in a history of SBS, consider that Brian Johns, who was managing director of SBS when the SBS Act was passed, was the driving force behind the idea of including advertising on the multicultural broadcaster. Johns was convinced limited advertising of five minutes per hour would provide the broadcaster with much needed funding which it could then use to produce local content.146 According to Ang, the extra money it was able to acquire through advertising was indeed funnelled into high quality programs. This served to enhance the reputation of the broadcaster.147

In media analyst Emma Dawson's view, for 15 years, those in charge of SBS adhered to the spirit of the advertising clause in the SBS Act when it came to interpretation of what consisted of natural program breaks. Dawson argues that during this time, while the SBS Board and management were devoted to the principles of public broadcasting, they operated as a bulwark against further commercialisation. But this situation changed with the appointment by the Howard Government of managers who focussed on raising revenues through commercial operations.148

In June 2006, the SBS Board reinterpreted the concept of natural program breaks and approved the inclusion of in-programming advertising across the SBS schedule. Current SBS managing director, Shaun Brown, defended this broader interpretation of natural program breaks using a similar argument to that of Brain Johns had used previously-the SBS Charter requires the broadcaster to produce Australian content and funding needed to be found to achieve this end. 149

The introduction of in program advertising, particularly in news services, drew considerable criticism from SBS audiences.

This was seen as the worst example of commercialisation, tainting the news and its special role within public service broadcasting. By introducing a commercial element into the news, public trust and public interest were seen as threatened. Critics argued that the news was now vulnerable to ratings pressures and its editorial independence was in danger.150

Criticisms such as this have abated over time, but there are many who still consider the approach to advertising taken by SBS has served to undermine its unique position in Australian broadcasting.

145. Special Broadcasting Service Act 1991, viewed 11 February 2011, http://www.austlii.edu.au/au/legis/cth/consol_act/sbsa1991254/ 146. I Ang, G Hawkins and L Dabboussy, The SBS story: the challenge of cultural diversity, University of New South Wales Press, Sydney, 2008, p. 250. 147. Ibid.

148. E Dawson, 'Comment', The Sydney Morning Herald, 5 June 2006, p. 11, http://parlinfo/parlInfo/download/media/pressclp/30VJ6/upload_binary/30vj63.pdf;fileType%3Dapplication%2Fpd f

149. Ang et al, op. cit. pp. 250-51. 150. Ang et al, op. cit. p. 204.

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With regards to funding, journalist Errol Simper remarked in 2009 that it should only blame itself for its lack of support from government:

Primarily a niche, multicultural broadcaster, SBS wasn't established as a commercial channel and was never meant to evolve into one. SBS commercialised itself. Thus it can hardly claim immunity from the vagaries of the advertising market or from governmental perceptions arising from its commercial revenue stream.151

In 2009, and again in October 2010, the Australian Greens introduced legislation to prohibit in-program advertising, with the intention, according to Greens Senator Scott Ludlam, of putting the onus back on government to support the broadcaster.152

While in opposition Labor's communications spokesperson, Senator Stephen Conroy criticised the introduction of in-program advertising on SBS, but since achieving government, Labor has done little to reverse the situation. A series of questions from the Save Our SBS organisation prior to the 2010 election revealed it was Labor's intention not to disallow in-program advertising:

... as it would substantially reduce the amount of funding available to SBS to support the provision of high quality and diverse programming. In the current economic climate is not appropriate to require the SBS to change its approach to advertising.153

While Labor did improve funding for the broadcaster in the 2009 Budget, it remains that just over 20 per cent of SBS funding in recent times is from advertising.154 Recently appointed board member, Melbourne multiculturalist Hass Dellal is practical in his assessment of this situation:

Money's got to come from somewhere and I think SBS has managed to keep a good balance in terms of the number and kind of ads that it puts on. I've noticed they are even culturally appropriate in terms of representation - reflecting what Australia is today.155

Dellal echoes Brian Johns and Shaun Brown in his opinion that high quality programming has been the result of the move to in-program commercials.156

151. E Simper, 'SBS to blame for gruelling financial position it's in', The Australian, 9 March 2009, p. 36, viewed 11 February 2011, http://parlinfo/parlInfo/download/media/pressclp/WEZS6/upload_binary/wezs60.pdf;fileType=application%2Fpdf #search=%22sbs%20advertising%22

152. M Bodey, 'Greens bill to limit SBS ads', The Australian, 1 October 2010, p.6, viewed 14 February 2011, http://parlinfo/parlInfo/download/media/pressclp/254150/upload_binary/254150.pdf;fileType=application%2Fpdf #search=%22greens%20bill%20to%20limit%22

153. Save Our SBS, 'Labor SBS policy for the 2010 federal elections', viewed 14 February 2011, http://saveoursbs.org/wp-content/uploads/2010/07/Labor-SBS-Policy-for-the-2010-Federal-Elections.htm 154. This figure assessed from SBS reports. 155. F Farouque, 'In defence of SBS', smh.com.au, 5 August 2010, viewed 14 February 2011,

http://www.smh.com.au/entertainment/tv-and-radio/in-defence-of-sbs-20100804-11elk.html 156. Ibid.

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But for those opposed to advertising on public broadcasters, Shaun Brown's declaration—'ads are the result of Labor and Liberal governments refusing to fully fund SBS'—perhaps says it most forcefully.157 The consequence—increased commercialisation—has resulted in a public broadcaster which has intentionally shifted a significant amount of its focus from programming aimed at ethnic communities towards popular fare such as Top Gear and South Park in search of advertising dollars.158

It has been argued by some that some forms of promotion deemed unthinkable in the past are now a part of normal ABC operations and that a further embrace will benefit the corporation 'beyond comprehension':

... scratch the surface and you will discover the commercial-free ABC is up to its neck in marketing and advertising. Shopping centres are littered with ABC shops selling merchandise advertised on the ABC.

Toy shops are packed with toys based on shows that can be seen only on the ABC. Supermarkets are stocked with food bearing the images of those same characters.

