CHAIR —I welcome the officers from the Australian Broadcasting Corporation. Mr Scott, do you wish to make an opening statement or shall we go straight to questions?

Mr Scott —No, I would be happy to make an opening statement, Senator, thank you. The ABC would like to open by acknowledging that, in a difficult economic environment, its new triennial funding arrangement has it well positioned for the future. The extra money allocated by the federal government will enable the ABC to significantly step up its local drama production, working with the independent production sector to generate new jobs and to deliver high quality content that its audience expects.

We are also eager to begin work on our new digital television channel for children. We are aiming to have this exciting new channel on air by the end of this year, allowing the ABC to build on the trust it has established with generations of Australian families by broadcasting fresh, vibrant programs relevant to young audiences in an advertising-free environment.

The new broadband regional hubs project is an example of the ABC’s work as a new media innovator. We will put specialist editors in local radio stations acting as catalysts and hosts for the creation of user-generated content. ABC local websites will act as virtual town squares, building and maintaining vital community links.

In my briefings to staff, I have described the new triennium package as an important down payment on the ABC’s future. The media and technological worlds are changing at a pace unimaginable a few years ago. Even with three years of funding security, the ABC must continue to assess the efficiency of its operations and to review its priorities in the light of changing audience expectations and new technological opportunities. We will continue to focus on delivering services free of charge to all Australians that the ABC is in the best position to deliver, given the public’s investment in our resource base, our presence across the nation and globally, our reputation for innovation, the public’s trust in us and our obligations under the charter.

I would also like to acknowledge before the senators the ABC’s continuing role as an emergency broadcaster at times of great community need. When I was last before this committee, I spoke of the ABC’s work during the Victorian bushfires and the Queensland floods.

Over the past week, the ABC has again been called into service during the wild weather and widespread flooding in South-East Queensland and the New South Wales north and mid-north coast. Once again on radio, television and online, we have worked around the clock to provide the community with the latest news, official reports and the information needed concerning evacuations, flood levels and severe weather alerts.

I take the opportunity to thank the very many ABC staff who have worked tirelessly to provide this service, staff from the regions affected, those who travelled in to provide back-up support and those whose job it is coordinate this emergency broadcasting activity. They have worked with great dedication and professionalism. Thank you.

CHAIR —Thank you very much, Mr Scott. Senator Cormann.

Senator CORMANN —Thank you, Madam Chair. Mr Scott, you would recall that I asked you some questions at the last estimates about the future of the Hopman Cup in terms of the ABC broadcast of it. I wonder whether you could give us an update on where things are at.

Mr Scott —Yes, Senator, I am pleased to be able to inform you that the ABC have agreed to continue with the broadcasting of the Hopman Cup for the next tournament in 2010, and we will be continuing to be in discussion with the tennis authorities about any future commitment beyond that date.

I did meet with the Premier of Western Australia, who indicated to me the strong support that the Hopman Cup has in Perth and across the state. We understand that but, as I indicated last time, the ABC has a wide range of commitments in covering sport. We are leaders in providing sports coverage on radio and through online. We have limited opportunities to broadcast sport on television. Our focus is, in the main, around providing coverage of sports that do not receive widespread television coverage, but we were pleased to be able to do a deal to continue the broadcast of the Hopman Cup in 2010.

Senator CORMANN —I recall you said at the last Senate estimates that you understood that tournament organisers needed some certainty moving forward. You have essentially gone through a 15-year period with three rolling five-year agreements, so you have now done a one-year extension. It is a bit of a stopgap measure, is it not?

Mr Scott —We are continuing to review our commitment to the Hopman Cup down the track. As you would be aware, Senator, there are a number of new tournaments that have emerged in Australia in that period of early January prior to the Australian Open. We are continuing to be in consultation with them. We understand that they were very pleased to get the news of the extension for 2010, and we will continue to review it over time. But that is what we were in a position to do at this point.

Senator CORMANN —Are you aware that the venue for the Hopman Cup is going to change? There are only going to be two more tournaments—

Mr Scott —I am aware of that, Senator, and the International Tennis Federation wrote to me and pointed that out. We will continue to review over time what our ongoing commitment is to the tournament.

Senator CORMANN —It would not make sense to make a change. If there is a two-year period, surely it would have made sense to at least extend the contract for a two-year period?

Mr Scott —I was pleased that we were able to review it for a year. I understand the desire now for another year on the back of that. We will need to make a decision on it down the track.

Senator CORMANN —How far is ‘down the track’?

Mr Scott —We are continuing to consult with the officials there. I was aware that this year the decision did not come through until April. We were intending to do it much earlier than that for the certainty that you outlined.

Senator CORMANN —When we spoke in February I think you said that there would be a decision in the next couple of weeks, and so we have had a stopgap measure—

Mr Scott —It was because we needed to negotiate that. It was not simply a case of the ABC making a decision; it was whether we could come to terms with the tournament organisers, and I was very pleased that we were able to do that.

Senator CORMANN —In the last round of estimates you would be aware I asked a question on notice about the arrangements for overseas coverage. The answer was that overseas sales of the project are handled by the International Tennis Federation.

Mr Scott —Yes.

Senator CORMANN —Does that mean that the ABC plays no role in international distribution at all?

Mr Scott —No, we do not, Senator. It is done by the ITF, I believe.

Senator CORMANN —Is that a usual arrangement?

Mr Scott —I think it would be, Senator. What we are simply doing is providing a feed of the television broadcast that is then on-sold by the International Tennis Federation.

Senator CORMANN —Is that what commercial free-to-air operators will do for similar events?

Mr Scott —I would imagine so, Senator.

Senator CORMANN —They would not achieve a fee in terms of overseas distribution?

Mr Scott —The ABC did receive fees for a number of years up to, I think, 2002, but has not received fees subsequent to that. This is simply a service that we provide. What we do is provide the coverage. We then broadcast the coverage in Australia, and then the ITF takes that coverage and they try to push that coverage into worldwide markets. But, as we have said in the past, it is a tournament that is a little unlike others, which I know is part of the argument made for—

Senator CORMANN —It is a very unique event and it is an event in Western Australia, of course. In Western Australia we get very concerned when Sydney based corporations make decisions to scrap things that are highly valued in Western Australia. I guess that is the reason we are probing—

Mr Scott —Senator, I dispute the implication in your statement.

Senator CORMANN —I am sure you would.

Mr Scott —We are well aware and we monitor carefully the audience engagement and audience levels for a tournament like the Hopman Cup. We have carefully monitored those audience figures over recent years. We are in consultation with people in Western Australia. As I indicated previously, I did meet with the Premier. Our state director, Geoff Duncan, has had a number of conversations with people over there. We are aware it is important there. As I said, it does not in our list of priorities top our commitment to covering events like women’s basketball or women’s soccer or the local football that we cover. Our commitment to covering the West Australian Football League has continued and is ongoing. We will continue to review our opportunities to cover the Hopman Cup.

Senator CORMANN —I do not really understand why one should be at the exclusion of others, I guess. This is, as you say, a unique event internationally. It is something in which the ABC, over a very long period of time, has played an important role in helping to achieve. I would be looking for some sort of indication as to when a decision in the future is likely to be.

Mr Scott —I think that we would in a position to do that by time the tournament runs in 2010. I would imagine that part of our decision-making process will be to review the success and the impact of that tournament: the kinds of players who are attracted to it; the level of audience engagement in Western Australia and around the country when we show it on television; and the cost of manning the coverage.

Senator CORMANN —You are not proposing to have a decision every year to extend it only every year?

Mr Scott —No. As I indicated, it was under review and we decided to look at its performance for another year. The ITF have written to me and pointed out that there will be one more tournament at Burswood after that, prior to moving to the new stadium. I imagine that those promoters will be looking at a range of other television opportunities beyond the ABC, be it the commercial networks, be it the new 24-hour sports channel that Channel 10 has started, be it the pay TV operators.

Senator CORMANN —But you understand that, given the tournament is going to be at the same location for two years, it would not make much sense to change arrangements in terms of broadcasting?