The ABC is already a conduit for advertising. 159

Those opposed to accepting paid advertising on the national broadcaster consider it would 'gradually undermine the ABC's role, and eventually destroy the independence which is fundamental to its ethos'.160 Long time supporter of the ABC, journalist Errol Simper summarises this view:

The fundamental concept of BBC-style free-to-air public broadcasting is that it exists for the public, for the community, not as a marketing device. The moment marketing occurs, the 'public' part of the equation is violated. The idea of having the ABC accept $800 million a year of taxpayers' funds which it then—inevitably and however indirectly—uses to subsidise a corporate sales tool, is close to obscene. Such an operation would unfairly pick the pockets of networks Ten, Nine and Seven as well as those of subscription television and magazine publishers. It would cheat and short-change the general public and it would eventually erode and corrode everything admirable the ABC ever stood for.

157. R Neill, 'Identity crisis? Has SBS lost its way?' The Weekend Australian, 5 July 2008, p. 4, viewed 14 February 2011, http://parlinfo/parlInfo/download/media/pressclp/E4XQ6/upload_binary/e4xq60.pdf;fileType=application%2Fpdf# search=%22identity%20crisis?%20has%20SBs%20lost%20its%20way%22

158. In 2009, Channel Nine outbid SBS for the Top Gear, which moved to commercial television after five years on SBS. SBS Managing Director Shaun Brown commented: 'SBS, with its limited resources, lives with the knowledge that while it can discover and develop great programs and events, it cannot always defend them from the aggressive bids of well-heeled competitors', 'Top Gear changes gear', SBS World News, 23 October 2009, viewed 7 January 2011, http://www.sbs.com.au/news/article/1116936/Top-Gear-changes-gear

159. S Canning, 'If the BBC can, why not the ABC?' The Australian, 25 May 2006, p. 17, viewed 7 January 2011, http://parlinfo/parlInfo/download/media/pressclp/TTQJ6/upload_binary/ttqj62.pdf;fileType%3Dapplication%2Fpd f

160. L Tanner, 'Giving the ABC a commercial bent defies the reasons for its existence', Online opinion, 19 August 2003, viewed 8 February 2011, http://www.onlineopinion.com.au/view.asp?article=629

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41

Commercialisation, as has already been demonstrated, without subtlety, at SBS, would influence the type of material commissioned and broadcast. This is because the people who hold the whip hand in any commercial broadcasting entity aren't the audience, program-makers or even station executives. The whip hand is held by advertisers.

He who pays the piper must inevitably choose the tune. And the most melodious tune for the corporate world is that which attracts bulk audiences. Advertisers, unless they obtain some kind of niche-program discount, want their ads to be seen or heard by the largest possible number of people. Thus program schedulers start to feel the burden of ratings pressures.

161

ABC revenue sources

Tables 1 and 2 below provide information on ABC revenue, by source of funding, since 1970-71. Table 2 shows revenue adjusted to 2009-10 prices.162

The tables have been adjusted to take into account changes in funding allocated at various times for transmission services, capital use and the maintenance of ABC subsidiaries, as well as capital payments and equity injections (see explanation of these terms following the tables and in the additional funding section). This adjustment allows for a more accurate comparison of funding allocations over time.163

Total revenue

Table 1: ABC revenue: 1970-71 to 2009-10: actual dollars

Year

Total ABC revenue (AR)

ABC revenue from independent sources(b)

ABC revenue from the Australian Government (a) Total Australian Government revenue (c)

Operating revenue (d)

Capital revenue and equity injections (e)

$ m $ m % of AR $ m % of AR $ m % of AR $ m % of AR

2009-10 933.7 185.1 19.8 749.0 80.2 731.5 78.3 17.6 1.9

2008-09 948.7 265.3 28.0 683.4 72.0 683.4 72.0 - -

2007-08 903.5 224.2 24.8 679.3 75.2 666.5 73.8 12.8 1.4

2006-07 883.4 185.3 21.0 698.1 79.0 683.8 77.4 14.3 1.6

2005-06 910.6 243.8 26.8 666.8 73.2 666.8 73.2 - -

2004-05 906.9 253.6 28.0 653.3 72.0 647.5 71.4 5.8 0.6

2003-04 831.4 199.3 24.0 632.1 76.0 632.1 76.0 - -

161. E Simper, 'Corporate dollar spells end of public broadcasting', The Australian, 29 June 2006, p. 18, viewed 8 February 2011, http://parlinfo/parlInfo/download/media/pressclp/4R3K6/upload_binary/4r3k62.pdf;fileType=application%2Fpdf# search=%22corporate%20dollar%20spells%20end%20of%20public%20broadcasting%22

162. I am grateful to my colleague, Stephen Barber, for converting the figures in Tables 1 and 3 to reflect 2009-10 dollars as shown in Tables 2 and 4. 163. Some early information prepared for these tables was originally contained in a Parliamentary Library E brief by Dr Kim Jackson. I am grateful to Dr Jackson for this previous work.

The ABC: an overview

42

Year

Total ABC revenue (AR)

ABC revenue from independent sources(b)

ABC revenue from the Australian Government (a) Total Australian Government revenue (c)

Operating revenue (d)

Capital revenue and equity injections (e)

$ m $ m % of AR $ m % of AR $ m % of AR $ m % of AR

2002-03 835.1 185.9 22.3 650.1 77.8 606.9 72.7 43.3 5.2

2001-02 813.5 185.0 22.7 628.5 77.3 613.9 75.5 14.6 1.8

2000-01 722.5 152.9 21.2 569.6 78.8 528.3 73.1 41.3 5.7

1999-00 686.7 148.2 21.6 538.6 78.4 505.4 73.6 33.2 4.8

1998-99 659.4 152.1 23.1 507.2 76.9 498.6 75.6 8.6 1.3

1997-98 651.8 151.3 23.2 500.5 76.8 490.7 75.3 9.8 1.5

1996-97 675.2 144.0 21.3 531.2 78.7 521.5 77.2 9.7 1.4

1995-96 652.9 130.7 20.0 522.2 80.0 514.5 78.8 7.7 1.2

1994-95 638.1 123.0 19.3 515.1 80.7 507.8 79.6 7.3 1.1

1993-94 633.1 101.6 16.0 531.5 84.0 511.5 80.8 20.0 3.2

1992-93 598.2 90.1 15.1 508.1 84.9 493.5 82.5 14.6 2.4

1991-92 587.7 86.0 14.6 501.7 85.4 493.6 84.0 8.1 1.4

1990-91 584.8 71.3 12.2 513.5 87.8 497.4 85.1 16.2 2.8

1989-90 525.6 52.0 9.9 473.6 90.1 458.3 87.2 15.3 2.9

1988-89 511.5 61.5 12.0 450.0 88.0 429.3 83.9 20.7 4.0

1987-88 467.5 36.4 7.8 431.1 92.2 385.9 82.5 45.2 9.7

1986-87 455.2 29.6 6.5 425.6 93.5 372.5 81.8 53.1 11.7

1985-86 451.7 21.7 4.8 430.0 95.2 381.7 84.5 48.3 10.7

1984-85 364.1 17.1 4.7 347.0 95.3 319.5 87.8 27.5 7.6

1983-84 306.6 14.1 4.6 292.4 95.4 274.4 89.5 18.1 5.9

1982-83 273.6 12.8 4.7 260.8 95.3 246.4 90.1 14.4 5.3

1981-82 246.4 10.0 4.1 236.4 95.9 222.3 90.2 14.2 5.8

1980-81 194.1 10.0 5.2 184.1 94.8 171.2 88.2 12.9 6.6

1979-80 171.8 13.3 7.7 158.5 92.3 150.8 87.8 7.7 4.5

1978-79 158.0 11.9 7.5 146.0 92.4 139.0 88.0 7.1 4.5

1977-78 151.4 10.9 7.2 140.5 92.8 132.2 87.3 8.3 5.5

1976-77 148.2 9.1 6.1 139.0 93.8 126.2 85.2 12.8 8.6

1975-76 140.6 7.8 5.5 132.8 94.5 124.2 88.3 8.6 6.1

1974-75 129.3 7.0 5.4 122.3 94.6 108.3 83.8 14.0 10.8

1973-74 96.7 7.0 7.2 89.7 92.8 81.9 84.7 7.8 8.1

1972-73 74.4 4.3 5.8 70.1 94.2 66.2 89.0 3.9 5.2

1971-72 66.6 4.4 6.6 62.2 93.4 59.6 89.5 2.6 3.9

1970-71 59.2 3.8 6.4 55.4 93.6 52.9 89.4 2.5 4.2

Source: ABC Annual reports, ABC Financial Statements.

(a) Excludes revenues for transmission costs and capital use charge. Includes equity injections and orchestral subsidies. (b) Revenue from independent sources includes sales of goods, rendering of services, interest and disposal of assets. Prior to 2006-07 includes funding from state governments for orchestra subsidies. (c) Includes Commonwealth contribution to orchestras. (d) The ABC's operating revenue was presented in two formats—Consolidated and ABC—from 1994-95 until

2007-08. The Consolidated format encompassed the accounts of both the ABC and its controlled entities

The ABC: an overview

43

(companies owned by the Corporation), while the latter consisted only of operating revenue for the Corporation. Consolidated revenue has been used in this table as it more accurately reflects the scope and operation of the Corporation during the period in question. From 2007-08 revenue is not distinguished as either Consolidated or ABC. (e) The ABC's financial statements classified all Commonwealth appropriations as revenues from government

until 1999-2000, when a payment of $33.2 million was classified as an injection of equity and not included in total operating revenues. This payment and subsequent equity injections have been included in capital revenues to maintain consistency with previous years.

Table 2: ABC revenue: 1970-71 to 2009-10: adjusted to 2009-10 prices

Year ABC revenue

ABC revenue from independent sources

ABC revenue from the Australian Government (a)

Total Operating Capital

$ m $ m $ m $ m $ m

2009-10 933.7 185.1 749.0 731.5 17.6

2008-09 949.6 265.6 684.1 684.1 -

2007-08 947.1 235.0 712.1 698.6 13.4

2006-07 968.6 203.2 765.5 749.8 15.7

2005-06 1051.5 281.5 770.0 770.0 -

2004-05 1099.3 307.4 791.9 784.8 7.0

2003-04 1051.1 252.0 799.1 799.1 -

2002-03 1094.5 243.6 852.0 795.4 56.7

2001-02 1094.9 249.0 845.9 826.2 19.7

2000-01 996.6 210.9 785.7 728.7 57.0

1999-00 986.6 212.9 773.9 726.1 47.7

1998-99 969.7 223.7 745.9 733.2 12.6

1997-98 962.8 223.5 739.3 724.8 14.5

1996-97 1006.3 214.6 791.7 777.2 14.5

1995-96 989.2 198.0 791.2 779.5 11.7

1994-95 990.8 191.0 799.8 788.5 11.3

1993-94 1001.7 160.8 841.0 809.3 31.6

1992-93 955.6 143.9 811.7 788.3 23.3

1991-92 944.9 138.3 806.6 793.6 13.0

1990-91 955.6 116.5 839.1 812.7 26.5

1989-90 898.5 88.9 809.6 783.4 26.2

1988-89 933.4 112.2 821.2 783.4 37.8

1987-88 927.6 72.2 855.4 765.7 89.7

1986-87 960.3 62.4 897.9 785.9 112.0

1985-86 1024.3 49.2 975.1 865.5 109.5

1984-85 877.3 41.2 836.1 769.9 66.3

1983-84 776.2 35.7 740.3 694.7 45.8

1982-83 737.5 34.5 703.0 664.2 38.8

1981-82 739.9 30.0 709.9 667.6 42.6

1980-81 660.2 34.0 626.2 582.3 43.9

The ABC: an overview

44

Year ABC revenue

ABC revenue from independent sources

ABC revenue from the Australian Government (a)

Total Operating Capital

$ m $ m $ m $ m $ m

1979-80 645.9 50.0 595.9 566.9 28.9

1978-79 650.2 49.0 600.8 572.0 29.2

1977-78 658.3 47.4 610.9 574.8 36.1

1976-77 702.4 43.1 658.8 598.1 60.7

1975-76 747.9 41.5 706.4 660.6 45.7

1974-75 788.4 42.7 745.7 660.4 85.4

1973-74 721.6 52.2 669.4 611.2 58.2

1972-73 630.5 36.4 594.1 561.0 33.1

1971-72 594.6 39.3 555.4 532.1 23.2

1970-71 563.8 36.2 527.6 503.8 23.8

Source: ABC Annual Reports, Financial Statements. Figures have been adjusted to 2009-10 prices using the implicit price deflator for non-farm GDP.

(a) Excludes revenues for transmission costs and capital use charge; includes equity injections and orchestral subsidies.

Commonwealth funding

Tables 3 and 4 below present data identifying aspects of Commonwealth funding for the ABC since 1990-91. Table 4 presents these figures in constant 2009-10 prices.