Mr Scott —I understand that view, Senator. As I said, it is a view that has been pointed out to me by the International Tennis Federation.

CHAIR —Thank you, Senator Cormann. While we are still on ABC’s sport, I go to Senator Lundy.

Senator LUNDY —Thank you very much, Chair. I would like to ask some questions about particularly the ABC’s coverage of sport that women play. I have written to you, Mr Scott, commending you on coverage of the new national women’s football league. I should declare that I am the independent chair of the Canberra United team which is participating in that league side.

Mr Scott —And performed very well in the first season.

Senator LUNDY —I have an abiding interest in it, but also my interest—

Senator Conroy —And she does play regularly on weekends and in the parliamentary football team.

Senator LUNDY —Very poorly unfortunately—thank you, Senator Conroy. In the context of my interest in Canberra United, I have a longstanding curiosity and support for the ABC’s investment in the coverage of women’s sport. With the recent changes and particularly with the advent of ABC2 and previous discussions—I think there was a debate about whether or not sport would continue to be screened on ABC2—I wanted to ask where your considerations are in that regard. I would also like you to give an outline as to the extent of your commitment to the coverage of women’s sport in Australia.

Mr Scott —Thank you, Senator. We have a few constraints at the moment around our broadcasting on ABC2. One is that, under our current arrangements, we need to do a national feed; we cannot do local breakouts. This inhibits our ability to do local sporting coverage anywhere apart from on ABC1. Back when ABC2 was first established, there was little funding for content or new content, so sport was quite useful for filling our schedule. I think we now have strategy that we are executing around ABC2, which means that we do not fill up the airways with lots and lots of sport. I think the other thing that we need to take into account is that, even though a significant growth is taking place in digital television, the penetration of ABC2 at the moment is certainly not full penetration to all of the country. At the moment we are looking to the forthcoming season of the women’s football and to broadcast that match of the round on ABC1, which will give it the largest audience that we expect that we will be able to find. That is the same as the inaugural season. We are about to enter negotiations for another season of the WNBL. That season runs, as you know, from October to March. We also expect that there will be live coverage of that competition on Saturday afternoons on ABC1.

Senator LUNDY —You are moving that from ABC2 to ABC1?

Mr Scott —We are working for live coverage on ABC1, but I think the final details of that will emerge from the negotiations. We are also in negotiations with Golf Australia for a further three-year deal for the coverage of the Women’s Australian Open golf. The next tournament takes place in February 2010. I imagine that coverage would be afternoon coverage on the weekends on ABC1 as well. We are about to advertise, as you would be aware, for a women’s sport broadcaster internship. This will be the third year in a row that we are offering that service. I think it is fair to say that we expect the focus of our sports coverage will remain on ABC1, though not exclusively on ABC1; we will review the ABC2 commitment over time. In all our sporting coverage, the ability to localise on the multi-channels will give us more flexibility around scheduling.

Senator LUNDY —With respect to your plans for multi-channels, can you point to any prospective opportunities for greater coverage of women’s sport?

Mr Scott —I think there are a number of factors that come into play with that. One is, as I was pointing out to the senator from Western Australia, there are now a number of outlets that are competing for women’s sports rights. There are, I think, four channels on subscription television and Channel 10 now has a digital channel as well. We will continue to look for opportunities.

Senator CORMANN —It is not quite the same, though, is it, subscription TV?

Mr Scott —No, it is not. I am just saying that there is a market for bids and activity—and, as I was going to point out, the ABC, of course, used to show a lot of netball, but we lost the rights to that netball because a market was created. Frankly, I think one of the good things the ABC can do is to create audience interest and engagement. Sometimes the consequence of that is that a market is created around that product and means that we lose it. As it was with Kath & Kim, so it can be with netball. As long as it is still reaching audiences we will continue to pursue options. We will continue to look at it over time, Senator. Beyond the women’s football, the basketball and the golf, I do not think there is anything that is specifically on our agenda at the moment, but we will see what opens up down the track.

Senator LUNDY —Are you able to provide the committee with any information about the respective ratings, particularly of the football, and how it performed as content?

Mr Scott —Let me take it on notice, Senator, and I will be able to give you details on that.

Senator LUNDY —Also with the WNBL, given it was on ABC2 for how many seasons—was it one or two?

Mr Scott —I think it was one; I am not sure. We only started getting the detailed program-by-program ratings figures for ABC2 from the middle of last year. So we will see what is available and provide that to you.

Senator LUNDY —I would be interested also in what you perceive or what you understand to be the penetration of ABC2.

Mr Scott —Yes.

Senator LUNDY —For all intents and purposes, I think it is better if this content is on ABC1 because it has a wide reach, but I also acknowledge the fact that you boost the appeal of ABC2 by putting popular content on a digital channel.

Mr Scott —That is right. Part of our strategy is for the ABC to play a leadership role in driving the take-up of digital television. We expect that is what the children’s channel will do. Over time, as every week goes by, more and more people are signing up to digital television, through either a new set or a set top box. Freeview is playing its part in promoting that. So, as every year goes by, it will be less and less of an issue that programming is on ABC2.

I think part of what we are trying to do as well, and you will see this if you are watching our network, is cross-promoting, so you will see a promotion for the ABC2 programming on ABC1. We are increasingly trying to integrate our sporting brands as well. So you will find there is promotion of these women’s sports taking place in Grandstand on radio and certainly a presence on our online sites. For example, Grandstand cricket over the summer paid significant attention to the women’s World Cup. We provided some coverage of that on radio as well. I think we are certainly doing the very best we can to increase awareness and coverage of women’s sport.

Senator LUNDY —On those events, rather than national league coverage, if you could also take on notice providing the committee an outline of the range of commitments the ABC has entered into with respect to event based coverage of sport that women play?

Mr Scott —Yes, we are happy to do that.

Senator LUNDY —Finally, and this is I suppose a little cheeky given the government’s significant investment in the ABC with respect to other digital channels, what is the likelihood of and what is your thinking with respect to a dedicated sports channel, like Channel 10 has proceeded down that path?

Mr Scott —Senator, there are a number of questions—

Senator Conroy —Can we just get the kids TV one going first!

Mr Scott —Senator, there would be a number of questions on that. I think one would be spectrum availability, even though we appreciate that fast broadband to every home provides us with other distribution options that we may have had in the past. It is expensive to broadcast sport. As you would have seen, if you go to some of our events, we take out the outside broadcast van and multiple cameras. It is an expensive and detailed logistical exercise. There would be spectrum availability and significant cost issues. I think one of the things that we would want to do is to think through whether, with commercial TV moving into sport on multichannels and with a range of sports available on subscription television, there was sport left for the ABC to cover that made that investment worthwhile. The media is undergoing great change. Of all areas of coverage, I suppose sport is the one for which there remains a very viable market in media terms. The cost for us to compete on rights for things that are available elsewhere would be a very significant amount of money.

Senator LUNDY —Thank you. I think that is a realistic and thoughtful answer, but I also want to ask the question more generally. It is not just the sports that women play; there are a lot of other sports out there that struggle to get coverage.

Senator Conroy —Volleyball.

Senator LUNDY —Volleyball.

Mr Scott —The great example of that, I must say, that we found is the Paralympics.

Senator LUNDY —Yes.

Mr Scott —The single biggest driver that we can detect of growth in ABC2 audience measures was the coverage of the Paralympics from Beijing, where I think the average reach of our ABC2 audience increased by around half a million when that was on. It was a very big increase.

Senator LUNDY —That is fantastic.

Mr Scott —There are numbers of sports, Senator, that do not achieve, I suppose, that fevered, commercial market for their rights. They are still pretty expensive to cover. There is some interest in them during, say, Olympic and Commonwealth Games but not too much outside that at the moment. We just need to weigh all that up, I think.

Senator LUNDY —I note the ABC refers to its charter in the context of undertaking the coverage of sport that women play. Is there a place for reference to your charter for covering sports that, for whatever reason, cannot crack the commercial market, thereby underpinning perhaps an argument for greater coverage, despite the expense, to give the Australian population exposure to sports that are very popular but otherwise are not really seen and cannot derive revenue from coverage?