Table 3: Commonwealth funding for the ABC: 1990-91 to 2009-10: actual dollars

Year

Operating revenue

Analogue and satellite transmission revenue

Digital radio and television transmission revenue (a)

Orchestral subsidies (b)

Capital and equity injections

All Australian Government funds (c)

$ m $ m $m $ m $ m $ m

2009-10 731.5 93.5 90.5 - 17.6 933.1

2008-09 683.4 90.7 84.4 - - 858.5

2007-08 666.6 87.3 80.1 - 12.8 846.8

2006-07 651.8 83.1 74.6 32.0 14.3 855.8

2005-06 625.0 80.2 69.1 41.8 - 816.1

2004-05 614.1 78.6 64.8 39.2 - 796.7

2003-04 591.4 77.2 57.8 40.4 - 766.8

2002-03 569.7 75.3 29.8 36.0 43.3 754.1

2001-02 548.5 73.4 29.4 36.0 14.6 701.9

2000-01 490.2 69.3 - 36.2 41.3 637.0

1999-00 472.4 68.4 - 33.0 33.2 607.0

1998-99 466.1 67.6 - 32.5 8.6 574.9

1997-98 458.7 54.2 - 32.0 9.8 554.7

1996-97 521.5 56.9 - - 9.7 588.1

The ABC: an overview

45

Year

Operating revenue

Analogue and satellite transmission revenue

Digital radio and television transmission revenue (a)

Orchestral subsidies (b)

Capital and equity injections

All Australian Government funds (c)

$ m $ m $m $ m $ m $ m

1995-96 517.0 75.5 - - 5.3 597.7

1994-95 507.8 72.5 - - 7.3 587.6

1993-94 524.0 70.7 - - 7.5 602.2

1992-93 498.9 67.6 - - 9.2 575.7

1991-92 493.6 67.6 - - 8.1 569.3

1990-91 497.4 64.6 - - 16.2 578.1

Source: ABC Annual Reports, Financial Statements, Budget Statements.

(a) Digital radio transmission is included in this figure from 2009-10 (b) Orchestral subsidies were included in the ABC's operating revenue until 1996-97. Orchestral subsidies ceased from 2006-07 after the orchestral companies were divested from the ABC. Orchestral subsidies figure does not include revenue from other sources, such as sale of goods and services.

(c) Does not include funds for capital use charges during the period these were imposed or loans from the Commonwealth.

Table 4: Commonwealth funding for the ABC: 1990-91 to 2006-07: adjusted to 2009-10 prices

Year

Operating revenue Transmission revenue

Digital television services Orchestral

subsidies

Capital and equity injections

All Common-wealth funds (a)

$ m $ m $m $ m $ m $ m

2009-10 731.5 93.5 90.5 - 17.6 933.1

2008-09 684.1 90.8 84.5 - - 859.4

2007-08 698.7 91.5 84.0 - 13.4 887.6

2006-07 714.7 91.1 81.8 35.1 15.7 938.4

2005-06 721.7 92.6 79.8 48.3 - 942.4

2004-05 744.4 95.3 78.5 47.5 - 965.7

2003-04 747.7 97.6 73.1 51.1 - 969.4

2002-03 746.7 98.7 39.1 47.2 56.7 988.3

2001-02 738.2 98.8 39.6 48.5 19.7 944.7

2000-01 676.1 95.6 - 49.9 57.0 878.6

1999-00 678.7 98.3 - 47.4 47.7 872.1

1998-99 685.4 99.4 - 47.8 12.6 845.4

1997-98 677.5 80.1 - 47.3 14.5 819.4

1996-97 777.2 84.8 - - 14.5 876.5

1995-96 783.3 114.4 - - 8.0 905.6

1994-95 788.5 112.6 - - 11.3 912.4

1993-94 829.1 111.9 - - 11.9 952.8

1992-93 797.0 108.0 - - 14.7 919.6

1991-92 793.6 108.7 - - 13.0 915.3

1990-91 812.7 105.6 - - 26.5 944.6

The ABC: an overview

46

Source: ABC Annual Reports, Financial Statements. Figures have been adjusted to 2009-10 prices using the implicit price deflator for non-farm GDP.

(a) Does not include funds for the capital use charge or loans from the Commonwealth. Orchestral subsidies were included in the ABC's operating revenue for 1996-97 and earlier years.

Additional funding information

Transmission services

Prior to 1992, ABC services were transmitted by Telecom and the Department of Transport and Communications. From 1992 to 1999, transmission services were provided by the National Transmission Agency (NTA), until that agency was privatised in April 1999. In 1999-2000 the ABC received an appropriation to purchase transmission services from NTL Australia Pty Ltd (the purchasers of the NTA network). Similar appropriations have been made in subsequent years.

The cost of the ABC's transmission services was identified as resources provided free of charge in the ABC's Financial Statements from 1990-91 to 1998-99. It is not recorded in earlier reports. The cost of ABC transmission services has not been included in Tables 1 and 2 in order to obtain comparable trend data for the years before 1990.

The 2009-10 Budget identified future savings in transmission costs over two years from 2010-11 which are to be gained from the progressive cessation of the requirement for the ABC to simulcast analogue television as various regions convert to digital only transmission. Savings have been estimated at $1.2 million in 2010-11 and $10.3 million in 2011-12.164

The Government has indicated its intention to save further monies on transmission through more efficient use of distribution and transmission services by the ABC and the Special Broadcasting Service (SBS).165

Capital Use Charge

A capital use charge was part of changes introduced by an Accrual Budgeting framework put in place in 1999-2000. The charge was levied on Commonwealth authorities and agencies to reflect the cost of government investment in those entities. Funding for this charge was included in the annual appropriations for the ABC from 1999-2000 to 2002-03. As the charge has since been abolished, appropriations for the charge are therefore not included in the tables in this paper.

164. Australian Government , 'Part 2: expense measures', Budget measures: budget paper no. 2: 2009-10, op. cit. 165. Ibid.

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47

Consolidated Revenue

The ABC's operating revenue has been presented in two formats—Consolidated and ABC, since the publication of the Annual Report 1994-95. The former format encompasses the accounts of both the ABC and its controlled entities (companies owned by the Corporation). The latter consists only of operating revenue for the Corporation. Revenue associated with controlled entities before 1994-95 was negligible. The data presented in Table 1 and Table 2 has been derived from Consolidated Revenue figures as these more accurately reflect the scope of operation of the Corporation.