Mr Scott —That, I think, is where our activity is focused. Two examples in recent years are netball and lawn bowls, which is a mass participation sport that has achieved really very little broadcast coverage. When we view our investment in sport as far as opportunity cost is concerned, that is where I suppose coverage of issues like the coverage of the tennis compared to those other sports comes into play—not that in isolation a tennis event is not worthwhile covering, but is the money better spent there or better spent elsewhere? So, yes, we continue to weigh it up. Iain Knight, who you would know runs our television sport coverage, is very aware of these issues and we do continue to look for opportunities to broaden out where we can.

Senator LUNDY —Finally, what endeavours are you exploring online to, as you say, cross-populate your sports offering to the Australian public using the different media that you support?

Mr Scott —A number, Senator. We will shortly be launching a new ABC Grandstand website, which will be bringing together the best of ABC sport on television and radio. There will be blogs there but also opportunities for user-generated content. One of the things we would like to be able to do is around user-generated content. Ä lot of sport takes place in grassroots communities and there is ability in a sense for those results and that information to come in. It would be a place where you could get all the information on what is happening in sport, not just at a national or a state level but at a local level as well. That site is well into development. I expect it will be launched shortly and that will be a real asset as well.

Senator LUNDY —Thanks, I will look forward to it.

CHAIR —Thanks, Senator Lundy. Senator Troeth.

Senator TROETH —Good afternoon, gentlemen. I had a series of questions and I would just like to give some background first so you can place this. On or about 1 May 2009 and following, the ABC reported the UN allegation that Israel had targeted and hit a UN school at Jabalia in Gaza, resulting in the deaths of approximately 40 civilians who had sought shelter there. The ABC reported these allegations widely; no fewer than 19 News Online articles, three AM, three PM, 2RN Breakfast and The 7.30 Report programs covered or mentioned what proved to be a false UN allegation. Those allegations also received significant coverage on ABC television and radio news.

A month later, on or about 5 February, the UN issued a clarification retracting that allegation, but the ABC coverage of that retraction was very much less than for the original allegation. There was one News Online article and a solitary radio broadcast on The World Today. Many of the reports and programs referencing the original false allegations remain entirely uncorrected, although in some cases an editor’s note has been added to the transcript located on the ABC website. Can you give me an explanation for the failure by the ABC to correct many of the reports and programs reporting those false allegations, as required by your editorial policies?

Mr Scott —I can give you some information, but we will be able to provide more to you down the track. As you would be aware, complaints have been made around this. An investigation is being led by our audience and consumer affairs division. That investigation is nearly complete and we will be releasing detail on that shortly. This is a challenging set of facts for us to cover. As you would be aware, there will be many circumstances where there is a story where either facts change or new facts emerge down the track. We have six million pages on abc.net.au and we need to attempt to exercise judgment and do our best to put editors’ notes on, to correct or clarify as best we can. I think the question that is being reviewed at the moment is whether in fact we did enough in these circumstances where new facts emerged a considerable time after the original reporting. The other thing that we are looking at too is whether in fact there was the correct dissemination when these new facts emerged and the UN made a different statement, whether there was a complete enough dissemination of that around the ABC. That is the work that we are now doing and is now underway.

I would say to you it is going to be very difficult for us to correct everything that is online that has ever been said around a story when new facts eventually emerge, and so we need to look at where we correct or clarify. If you go to our website at abc.net.au you will find a correction around this. If you go back and look at some of the stories, you will find an editor’s note that has been appended to that. But whether it was complete or thorough enough, Senator, that is what we are reviewing at the moment. I will be able to provide you with more details of that down the track.

I would say to you also that one of the things that media organisations often do is correct and clarify and make statements but also in the coverage that is being provided. When this story was first reported, it was a global story; it was a very big story. When the UN retracted that, we did report it. It did come in our news cycle here, tragically, just about the time of the bushfires. If you look at the weight of our media coverage, we provided an enormous and exhaustive coverage of the bushfires, and so therefore the focus of time that we were giving around the Middle East coverage was somewhat diminished. But we are aware of it and we are working through it.

Senator TROETH —Will the report come down regarding a general policy on corrections or will it be just this particular case?

Mr Scott —It will be looking at what we believe is necessary to do to comply with section 4.3 that you have referred to of our editorial policies, which is about correcting online records. We have, I think, been doing more as far as online corrections or corrections in recent times are concerned, but I think we are using this case study as an effort to help guide our thinking around what is appropriate.

Senator TROETH —I appreciate your remarks about the bushfires. Certainly it was entirely necessary and appropriate that the ABC devoted an enormous amount of time and effort to covering that. Nevertheless, would you concede that few, if any, of the groups who are interested in this particular question would ever have seen the corrections by way of the editor’s note appended to the transcript?

Mr Scott —I think that depends. There is a debate—we have discussed this with Senator Abetz in the past—as to when it is appropriate to make on-air corrections. We do run on-air corrections, we do run on-air clarifications, but we are attempting to broaden our range of options on running corrections. We now do have a website, which we did not have a year ago, that people can go to, rather than going to specific programs. I think a lot of people would not quite remember where they heard something. So you can go to one place and have it all captured. I think people who study these things do look at the editors’ notes, but there are some who say that we should do more on-air corrections and clarifications. Part of the difficulty of that, Senator, is that the person who is listening one day may not have been the person who was listening originally. So we are continuing to look and review. We are quite open to the criticism. I take on board the concerns of the people. It was a very significant story that got significant coverage at the time and we will review whether in fact we did enough when new facts came to light.

Senator TROETH —You mentioned the review or report to be released by the consumer panel. Is that the name of the body?

Mr Scott —No, what I am saying is that complaints were made. We then, through our internal self-regulatory processes, review that. We will then respond to the complainants but also we will often put a statement up on our online consumer affairs site which clarifies our findings on this matter. I will be happy to provide you with a copy of those findings as well.

Senator TROETH —Yes, thank you. Apparently, neither the code of practice nor the editorial policies mention specifically what constitutes an appropriate manner of correction.

Mr Scott —Yes.

Senator TROETH —But a recent report by the Independent Complaints Review Panel has provided some guidance. The view was that the correction should have been broadcast promptly as in this way the corrections would have reached as many as possible of the original viewers who could have been misled. Would you agree with that?

Mr Scott —I accept, Senator, that if we identify that an error has been made that is a major factual error which may have misled the audience if it was not corrected and it is a matter that can be easily and clearly corrected, then to do that in a timely fashion is, of course, beneficial. I think sometimes there are complaints around the delay that it might take to put a correction up on air, but that is a reflection of the fact that we have run a quite detailed analysis of the circumstances, a reconstruction of what has happened. We have reviewed it and then, when we have come to a decision, we have put it up on air. Sometimes I think we need to be able to run appropriate processes, but if in fact there is something that is a major factual error which can be easily corrected and has been officially corrected on air, then, yes, we should do that as quickly as possible. That is our advice. That is what we want to do.

Senator TROETH —You did not consider this a major factual error—the fact that 40 people had not necessarily been killed or injured?

Mr Scott —What I am not going to do is pre-judge the process that we are running now and whether in fact we have handled this correctly or not.

Senator TROETH —All right. I will be interested to see that. I gather there was no curiosity at editorial level regarding how such an error could possibly have been made by the UN and why it took such a long time to correct the record. I mean from a program point of view.

Mr Scott —I am not sure where that comes from. I am not in a position to go into the thinking and the planning of our editorial managers around that. That may well have been considered, but I am not sure. All I know is that at the time this came out, the absolute clear focus of our editorial activity was not around Middle East coverage, as I indicated earlier.

Senator TROETH —The ABC repeated these false allegations in a recent AM report broadcast on 6 May, headed ‘Israel rejects UN Gaza report’. An editor’s note has since been appended to the transcript, but that is the limit of the ‘correction’ made to that. So there is still continuing promotion of UN allegations which have been proved to be false.

Mr Scott —I think, Senator, as you pointed out, we did correct that immediately on the record.

Senator TROETH —So that has been corrected?

Mr Scott —I think you pointed out the editor’s note there, Senator. I can get across the detail of that and come back to you on that.

Senator TROETH —That would be useful, thanks. I know this issue has been raised in the past but for those who see—and I am not necessarily one of them—a pattern of systemic bias in the ABC reporting on Israel, would you not agree that that failure, if that is how you can see it, adds fuel to that argument?

Mr Scott —I am not going to attempt to read into the minds or the motives of those who are providing criticism of this. Let me just say broadly, though, that the ABC takes its reputation for fairness, balance and impartiality very seriously. We are aware that coverage of issues that are as complex and as sensitive as the Middle East means that our coverage is highly scrutinised. I am not saying at any point that it is perfect or should not be questioned or challenged. I welcome robust debate around that. I welcome scrutiny of our performance. If in fact we do not always deliver to our high standards and expectations, then we need to improve our performance. I would say to you, though, that we are not defensive around this. I do receive correspondence from people who have been critics of the ABC’s Middle East coverage in the past, like Dr Colin Rubenstein, and Dr Rubenstein will at times point out concerns in our coverage and will at times point out things that he believed were strong and robust in our coverage. We are open to engagement around the issues. I suppose we could talk here about half a dozen issues more than any other that generate attention and scrutiny and debate. Often on these matters, Senator, I can tell you we are criticised on both sides. We have been criticised in our coverage of Israel and our coverage of the Middle East from both sides, and we need to engage with our critics. One of the things we are trying to do in this area is to actively engage with our critics, to listen to criticism, to test ourselves and to test our own standards. We have some external monitoring that is now happening of our work around different issues to ensure adherence to the editorial policies. We have a positive and robust process in place.

Senator TROETH —Where do the external monitorings report to?

Mr Scott —They report through me to the board and you will find outcomes of those editorial reviews listed on our website.

Senator TROETH —I see, yes.

Senator ABETZ —Has there been a requirement for any on-air apology or retraction or editor’s note in relation to a story that might be deemed as being too pro the Israel point of view?

Mr Scott —I would have to check on that.

Senator ABETZ —I do not think there is, but it would be very interesting because, Mr Scott, you do tell us from time to time that you get the criticisms from both sides of the fence.

Mr Scott —Yes.

Senator ABETZ —But it seems that apologies are required on only one side of the fence, which would suggest potentially that there is some basis to a degree of systemic bias in relation to the reporting of Middle Eastern issues.

Mr Scott —I am not aware of examples off the top of my head.

Senator ABETZ —Could you take that on notice?

Mr Scott —Sure, I would be happy to.

Senator ABETZ —Thank you.

Senator TROETH —Suppose a consumer wished to report what he or she considered to be allegations of systemic bias. I understand that the Independent Complaints Review Panel considers itself unable to respond to that, that it is not equipped to deal with allegations of systemic bias—is that correct?

Senator TROETH —They respond to specific complaints, not complaints in the general.

Senator TROETH —Yes, rather than general complaints?

Mr Scott —Yes, that is true.

Senator TROETH —I understand that ACMA has advised that they, too, are unable to consider allegations of systemic bias.

Mr Scott —ACMA also reviews specific issues, but I suppose I would simply argue that, if there are arguments about systemic concerns, they will be underpinned by specific examples.

Senator TROETH —Yes, of course, they would have to be.

Mr Scott —I think some of our critics have sent in a number of complaints around specific examples that we monitor. Can I say I think it is often a more meaningful debate and process when it is embedded in the particular, rather than in the general. It is certainly more meaningful for us in dealing with these issues.

Senator TROETH —Of course, anyone making these allegations would have to provide evidence to justify their concerns, but if the ICRP cannot do it and ACMA cannot do it, where would a consumer with those allegations underpinned by evidence go in order for the ABC to be accountable?

Mr Scott —They would go to the ABC’s Audience and Consumer Affairs Division in the first instance. Then they can appeal decisions, if they do not like them, to the ICRP or to ACMA, but they need specific examples. It is a little bit of a false dichotomy I think to say that they cannot bring examples of systemic bias, if that is what they feel. They can couch it how they like; they just need specific examples to bring forward and to review.

Senator TROETH —So they would make a judgment based on the specific examples—

Mr Scott —Yes, they would.

Senator TROETH —on a case by case basis, rather than attempting to prove a general principle?

Mr Scott —Yes, that would be right.

Senator TROETH —In your 16 October 2006 address at the Sydney Institute you promised no more bias and I do not—

Mr Scott —Is that a direct quote, Senator?

Senator TROETH —That is a direct quote apparently.

Mr Scott —Is it really?

Senator TROETH —Yes. I have got the web link for it if you want it.

Mr Scott —I do not know. I certainly did speak at length on the editorial policy and we are happy to talk about it again this morning.

Senator TROETH —All right, that is fine.

Senator ABETZ —Surely that should not be an issue, that you would not be biased.

Mr Scott —No, I draw the distinction between our goal and aspiration for fairness, balance and impartiality. I certainly do not want there to be bias at the ABC, but nor will I say to you that with 15,000 unduplicated hours of news and current affairs reporting, with 65 live microphones broadcasting ABC content every morning, with us taking content into 60 local radio stations and to 44 countries around the region, you will not be able to sit back and find some examples of where we fall short of our aspirational goal. I have never said that we are perfect; I have said that we are putting processes in place to deliver the best possible outcome for the taxpayers who fund us.

Senator TROETH —ACMA is authorised to review your compliance with your code of practice.

Mr Scott —Yes.

Senator TROETH —But it is not authorised to review the separate and non-identical editorial policies—is that correct?

Mr Scott —I think that is a fair interpretation, Senator.

Senator TROETH —What would be the reason for introducing the reforms by way of the editorial policies—which I gather is a new section, if you like—rather than through the code of practice?

Mr Scott —I am not sure the editorial policies are new.

Mr Green —No, the editorial policies have been in place for decades.

Senator TROETH —That is good. These are two parallel streams, are they, editorial policy and the code of practice?

Mr Green —The code of practice is required by the ABC Act and we have to place with ACMA a code of practice, as do other broadcasters. The editorial policy is a broader document that covers far more ground than the requirements of the code of practice.

Senator TROETH —You would not see yourselves as unaccountable?

Mr Green —Certainly not.

Senator TROETH —Mr Scott, you would not see yourselves as unaccountable?

Mr Scott —No, I believe we are the most watched, scrutinised and accountable media organisation in the country. I believe we are systematically reviewed. I am happy to appear before this hearing three times a year. I can point out numerous examples of where the ABC’s performance as a broadcaster is monitored and scrutinised and also where we systematically welcome that scrutiny.

Senator ABETZ —But you should be more accountable, do you say, than other broadcasters because you are wholly publicly funded?

Mr Scott —I think that is reality. That is why I think we are happy to come to this process and to talk about the decisions that we make.

Senator ABETZ —Are you really happy to come to this process?

Mr Scott —We are always delighted to engage with you.

Senator ABETZ —Good.

Senator TROETH —In reporting, as I see it, more widely one side of the argument in the Middle East rather than the other, as sometimes could be indicated—we would all agree that the Middle East question obviously arouses very strong emotions in viewers and listeners in Australia as much as anywhere else. We would not want to be seen fuelling either side of the very strong emotions; that is why I am anxious to get to the bottom of this.

Mr Scott —I would say, Senator, the ABC does not have a position; the ABC does not have a point of view.

Senator TROETH —It reports the news as it sees it.

Mr Scott —We respect that there are divergent viewpoints in the community and our editorial policies set out our responsibility to ensure principal, relevant viewpoints around matters of contention. I think if you look at the array of voices and discussions that we have on our programs, from radio current affairs, like AM and PM, from News Breakfast on ABC2 through to the 7.30 Report and Four Corners and Lateline, we can demonstrate in great detail the plurality and range of voices and views that are heard. A program like Q&A celebrates that diversity.

Senator TROETH —Yes, I have often watched it.

Mr Scott —So, Senator, that is our obligation—not to have a point of view, not to ensure that only one side is heard but to ensure that the plurality of views are heard, and we do test and monitor that.