Orchestral Subsidies

The ABC operated symphony orchestras in each State as part of its Concert Music Division until 1997. The Sydney Symphony Orchestra was incorporated in February 1996 and in December 1996, the State Governments and the ABC Board agreed to a proposal from the Commonwealth Government to corporatise the remaining orchestras. An ABC-owned subsidiary, Symphony Australia Holdings, was established in July 1997 and $32 million was transferred in the 1997-98 Budget from the ABC's base funding to the subsidiary.

From 1997-98 to 2006-07, financial statements separately identified the orchestral subsidies received from the Department of Broadband, Communications and the Digital Economy, through Symphony Australia and from State Governments. Tables 1 and 2 include the Commonwealth orchestral contributions with Commonwealth revenue, while the State subsidies are included with revenue from other sources.

Successive reviews, culminating in the Orchestras Review 2005, led to devolvement from the ABC and the establishment of Symphony Services Australia (now International) to operate as a non-profit arts organisation.166

Capital payments and equity injections

The ABC's financial statements classified all Commonwealth appropriations as revenues from government until 1999-2000, when a payment of $32.2 million was classified as an injection of equity and not included in total operating revenues. In Table 1 and Table 2 this payment and subsequent equity injections have been included in capital revenues to maintain consistency with previous years.

166. Department of Communications, Information Technology and the Arts, A new era: report of the orchestras review 2005, viewed 19 January 2011, http://www.arts.gov.au/__data/assets/pdf_file/0018/25083/ORCHESTRAS_Review_2005.pdf Symphony Services International website, viewed 19 January 2011, http://www.symphony.net.au/home/

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48

Concluding comments

Despite predictions of its inevitable demise as the result of factors such as media market reforms, public service broadcasting globally continues to maintain public support, suggesting that it has a legitimate and ongoing place in a new digital broadcasting world. Indeed, some see the digital world as one which suits public service broadcasting, both philosophically and practically. Academic Graham Murdock envisages in fact a role for public service broadcasters within a shared cultural space, an emerging network of public and civil initiatives which he labels 'a digital commons'.167

Murdock argues, with reference particularly to Europe, that the opening up of markets, which has occurred since the 1990s, led commercial broadcasters to abandon commitment to dealing with difficult, controversial and complex issues in favour of 'reality' programming. As a result, important questions have been swept aside in an avalanche of programmes exhorting viewers to remake houses, gardens, food, bodies and relationships. Against this background, Murdoch concludes, public service broadcasting is more important than ever.168

In an Australian context, Professor Terry Flew and his colleagues agree.169 They argue public service media will become critical as the capacity for commercial media to deliver public affairs journalism and quality broadcast content diminishes through media fragmentation and declining revenues. Opening up of spaces for local content production to users by public service media—the digital commons—has the potential therefore for public resources to be deployed more efficiently and to strengthen traditional reporting and programming functions.170

Australians have traditionally not disputed the contention that public service broadcasting is important and the latest survey of attitudes to the ABC indicates that this view has not changed significantly.171 The ABC was established to deliver information, education and entertainment. Australians appear to be satisfied that it has delivered on these objectives in the past and that it continues to do so in a new digital media environment. This has been in spite of difficulties the broadcaster has faced with regard to funding and in the face of long term criticisms that it is biased or wasteful of taxpayers' money.

Recent criticism, similar to that levelled at other public broadcasters, has been that the ABC is becoming too successful and too like its commercial counterparts in some areas. There appears to be some justification in this criticism, and to concomitant accusations that the trend to commercialisation has led to the 'dumbing down' of some content. Equally, the broadcaster has not

167. G Murdock, 'Building the digital commons', in G Low and P Jauert, eds, Cultural dilemmas in public service broadcasting, Nordicom, Gotrborg, 2005, p. 213. 168. Ibid.

169. T Flew, S Cunningham, A Bruns and J Wilson, Social innovation, user-created content and the future of the ABC and SBS as public service media: submission to ABC and SBS review, Department of Broadband, Communications and the Digital Economy, 12 December 2008, viewed 10 February 2011, http://snurb.info/files/ABC_SBS%20Inquiry_Flew%20et%20al.pdf

170. Ibid.

171. ABC, Appreciation survey, 2010, op. cit.

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49

been entirely free of bias in reporting, or entirely above reproach in administration. But at the same time, it is admired by Australians and looked to as a primary source which sets the tone of national identity and works in the public interest. In this sense it is, potentially at least, perhaps the most appropriate tool to represent the needs and wants of the digital commons Murdoch envisages that public broadcasters will best serve in the future.

Appendix A: an assortment of public broadcasting models

United Kingdom

The British Broadcasting Company, which began broadcasting in 1922, was technically established as a business enterprise, financed by a licence fee payable by anyone owning a radio receiver. But in 1925, John Reith, Director General of the company, argued before a special committee set up to consider the direction British broadcasting should take for the future, that a monopoly public service broadcaster would better serve the public interest. In hindsight, Reith's vision appears paternalistic; a public broadcaster that was a cultural, moral and educative force; one that would not pander to popular demand, because few people really knew what they wanted.172

Nevertheless, Reith's advocacy was influential in the British Government's decision to wind up the British Broadcasting Company and to form the British Broadcasting Corporation (BBC), with funding still derived from licence fees, but operational under a royal charter, subject to periodic renewal.173 A royal charter, rather than a statute was used in establishing the corporation with the intention of ensuring that it was not 'a creature of Parliament and connected with political activity'.174 This set the pattern for British broadcasting for thirty years until the beginning of commercial television transmissions in the mid 1950s—a public service broadcasting monopoly.

The BBC licence fee endowed it with a secure income, insulating it from the pressures and uncertainties inherent in reliance on government grants until the 1980s when an inquiry instituted by the Thatcher Government recommended abolishing the fee and making the Corporation rely on subscription funding.175 In response to this threat, BBC management undertook a significant restructure to convince the government that it was financially accountable and that the licence fee should be maintained. These reforms have been seen as spawning 'a new culture of entrepreneurialism that equipped the BBC well for survival in the news media landscape'.176 A further restructure and imposition of cost efficiencies took place in 2006.