Senator TROETH —I would be obliged if you would send me the result of the inquiry when it becomes available.

Mr Scott —I am happy to do that, Senator.

Senator TROETH —That is all, Chair, thank you.

Senator ABETZ —I will get started and see how far we get. One of the dangers of going to Aussie’s and buying colleagues coffees is that there are other colleagues from the house of reps who suggest questions to you. One question that was suggested to me was that during the last election ABC had SMS alerts for news items; is that right?

Mr Scott —That would probably be right, Senator.

Senator ABETZ —I think I have asked questions about this in the past but I confess my memory fails me. Are the texts that were sent out somehow retrievable? Can we be provided with what those texts said during the 2007 election period?

Mr Scott —Senator, I do not recall us discussing it but let me take that on notice and see what we can find.

Senator ABETZ —If you could, I would be much obliged. Can I take you to the Hansard of Monday 23 February 2009, where we were discussing Q&A.

Senator Conroy —How many times have you been on it?

Senator ABETZ —Not at all, Senator.

Senator Conroy —Really! Even I will defend Senator Abetz at this stage. Senator Abetz needs to be on TV more.

Senator ABETZ —I have not been seduced, you see, by being invited to be a guest. Can I take you to the bottom of page 52? You will recall we had a discussion about how you were seeking to recruit more coalition supporters into the Q&A audience. Turning to page 53, about half way down the page, at the time I said:

Mr Scott —Yes.

—You took that on notice, kindly provided me with answers, and the emails that were sent, and I thank you for that. Can I tell you I think my suspicion has now been verified that in fact the emails that were sent out did not make any suggestion or hint that you were in fact looking to recruit more coalition supporters; is that correct? Have I read the emails correctly?

Mr Scott —Senator, I have some updated information for you on the Q&A audience.

Senator ABETZ —Thank you for that, but before we go onto that and you distract my attention, can I ask you to please answer the question as to whether the emails that were sent out and in fact the quote ‘in order to recruit more coalition supporters’ was in fact taken by me out of a written answer provided by the ABC, and it was then that I followed up, asking for the exact emails.

Mr Scott —Yes.

Senator ABETZ —And none of the emails, as I read them, actually make the suggestion that they are looking for more—

Mr Scott —That is true, Senator, the example I think we gave you where we said we would like to invite members of the University of New South Wales Liberal Club to the audience, we would talk about what they are doing—

Senator ABETZ —Mr Scott, with great respect, I agree that the Liberal Club, chances are, would provide us with coalition supporters but what I took you through was the Sydney University Politics Society, the Australasian Union of Jewish Students, PricewaterhouseCoopers, Ernst & Young, Mallesons Stephen Jaques, Brown Wright Stein, business groups including the Sydney Chamber of Commerce and a variety of others, and we were provided with that list as an example of you trying to get coalition supporters.

Mr Scott —Precisely, Senator, and the result of which has been a systematic attempt by the producers of Q&A to ensure that there are a plurality of views evidenced in the audience, and that has worked, Senator.

Senator ABETZ —And I congratulated you last time on that and I congratulate you again in anticipation—

Mr Scott —In anticipation of the data.

Senator ABETZ —In anticipation that you will be able to confirm that that trend is continuing—

Mr Scott —And you now have it.

Senator ABETZ —And if you would like to do that now, that would be good, in relation to audience splits.

Mr Scott —Okay.

Senator ABETZ —Whilst you are giving us that information, could you please think about an answer as to why you asserted that these groups, such as the Australasian Union of Jewish Students, were written to or emailed specifically in order to recruit more coalition supporters? Because the emails did not ask for more coalition supporters; they were generic. I just want to know who the brains trust was within the ABC that lumped in the Australasian Union of Jewish Students as being a hotbed of coalition supporters along with the Sydney University Politics Society. Clearly, the answer that you provided on that occasion, could I suggest to you, was wrong and did not do those organisations, which pride themselves on being apolitical, any justice.

Mr Scott —Yes. Senator, if my comments at our previous meeting suggested that only Liberal Party supporters were found in those law firms or accountancy firms or political groups, then that certainly was not my intention, and nor do I think that was the understanding of those from Q&A. As we pointed out previously—

Senator ABETZ —The written answer said, ‘In addition to the list of groups provided at the hearing, the producers of Q&A have contacted the following in order to recruit more coalition supporters.’ That was the written answer provided—no verballing, no ability to be misunderstood—and then the list includes those that I have just mentioned.

Mr Scott —Yes.

Senator ABETZ —The Sydney University Politics Society, the Australasian Union of Jewish Students, et cetera.

Mr Scott —I accept that, Senator. The aim of all this activity, as you know—there are some interesting things about pulling together a program like Q&A. One of the reasons it is very successful is that it is live, it is not pre-recorded, and for it to be done live, particularly at our studios at Ultimo in Sydney at 9.30 pm on a Thursday night, as Senator Conroy and Senator Minchin would know—

Senator Conroy —I was lucky enough to do the Melbourne live.

Mr Scott —You did the Melbourne live?

Senator Conroy —The same night as the Carlton-Richmond match.

Mr Scott —And it held up very well in the ratings, thank you, Senator; we appreciate that. We need to get a live audience out. We are aware that there could be organisations or groups that want to place themselves in our audience, so we have tried to reach out. We do ask people who turn up their voting intention, and of the 2½ thousand people who have been in our audiences so far this year, 16.6 per cent have declined to give their voting intention. Of those who have given their voting intention, 34.4 per cent have indicated they are supporters of the coalition; 33.9 per cent, ALP; 12.8 per cent, Greens; and 2.4 per cent, other. The aim is not to nail the numbers of the last Newspoll; the aim is to ensure that there are representative and divergent views that exist in the audience. I think they have done a great job and—

Senator ABETZ —Can I accept that, Mr Scott, and save you providing further support for that position. Senator Conroy, I supported and congratulated the ABC and Q&A in relation to getting their audiences more balanced, but I have got a funny hunch that unless certain questions were asked at Senate estimates that would not necessarily be the case. Nevertheless, I congratulate Q&A again for having done so. In relation to the list of organisations, I just think possibly the record ought be corrected in relation to those organisations that do pride themselves on being meticulously apolitical.

Mr Scott —I accept that, Senator. I am not—

Senator LUNDY —This is ridiculous grandstanding by the Liberals once again. I would like to acknowledge the efforts the ABC has gone to doing things like Q&A because it is enhancing people’s ability to participate in our democracy. I find the line of questioning to be gratuitous as usual.

CHAIR —Thank you, senators.

Senator ABETZ —I am sorry, but the ABC actually agrees me, Senator Lundy—

CHAIR —Senators, we are now going to break for lunch, thank you.

Senator ABETZ —and your defence of the ABC is a bit over the top there.

Proceedings suspended from 1.02 pm to 2.02 pm

CHAIR —We will resume with questions from Senator Abetz.

Senator ABETZ —Thank you. In relation to Q&A I have just one final issue. Did we agree that you might do something in relation to those organisations that may have been seen as being a hot bed—if I can use that term—of coalition supporters? I would just like to clear it up for the public record that the ABC, in fact, does not see them as such? I would like them to be, so do not get me wrong.

Mr Scott —As I stated on the record before lunch, if there was any suggestion that in writing the letters, and as a reflection of our correspondence and our discussion in February, I thought that those organisations were only made up of Liberal Party supporters, then I am happy to set that record straight. Of course, I would have been happy to have done that in any correspondence that any of those groups sent to me. I am not aware of any correspondence or concern from any of those groups that was expressed to me but, if there was, I would be happy to do so in writing to them.

Senator ABETZ —I will just indicate that if Q&A keeps on going as it is, I doubt there will be questions at the next estimates. Let us hope that things are good.

Senator CORMANN —Especially if any of it was filmed in, say, Tasmania.

Senator ABETZ —That brings me onto an issue, in fact. I understand Mr Jones did a filming in Melbourne. Is that correct?

Mr Scott —He did, with Senator Conroy, and in Canberra.

Senator ABETZ —I am just wondering, if your staff are required to stay overnight somewhere, would they be paid a travel allowance?

Mr Scott —I imagine that would be the case.

Senator ABETZ —Is that a fixed rate?

Mr Scott —It is a fixed rate, yes.

Senator ABETZ —Are you willing to share with us what that is?

Mr Pendleton —We have not got that with us. Generally the accommodation is paid direct off our procurement cards and then there is a per diem for meal allowances. It is based on the standard government rates.

Senator ABETZ —That is a bit like ours. I suppose what I am hinting at with that, and it only came to my mind then, was that Senator Conroy mentioned the Melbourne episode. It is nice to know that journalists get fixed rate travel allowances as well before they comment on other people’s fixed travel allowances. I will just leave it at that. Allow me to move on to Hansard ECA38 and question No. 86. The topic was on-air apologies. In fact, it might follow on from Senator Troeth’s bracket of questions, albeit mine are related to forestry. Can I just have it confirmed that no apologies have been required for stories being pro-forestry or biased in favour of forestry?

Mr Scott —Yes. The answer to question No. 86 summarises that.

Senator ABETZ —Which is that there have been no complaints requiring any adjustment.

Mr Scott —I believe that is correct.

Senator ABETZ —Thank you. In the answer to question No. 86 you kindly provided me with a table of on-air corrections and apologies for the two calendar years 2007 and 2008. Is that correct?

Mr Scott —Yes, that is right.

Senator ABETZ —Just reading the second and third columns we are told the date of broadcast and the date of correction and apology. Without being too tedious, the first one is on the same day, the second within five days, the fourth one within three weeks, the fifth one within one week, then one week, one week, then interestingly, a three month delay, and that was a Middle East issue, but we will not go there. The next one is a one-week delay. The next one is a one-day delay. The next one is five-weeks delay. Even the Corby dad was linked to the drug trade and that took two months. The next one is three days, one day, two months, nine days, but there was a stand-out, wasn’t there, with the fourth one?

Mr Scott —Yes, I believe we have discussed that.

Senator ABETZ —It took 18 months before we finally got the on-air apology. Whilst it is tedious for me and for my colleagues, from time to time, to have to ask these questions and get it all tabulated, I suppose what this highlights to some of us is that on certain issues, for whatever reason, it seems to be very difficult to get an on-air apology and, of course, when it is 18 months after the event you could pretty much say that it is a bit too late for an apology in general terms. It is always welcome. Would you agree with me that I have read those tables correctly?

Mr Scott —Yes. Your suggestion is that it is to do with the issue. There is another one on that list where something was broadcast in relation to Gunns on 7 May 2008 and the correction was on the next day. The one that you are referring to, which relates to the scallops industry, as we have discussed in the past, there was significant debate and a series of appeal processes that took place through that, and it was at the conclusion of those processes that we did, in fact, run that correction.

As I said earlier to Senator Troeth, we often try to immediately correct if we are aware of a mistake and that mistake is not in dispute. Sometimes we will have reviews and investigations into it and at the end of that, we will run a correction. With this circumstance it went through quite a long course until the correction was run. I do accept that is what the data shows.

Senator ABETZ —Would you accept that, in general terms, an 18-month delay is not good practice?

Mr Scott —I would accept that.

Senator ABETZ —I would like to move on. My concern about bias in reporting of matters of forestry also motivated me to put on notice question No. 1228. I would like to publicly apologise to the ABC personnel that had to put all this together, but unfortunately it paints a picture. I would just ask you whether I am reading this correctly. When I asked about a particular forestry protest, I asked:

I am told that there were 100 stories, with 54 including comments from protesters, representatives of protest groups or Greens representatives. I also asked:

Guess what the answer was?

Mr Scott —Twenty-three.

Senator ABETZ —Yes, 23. Basically twice as many grabs—in fact, more than twice as many grabs—from the anti-forestry lobby than the pro-forestry lobby. You might say that is just one statistic. I accept that, but I asked a few other questions like lengthy interviews. We are told that in that period of time six lengthy interviews were held. I asked about the split-up. Guess what, four with protesters and two from the pro-forestry. You have once again got a huge bias in favour of the protesters. I then asked the question:

Once again, it is not surprising those four interviews have 40 per cent more time allocated to them than those that support the forest industry. It seems that no matter which way we look at it, news stories, the news grabs, are completely slanted in favour of the protesters. The actual interview numbers are slanted in favour of the protesters. The time allocated to the interviews was slanted in favour of the protesters. I can accept that one swallow does not a spring make, but do you understand that some of us who have an interest in forestry matters see that revealed in these figures is a systemic bias of anti-forestry reporting by the ABC?

Mr Scott —No, I do not. Let me attempt to explain why. The ABC does not attempt to present pro-forestry or anti-forestry stories or viewpoints. Our responsibility is to ensure the plurality of viewpoints, a range of debates, around a contentious issue in Tasmanian society is heard. At no point in our editorial policies does it say that we should have a stopwatch on and balance up time. What it says is: is the range of views being held represented? Even if you go into the points that you made, you are right in that there are 54 interviews that included comments from protesters or representatives of protest groups. Twenty-three included comments from Forestry Tasmania. Five stories included the fact that representatives of Forestry Tasmania were contacted and they did not seek to comment at that time. Thirty-nine included comments from the police or the police minister involved in what was a very significant protest with some serious contention that was taking place on the line. You did not mention the reference to the police in your analysis, but that was part of the material that we gave you.

Our test is this. Was the debate well covered? Were different views in evidence on air? Your analysis, even on the amount of time allocated to stories, the longest interview and the third longest interview of the six you outlined were from representatives of the forest industry, and I would not even draw too much from that because, as you would know, somebody can be on air, have an interview and walk off and think that was a tough or demanding interview or a forensic cross-examination.

I think it is very important that we do not take one slice of numbers and attempt to draw too much from it. Our tests are: were the principal relevant viewpoints and the coverage of these issues aired? Did we have the full range of voices? Did we cover this not only as a matter that was affecting the environment but a matter that was affecting business and the operations of the police in the state? It lasted over a period of time and there was a range of stories. Did the complete picture get put to air? In our analysis, yes it did.

Senator ABETZ —With great respect I would suggest to you that I did not slice the numbers only one way. I have given you statistics in relation to news items, interviews and the amount of time. Surprisingly, everything is skewed one way. It is like complaints and on-air apologies all skewed on the anti-forestry side yet again. There is a picture now being painted. Mr Scott, if you and the ABC cannot accept that, to be kind, there is some skewing—I will not say inadvertent because I believe it is systemic—in the ABC, then we have a clearly fundamental different interpretation of the statistics.

If you were to say to me, ‘The number of interviews on air in the morning and afternoon programs favoured pro-forestry, but the news stories favoured the protesters’, I could accept that, but every way you look at it on-air apologies were needed all because the anti-forestry side was put too hard. The news items are clearly slanted in favour of anti-forestry. The number of on-air interviews is slanted in favour of anti-forestry. The time allocated is slanted in favour of anti-forestry. What more do we need to present to you? In answer to Senator Troeth you indicated that systemic concerns, if they are expressed, need to be underpinned by specific examples. I have today presented you with a welter of specific examples, but the ABC still seems to be in denial.

Mr Scott —What we do is review our coverage in light of the tests that are approved by our board and spelt out in our editorial policies. We would have a problem if the principal relevant viewpoints on the debates in contention had not been heard. If, in fact, the voices representing different perspectives from the pro or an anti-forestry group, environmental groups or if the police were not effectively covered, but we can demonstrate to you very systematically through the data that you have outlined that those views were heard. If you are going to start slicing the numbers that way and draw too much from it, then I would say that significantly the longest interview we held on this matter was from someone from the forestry association and the third longest one was as well. I do not think you can draw too much from it.

Surely, it also comes to what questions were being asked and the nature of that engagement. I would say that the very fact that around 40 per cent of these stories had interviews with the police and the police minister around this matter indicates that you would suggest that certainly in those stories a range of views were being heard. I do not think that you can draw too much from the data. We do not just look at that data. When we have complaints or we have reviews we look at the substance of the interviews that are being covered—not just who appeared where, but the substance of those interviews as well, against the test that is spelt out in our editorial policies.