172. A Briggs, The history of broadcasting in the United Kingdom: volume 1: the birth of broadcasting, Oxford University Press, London, 1961. 173. Ibid., p. 54. 174. Ibid., p. 90. 175. Debrett, Reinventing public service television, op. cit., Chapter 2. 176. G Born, 'Digitising democracy' in J Lloyd and J Seaton, eds, What can be done? Making the media and politics

better, Blackwell, Oxford, 2006, p. 128, quoted by Debrett, Reinventing public service television, op. cit., p. 40.

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50

BBC revenue has been supplemented for some time by commercial activities; its 1996 charter establishing a BBC Home Service or public sector arm and BBC Worldwide, a commercial arm. While the commercial ventures of BBC Worldwide have placed 'complex stresses on BBC institutional culture', its

... commercial success has enhanced the value of the BBC in Britain in ways that go above and beyond the revenue returned for programmed production, projecting British culture and creative talent to the world, and reflecting international appreciation of BBC production values and news services.177

BBC Worldwide's success has generated hostile reaction from traditional commercial broadcasters who have been affected by the rise of new media formats. Indeed, the BBC is generally seen as a threat by commercial interests; James Murdoch, in a much publicised speech in 2009, labelling the scale and scope of its current activities and future ambitions as 'chilling'.178

Being funded by a universal hypothecated tax, the BBC feels empowered and obliged to try and offer something for everyone, even in areas well served by the market.

This whole approach is based on a mistaken view of the rationale behind state intervention and it produces bizarre and perverse outcomes. Rather than concentrating on areas where the market is not delivering, the BBC seeks to compete head-on for audiences with commercial providers to try and shore up support - or more accurately dampen opposition - to a compulsory licence fee.179

BBC 1 and 2 audience share in the period 1999-2009 was 29.4 per cent.180 This is significantly more than the share of its main commercial rival, which had an audience share of 15 per cent during the same time, and more than all commercial terrestrial stations.181 Funding from licence fees for BBC operations in the licence year ending March 2010 amounted to £3.4 billion.182

The BBC Trust's annual survey of audience perceptions indicated a high degree of satisfaction with the services delivered by the Corporation. At the same time, there is a serious commitment to review and improved performance by the Trust, which in 2007 replaced the Board of Governors who had been previously responsible for maintaining the Corporation's independence from government. The Trust noted in its 2010 assessment:

177. Debrett, Reinventing public service television, op. cit., p. 41. 178. J Murdoch, 'The absence of trust', Edinburgh International Television Festival, MacTaggart Lecture, 2009, viewed 14 January 2011, http://image.guardian.co.uk/sys-files/Media/documents/2009/08/28/JamesMurdochMacTaggartLecture.pdf

179. Ibid.

180. Broadcasters Audience Research Board, Weekly total viewing summary 1999-2009, viewed 14 January 2011, http://www.barb.co.uk/report/weeklyViewingSummaryOverview Note: there are a number of other channels funded as public service channels, such as CBBC (a children's channel) under the BBC licence fee.

181. All commercial viewing was 25.6 of audience share and other viewing amounted to 44.2 per cent of audience share (figures rounded). 182. Figure stated £3 446.8 million. BBC, Full financial and governance statements 2009-10, viewed 14 January 2011, http://downloads.bbc.co.uk/annualreport/pdf/bbc_ar_online_2009_10.pdf

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... it is more important than ever that the BBC lives up to the public's expectations, remaining a beacon of impartiality and integrity, and underpinning our way of life by supporting open, informed public discussion.

It is also critical that the BBC strains every sinew to deliver value for money to licence fee payers; the Trust will work relentlessly to ensure this happens.183

United States

Public broadcasting in the United States:

... is not seen to be as central and as important to the overall national media culture. It is largely an afterthought, heavily rooted in a formal educational rationale and in some eyes serving principally as a palliative to the perceived shortcomings of the dominant commercial broadcasting system upon which it has been grafted.184

Public broadcasting in the United States was indeed a late introduction. A Public Broadcasting Service (PBS) television network was initiated in 1967 and National Public Radio (NPR) in 1970 following recommendations of the Carnegie Commission on Educational Television. The Carnegie Commission considered that the many disparate educational broadcasters, which had emerged since the 1920s, could be developed into an interconnected publicly funded system.

The Public Broadcasting Act 1967 (US) established a Corporation for Public Broadcasting (CPB) which was to promote development of the public broadcasting system and to distribute government funding. The 1967 Act required 'strict adherence to objectivity and balance in all programs or series of programs of a controversial nature' and prohibited the federal government from interfering or controlling what is broadcast on the public service networks.185 The 1967 legislation did not guarantee long-term government funding support. Consequentially:

From the beginning, public broadcasting has had a funding problem. The system is non-commercial and is prohibited from selling advertising time, at least in the same form as commercial stations do. At the same time, government support has been inconsistent or nonexistent. Concerns about how the limited funding is distributed, and the effect the distribution system has on programming and resource management, have been plentiful. Critics question a funding system that requires broadcasters to regularly lobby Congress for financial support. The broadcasters question the logic of having to continually delegate resources to raise funds from community and business sources. And some within the broadcast industry itself,

183. BBC Trust, The BBC Trust's review and assessment, 2009-10, viewed 14 January 2011, http://downloads.bbc.co.uk/annualreport/pdf/bbc_trust_2009_10.pdf 184. R Williams, Television: technology and cultural form, Fontana/Collins, London, 1974, quoted by W Rowland, 'Public broadcasting in the United States', invited submission to Encyclopedia [sic]) of Communication and Information,

Macmillan, New York, 2002, published as separate online article, viewed 13 January 2011, http://www.netaonline.org/NFPTE02-Rowland-PBinUSA.pdf 185. Public Broadcasting Act of 1967(US), viewed 13 January 2011, http://www.cpb.org/aboutpb/act/

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Congress, and the public at large question the tendency of the system to creep toward further commercialism.186

Public broadcasting does receive funding from state and federal governments, and it appears that funding has increased significantly over time, but it operates mostly with funds from private sources—membership pledges, corporate sponsorship and philanthropy. In 2008 this amounted to 83.4 per cent of re-operational revenue.187

It has been argued in the case of public television, the problem with reliance on corporate sponsorship has been that increasingly, what were sponsorship announcements have been transformed, through 'enhanced underwriting', into what resembles commercial advertising.188 Enhanced underwriting began in the 1980s when public broadcasters encouraged commercial corporate entities to underwriting sponsorship messages with funds from their marketing budgets rather than their charity budgets.

The trend towards commercialisation has been criticised as driving public broadcasting: 'closer to the programming and audience considerations that guide commercial broadcasting and against which it is assumed that public broadcasting must stand'.189 Similarly, increased commercialisation has been seen as threatening the maintenance of other forms of revenue for public broadcasting.190 Some find increasing commercialisation highly disturbing and threatening to the ideals on which public broadcasting is founded. It raises the question:

... of whether the public television of the 21st century will be 'public' in any way more than name only, or whether it will use the notion of public broadcasting as a method of marketing essentially commercial programming. 191

In contrast, there is support for more commercialisation which some believe is the only source of revenue which will ensure public broadcasting survives and expands. There has also been pressure for public service broadcasting to exploit the marketing of ancillary products, such as toys and books, as an alternative source of funding, but some see this as exploitation.192

Given its reliance on donations and funding drives, there is also room to ask questions about the extent to which the United States public broadcasting system serves audiences neglected by

186. K Loomis, 'American public broadcasting: will it survive adolescence?' Journal of Broadcasting and Electronic Media, Summer 2001, viewed 13 January 2011, http://findarticles.com/p/articles/mi_m6836/is_3_45/ai_n25037086/?tag=content;col1

187. Corporation for Public Broadcasting, Appropriation Request and Justification, FY 2011 and FY 2013, February 2010. 188. Underwriting is defined on the PBS website, viewed 12 January 2011, http://www.pbs.org/producers/guidelines/onair.html 189. Rowland, 'Public broadcasting in the United States', op. cit. 190. Ibid.

191. J Ledbetter, 'Funding and economics of American public television' in E Noam and J Waltermann, eds, Public television in America, Bertelsmann Foundation Publishers, Gutersloh, Germany, p. 92, in Loomis, American public broadcasting, op. cit.

192. Ibid.

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commercial television, reflects the heterogeneity of American society or actually serves as a forum for debate, as was envisioned by the Carnegie Commission.193

If you can only do the stuff that is not profitable and you can only depend on listeners and viewers to bankroll you for a large portion of your income, is a clear pressure to pitch your programming to the upper-middle class. That is the rational thing to do. Anything else would be suicidal if you're running a station. So you have a system pitched at those who have disposable income and who give you money during pledge drives.194

Moreover, despite there being evidence to the contrary, conservatives perceive the PBS to have a liberal bias and criticise its receipt of any government revenue.195 They have instigated periodic attempts in the Congress to discontinue funding of the CPB and although clearly state and federal sources account for a minority public television funding, the American public broadcasting system is vulnerable to political pressures from this sector.196

Canada

The Canadian Broadcasting Corporation (CBC) was created as a Crown Corporation in 1936, following a Royal Commission that was established to consider the effect of American cultural influence on Canadian radio programming.

The public service mandate of the CBC is set out in the Canadian Broadcasting Act.197 The Act establishes the CBC as a the national public service broadcasting organisation with responsibility to provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains.198 The CBC is ultimately responsible to Parliament for its overall conduct, but independent of government control in day-to-day operations.

While the CBC is funded primarily by federal grants (about two-thirds of its budget), it also derives revenues from advertising, the sale of programs to other countries and specialty services.

193. Debrett, Reinventing public service television, op. cit., p. 135. 194. R McChesney, 'Public broadcasting: past, present and future', 1990, in M McCauley, E Peterson, E Artz and D Halleck, eds, Public broadcasting and the public interest, M E Sharpe, New York, 2003, quoted by N Ballou, 'Government funded public broadcasting : a United States ethical necessity', Master of Arts Thesis, Queensland

University of Technology, 2006, viewed 13 January 2011, http://eprints.qut.edu.au/16254/1/Nicole_Ballou_Thesis.pdf 195. See discussion by S Rendell and P Hart, 'Time to unplug the CPB', article on FAIR website, viewed 17 January 2011, http://www.fair.org/index.php?page=2671 196. See for example, calls to cease funding to public radio after an on air presenter was fired for comments made

about Muslims. Conservatives did not dispute any network having the right to present and promote certain views, but considered taxpayers should not be forced to subsidise left wing views. H Khan, 'War of words: Republicans target NPR funding amid "Nazi" claims', ABC (that is, American Broadcasting Company) news, viewed 17 January 2011, http://abcnews.go.com/Politics/republicans-target-npr-funding-roger-ailes-apologizes-nazi/story?id=12191768 197. Broadcasting Act 1991 (Canada), viewed 17 January 2011, http://laws.justice.gc.ca/en/B-9.01/ 198. 'The Canadian Broadcasting Corporation', Media Awareness website, viewed 18 January 2011, http://www.media-

awareness.ca/english/resources/profiles/government/cbc/profiles_gov_cbc.cfm

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The debate about whether Canadian tax dollars should be allocated for Canada's public broadcaster is an age-old one. Opponents contend that public money used to fund the CBC could be better spent on other social programs and necessities, and that the corporation's funding should instead come from private sources, such as advertising. Opponents of public funding for the broadcaster have further argued the CBC should adopt a structure such as collecting a licence fee (like European public broadcasters) or rely on contributions from individual viewers and listeners [like the Public Broadcasting Service (PBS) and National Public Radio (NPR) in the United States.

Proponents of the CBC contend the broadcaster fills a niche that private media organizations do not. Private networks fill their primetime schedules with American series acquired for a fraction of what it would cost to produce equivalent productions in Canada. In this context, the corporation's proponents contend that the CBC and its Canadian programming fulfil a valuable role in Canadian society, promoting Canadian culture and cultural industries. 199

In 2010, the operating budget of CBC was (CAN)$1.7 billion, this funding included (CAN)$567 million from advertising and other services.200 Analysis undertaken for the CBC in 2005 noted that Canada had the third lowest level of public funding for its public broadcaster, only ahead of New Zealand and the United States. 201 The relevant diagram is below.