Senator ABETZ —If you want us to do an analysis next time of the friendliness or otherwise of the questions in each of these interviews, I can tell you that I have no doubt what it will show yet again, and then there will be a fifth arrow in my quiver pointing out the systemic bias in the ABC. The fact that none of these figures concern you is a matter of concern to me. Whilst I can understand that the number of interviews or number of news stories of themselves does not necessarily indicate systemic bias, when you can specify, as I have just done, four specific areas where everything is weighted in favour of anti-forestry propaganda, let me say to you that I think a case has been made out. Any one of us in public life, in general terms, if you were to be told at about 9.30 one morning you can be given six minutes on air or you can have two minutes on air, and the next day another two minutes on air, and the next day another two minutes on air, most of us would choose to go on air three times at two minutes a piece because you will reach a much greater audience. To try to say that the lengthiest interview was with forestry makes me think that somebody is saying, ‘Oops! The numbers are getting a bit skewed here. We’ll let somebody run on with the six minutes’, and not put them on a regular basis throughout the various daily programs.

Mr Scott —I was trying to point out that a simple slice of the numbers can be over interpreted. The length of an interview is no indicator whatsoever of balance; there is a range of factors that we look at. I go back to what I was saying to Senator Troeth earlier. We are well aware that this is an area where there are strong views, passionately held views, and divergent viewpoints. The ABC does not aim to take sides in that. The ABC attempts to report the facts of the matter and I am sure all the relevant viewpoints are heard. I can assure you that our coverage in this matter, along with the Middle East issues, has been watched very closely by all sides and that we are in ongoing dialogue with some of those people. We are aware of this. We aspire to fair balance and impartial reporting. That is what we seek to do. What I am disputing here with you, I suppose, are the conclusions that you draw from this data which I think overreach what the data is saying.

Senator ABETZ —Can you tell me what objective evidence you would point to that says that this issue of the forestry protest in Tasmania that I specifically refer to was covered fairly when you have agreed that in general terms all apologies and complaints have been in relation to overcooking the antiforestry stories, that the news items have all been skewed substantially in favour of antiforestry stories, the numbers of separate interviews have been skewed in favour of antiforestry and the time allocated to these interviews has been skewed in favour of antiforestry. If it were just interviews, if it were just the time, if it were just the news bulletins, if it were just apologies, I would have to say chances are you are right, but when every one of the objective and quantitative measures that we can use all skew in one particular direction, it sort of beggars belief that you and the ABC are not willing to admit that there is something amiss in the way that the ABC tends to cover stories, keeping in mind the discussions we have previously had with Lords of the Forests, the 7.30 Report and nothing on the other side of the ledger to balance these things out. If you had mucked up two pro-forestry stories requiring an apology and two antiforestry stories, I would have to say to you that chances are they are just honest mistakes where people are overstepping the mark. But everything is skewed the other way in the facts and figures before us today.

Mr Scott —I have a few points to make. Again, I simply do not believe that the data we gave to you for the question on notice adds up to the conclusion that you are drawing. Nor do I aspire to any breaches of editorial policies one way or another. What I aspire to is coverage that is fair, balanced and impartial. Are you aware of Mr Barry Chipman?

Senator ABETZ —I am indeed aware of Mr Chipman.

Mr Scott —So am I. I have met with Mr Chipman and discussed these matters with him. He is from Timber Communities Australia. As recently as last week he was in contact with our office congratulating the ABC on what he believed was a fair, balanced and impartial report on the contentious pulp mill at Bell Bay—

Senator ABETZ —Does that not sound alarm bells to you—

Mr Scott —No, no, certainly not.

Senator ABETZ —that somebody has to ring you and congratulate you when it should be a matter of course and everybody should be expecting that in the—

Mr Scott —I think that is absolutely right. Mr Chipman has had concerns in the past and I have met with him, and I met with him over that scallops industry issue that we discussed. I have welcomed him as groups on either side on a number of contentious issues and will continue to correspond. But I am saying that what we seek is an outcome that is fair, balanced and impartial, and that is what we are pursuing.

Senator ABETZ —Let us leave it that. I can understand that you say ‘fair, balanced and impartial’ but when all the figures indicate that it is not fair, that it is not balanced and it is not impartial, with great respect, you cannot keep repeating those descriptors when all the evidence and all the numbers showed an unfairness, an imbalance and unfortunately partiality.

Mr Scott —As I have said, as we review these matters the number of appearances and the amount of time on air are not the criteria that we are using. The criteria that we are using are that we are fair, balanced and impartial and that principal, relevant viewpoints have been aired. It is not as though we do not review our forestry coverage, because we do receive complaints. As we receive complaints we do review it. If there are problems, if there are breaches or errors to be found as was the case with the scallops industry, then we admit to that. We have been—

Senator ABETZ —Eighteen months later.

Mr Scott —We have been breached, as was the case with the Lords of the Forests, so it is not as though we are not engaged—

Senator ABETZ —But it takes a long time with forestry matters—

Mr Scott —With fairness, sometimes it takes time but at other times, as was the case with the Gunns correction I spoke of earlier, as was the case with another—

Senator ABETZ —That was a practices issue which was—

Mr Scott —But there was another issue quite recently also to do with a report on the forests industry that we corrected quickly and which we continued to review, so we do do that.

Senator ABETZ —I welcome that if there is a trend going in the other direction. Can I quickly ask you some questions about Mr Peter Lloyd?

Mr Scott —Yes.

Senator ABETZ —There was some suggestion that he might be re-employed by the ABC and that he might be discharged from his imprisonment some time this month. Where are we at with Mr Lloyd?

Mr Scott —Mr Lloyd is still in prison. I have no further detail on when he might be released. He is not an employee of the ABC.

Senator ABETZ —I in fact asked whether his employment had been terminated and the answer came back that it was ended—

Mr Scott —Yes, frustration of contract.

Senator ABETZ —So it was not terminated?

Mr Scott —No, it was frustration of contract. He could not complete his work.

Senator ABETZ —This contract had been frustrated already for some considerable period of time—

Mr Scott —No, he was on leave. He was on extended sick leave, I believe.

Senator ABETZ —Whilst he was on remand in prison in Singapore; is that right?

Mr Scott —I believe that is right.

Senator ABETZ —The ABC provided him with sick leave.

Mr Scott —He was on sick leave, yes.

Senator ABETZ —Before his arrest he was not on sick leave?

Mr Scott —Yes, he was.

Senator ABETZ —He was on sick leave—

Mr Scott —He was on sick leave at the time of his arrest, I believe.

Senator ABETZ —You believe?

Mr Scott —I believe that is right. As I recall, he was in Singapore seeking medical treatment at the time.

Senator ABETZ —That is different to whether he was on sick leave, so if you could please take that on notice and in fairness, if he was actually on official sick leave, that may then obviate—

Mr Scott —I will be happy to correct that, if necessary.

Senator ABETZ —Do we know when he actually pleaded guilty?

Mr Scott —I would have to check those dates.

Senator ABETZ —Because there was some media suggestion in the Australian on 5 November that he had agreed to plead guilty to charges in return for some more serious charges being dropped. I was wondering if that was known to the ABC management by 5 November 2008 or shortly thereafter and, if it was known that it was his intention to plead guilty whilst he was in remand, why was he continued in employment until 3 December?

Mr Scott —Let me check on that.

Senator ABETZ —If you could. Then also there were media reports suggesting that the ABC may re-employ Mr Lloyd. Is that still on the cards?

Mr Scott —I have not been in contact with Mr Lloyd whilst he has been in prison. When Mr Lloyd is released, having served his sentence, I think where he wants to live and what he wants to do will largely be a matter for him. If Mr Lloyd wants to talk with us about a position that is suitable for his skills and experience we will consider that at the time, but there has been no commitment given or undertaking given. But the only thing I would add is that if Mr Lloyd has served his sentence then I do not think it is inappropriate for us to have a conversation with him at some point.