199. 'Canadian Broadcasting Corporation', Cavenager.com 2008, quoted in T McCausland, 'The Canadian Broadcasting Corporation', Mapleleafweb, op. cit. 200. Canadian Broadcasting Corporation/Radio Canada, The old rules no longer apply: reshaping Canadian public broadcasting: annual report 2009-10, viewed 20 January 2011, http://www.cbc.radio-

canada.ca/annualreports/2009-2010/pdf/AR0910_e.pdf 201. Nordicity Group, Analysis of government support for public broadcasting and other culture in Canada, Report prepared for the Canadian Broadcasting Corporation/La Société Radio-Canada, June 2006, viewed 20 January 2011,

http://www.cbc.radio-canada.ca/submissions/crtc/2006/BNPH_2006-5_CBC_RC_Public_Broadcaster_Comparison.pdf

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Funding for public broadcasters 2004

Source: Nordicity Group 202

Like counterparts elsewhere, the CBC has been accused of bias by all sides of politics. According to one assessment, since the 1950s, 'no federal government has felt especially warm to the CBC. All have believed that it wanted to undermine them or diminish their authority'.203

In 2010, for example, the broadcaster was accused by conservative critics of employing a pollster who also advised the Canadian Liberal Party to provide data for use on CBC news reports. John Walsh, President of the Conservative Party Canada considered the practice raised 'serious questions about the impartiality of Canada's publicly funded national broadcaster'.204 The CBC's Ombudsman found that no bias could be attributed to the contracting of the pollster.

202. Ibid.

203. P Attallah, 'Public broadcasting in Canada: legitimation, crisis and the loss of audience', Gazette, vol. 62, nos. 3-4, 2000, viewed 20 January 2011, http://rcirib.ir/articles/pdfs/cd1%5CIngenta_Sage_Articles_on_194_225_11_89/Ingenta785.pdf

204. CBC-Radio Canada, Office of the Ombudsman, Review: complaints about comments made by Frank Graves, President of EKOS Research, about a possible strategy for the Liberal Party, 18 May 2010, viewed 24 January 2011, http://www.cbc.ca/ombudsman/pdf/graves-ekos-rev.pdf

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New Zealand

In New Zealand, the original intention was to create a state broadcasting system based on the BBC model. In 1935-36 radio was nationalised and an inquiry into the introduction of television recommended a state monopoly. Despite these intentions, practical considerations intervened to ensure a different reality. A small population, which could not generate sufficient income through licence fees to support fully state-funded services, meant that advertising was allowed as a supplementary source of income for television from the time it was introduced in 1960.

It has been argued also that while the public broadcaster was expected to reflect national culture and identity, its ability to do so has consistently been limited by its lack of available funding.205

Advertiser funding increased 'in proportion and influence' during the 1970s and early 1980s and public funding declined and in 1989, television became more than 90 per cent dependent on advertising revenue.206 At this time, as part of the drive towards economic restructure which dominated the 1980s the New Zealand public broadcaster was broken up into separate state-owned corporations, Television New Zealand (TVNZ) and Radio New Zealand (RNZ).

RNZ remains commercial-free, but while TVNZ claims it is a public broadcaster, about 90 per cent of its funds are derived from advertising and merchandising sales for its two stations. The remainder of funding comes from government sources.

According to New Zealand academic, Trish Dunleavy, while the Clarke Labour Government, elected in 1999, could not reverse the commercialisation of TVNZ, it at least attempted to revitalise the concept of public broadcasting by imposing a public service charter.207 The Charter involves a dual remit whereby the broadcaster has to maintain commercial performance, while simultaneously providing public service broadcasting.208

TVNZ's efforts to balance commercial performance with charter objectives have been extensively criticised. This is because, despite some investment in local programs, the content on both its stations has remained similar to pre-charter schedules, with a continuing high proportion of light entertainment and reality shows.

205. G Murdock, 'New Zealand', Museum of Broadcast Communications, n.d., viewed 24 January 2011, http://www.museum.tv/eotvsection.php?entrycode=newzealand 206. T Dunleavy, 'Public television in a small country: the New Zealand "experiment" twenty years on', Flow, University of Texas, May 2009, viewed 24 January 2011, http://flowtv.org/2009/05/public-television-in-a-small-country-the-

new-zealand-%E2%80%98experiment%E2%80%99-20-years-on%C2%A0%C2%A0trisha-dunleavy%C2%A0%C2%A0victoria-university-of-wellington%C2%A0%C2%A0/ 207. Ibid.

208. The TVNZ Charter, viewed 24 January 2011, http://tvnz.co.nz/content/823782

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The current New Zealand National Government vowed to dispense with the TVNZ Charter.209 It introduced legislation in 2009 to replace the Charter with 'a statement of functions, against which Television New Zealand would determine its own priorities.'210

The 1980s changes to New Zealand broadcasting also introduced a statutory body, NZ on Air, to act as a funding agency to promote New Zealand content in programming. Trisha Dunleavy argues public service television objectives were therefore vested in this body.211 But there are a number of limitations on the agency. These include its obligation to consider the 'potential size of the audience likely to benefit' from the projects it funded. According to Dunleavy, this instruction underlined that it was intended to facilitate programming with broad appeal. Moreover, its limited funding has had to be used for programs which broadcast networks agree to air and considerations of who receives funding are of a competitive nature.212

In 2009-10, NZ on Air received (NZ) $127.6 million in government funding. This funding included funding for Radio New Zealand and funding for community broadcasting.213

Commentator Paul Norris calls TVNZ a lost cause, a public broadcaster in name only and refuses to acknowledge NZ On Air as a public broadcaster; it is 'merely a funding agency, albeit a powerful one. It has no access to the airwaves'.214

209. A Hubbard, 'Why the TVNZ Charter didn't have a show', Sunday Star Times, 11 July 2010, viewed 24 January 2011, http://www.stuff.co.nz/sunday-star-times/features/3903813/Why-the-TVNZ-charter-didn-t-have-a-show 210. Television New Zealand Amendment Bill 2009, viewed 24 January 2011, http://www.legislation.govt.nz/bill/government/2009/0089/latest/whole.html#dlm2411813 211. Dunleavy, 'Public television in a small country', op. cit. 212. Ibid.

213. Ministry for Culture and Heritage, Funded broadcasting outcomes, June 2010, viewed 24 January 2011, http://www.mch.govt.nz/research-publications/publications/ministry-reports/funded-broadcasting-outcomes-june-2010

214. P Norris, 'A race to the bottom', New Zealand Listener, vol. 222, no. 36440, March 13-19, 2010, viewed 24 January 2011, http://www.listener.co.nz/issue/3644/features/15079/a_race_to_the_bottom.html

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