Senator ABETZ —I would happen to agree with you on that. I actually strongly believe in people being able to restart their lives and rehabilitation et cetera. One thing I would put to you is that people in the media to a certain extent are like sports figures. People do tend to look up to them, and having an involvement as he had with certain illegal substances, had he partaken of them in Australia, they would have been illegal here in Australia as well, as I understand it. I just think that there is a requirement on the ABC to ensure as much as you ever can with these things that the likelihood of reoffending in that regard is minimised. If the man is over his problems in relation to the illegal substances, I would say that is great and allow him to start his professional life again. I have no complaint against that. I would in fact in general terms encourage that sort of approach. But, on the other side of the ledger, I think given the high profile of media people there is a need for the ABC to ensure as much as they can that the likelihood of reoffending in that regard is minimised.

Mr Scott —I understand that view.

Senator WORTLEY —The ABC’s triennial funding submission was considered in the context of this year’s budget. I would like you to answer the question as to how the increase in the funding in this budget compares to the funding the ABC has received over the last few years or in recent years in the budget.

Mr Scott —As we said at the time, this is the biggest funding increase the ABC has received since becoming a corporation back in 1983. There was an increase in funding for Australian drama in the last triennium but really before that it has been many, many years since there has been a real level funding increase but there has been certainly no funding increase in recent memory of anything like the scale that we received this time. Given the very difficult budgetary circumstances the government found itself in—as we said, at the time that we started talking here in Canberra about our triennium funding bid, there was a $20 billion surplus; now there is close on a $60 billion deficit, so we appreciate there are very different financial circumstances—we were very pleased in those circumstances to achieve the funding that we got for drama, for children’s content, for capital and for broadband.

Senator WORTLEY —In terms of funding for basic operations, especially content creation and programming, is this funding allocation adequate to enable the ABC to maintain its core services?

Mr Scott —We described it as a very significant down-payment on the future of the ABC. Of course, everyone understood we did not get everything we may have wanted or liked this time out, but it was a difficult budgetary environment. We received some indexation increase but in new service areas we are really very pleased about what we are going to be able to offer. There is going to be a dramatic increase in the levels of Australian drama on ABC television. That is going to ramp up over the triennium. We will be doing that in concert with the independent production sector, and Australians will see on ABC television a very significant increase in quality Australian drama. We expect a children’s channel will be on air by Christmas, commercial free, available in every Australian home with digital television. We will be increasing the levels of Australian content on that channel as it gets into full swing as well.

Senator WORTLEY —Would you be able to take us through the plans for the ABC’s children’s channel and just perhaps provide a little more detail?

Mr Scott —I am happy to. As I said, ABC3 will be on air by Christmas. We expect it will initially operate between six in the morning and nine at night. We are already working with the independent production sector to increase the commissioning of content. There will be drama content, factual programming for children and increased news content for children. BTN really provides a remarkable service by the ABC out of Adelaide. We will be extending the amount of programming that BTN does, including appropriate news programming for primary school children as well. We will be commissioning and acquiring a range of content from internal sources, the independent production sector and the best that we can acquire from overseas as well. That work is currently underway.

We think we will employ around five dedicated commissioning editors and programming and acquisition staff. Advertisements for those positions ran in the press last weekend, so we are looking to get it underway. If, when it boils down through analog switch-off and into digital television, Australia has somewhere between 15 to 20 free-to-air channels, we think it very appropriate that one be a children’s channel. One of the things we are trying to do with the programming around this is to particularly target those children for whom free-to-air television is not currently delivering, so there will be a focus in our programming on shows for primary school children and children in their early teens. There will also be programming for families to watch together, particularly in the early evening.

The ABC, of course, is very strong in preschool content for kids. We are going to broaden out the opportunities on this channel a bit, whilst maintaining a children’s program on ABC2 and the main channel as well.

Senator WORTLEY —How much local Australian-made content will the children’s channel produce and screen?

Mr Scott —We are shooting for a 50 per cent target. We are going to have to build that up over time. The funding comes in over time. Some of this will be programming that we commission and run. There is also, we think, a very significant slate of high-quality children’s programming that has been created under the regulatory environment that currently exists for commercial TV that has only been aired once. Our partners in this in working and thinking it through have been the Australian Children’s Television Foundation. They have been behind funding a number of those programs. We are keen for those to come to light as well. But our aim is for 50 per cent. It depends a little bit on the final mix of programming that you put to air, but that is what we are working for as the channel gets fully operational.

Senator BIRMINGHAM —Is that 50 per cent target in the current triennial funding agreement?

Mr Scott —Our bid had us reaching that in the fourth year. We will see what the funding does. But we will have a better idea once the planning and commissioning process properly gets underway.

Senator WORTLEY —What will this mean for children’s programming on ABC1 and ABC2?

Mr Scott —At the moment we plan to keep our programming as currently exists on those channels as is, particularly ABC1. We recognise, as I was saying to Senator Lundy earlier, that whilst digital television is growing quickly there are still millions of households that do not have digital television. I expect the phone calls from parents if we took the children’s programming off ABC1 would be deafening. But that will not always be the case. Come 2013 and analog switch-off, it really will not matter which channel you run this programming on because everyone will be able to get all channels. But at the moment we are keeping the children’s programming in the morning and the afternoons on ABC1 and during the day, particularly for preschool children on ABC2, and then we will run the ABC3 kid’s content.

Senator WORTLEY —Could you run us through where the children’s channel will be located and also then move on to how many jobs you expect to be created? You mentioned five programming jobs—

Mr Scott —Yes.

Senator WORTLEY —How many jobs would be created as a result of launching the new channel?

Mr Scott —We will be drawing content from around the country for the children’s channel. As you know BTN currently operates out of Adelaide. RollerCoaster currently comes out of Perth. We will be doing some in Melbourne. We do children’s programming currently in Sydney also—so around the country. The real thing about employment is not the number of staff that are employed at the ABC but the opportunities that will exist in the independent production sector from this work. We are identifying five additional internal ABC staff members dedicated specifically to the children’s channel. There will then be increased activity that will then flow through other parts of the ABC, but the real growth with the independent production sector where a lot of this work is being done. If you want a further breakdown, we may be able to provide you with some details on notice on that.

Senator WORTLEY —I would appreciate that if you could take that on notice. In relation to the five programming production positions, will they be located in one location or—

Mr Scott —I would have to come back to you on that. I think we are still working that through.

Senator WORTLEY —Could you take that one on notice as well?

Mr Scott —Sure.

Senator WORTLEY —I am assuming you have had discussions with the independent production sector.

Mr Scott —Yes.

Senator WORTLEY —Have they given you an indication as to the number of jobs that are likely to be created through the commissioning of Australian children’s television content?

Mr Scott —I would have to check on that detail and come back to you if I can.

Senator WORTLEY —I am assuming you have the figures here—I think I may have seen these in a report—but how many hours of original Australian drama were broadcast annually on the ABC on average over the last decade?

Mr Scott —I do not have the full breakdown year by year. I will be able to provide that to you. It got very low around 2005. I think it was less than five hours. That, of course, is because drama is so very expensive to make, particularly the kind of drama that we are keen to make—high-quality and distinctive drama. The cheapest drama to make is the long form, where you are really making five episodes a week and running it for 45 weeks a year. That is not the drama that we have really focused on making in recent times. It got very low. We have built it up to more than 20 hours now and, of course, we will go a lot higher with the additional funding that has come in.

Senator WORTLEY —How will the funding allocated in this budget allow the ABC to increase its annual output of original Australian drama?

Mr Scott —There are a number of ways. It will allow us to do things in terms of the amount of programming and the style of programming that we commission. We are looking to produce a rich mix of new drama across a range of genres, including miniseries, telemovies and short-run series. We are also going to put money into feature movies and buy an early window to broadcast those on ABC Television.

As you would be aware, the Australian film Samson and Delilah won a prize at the Cannes film festival overnight. The ABC will be showing that on ABC1 later on this year because of an early investment that we made. We will be showing it to Australian audiences on ABC Television before it is even released on DVD after its cinema release.

There will be a range of different funding options that we put in. One of the things that we have said, and have already demonstrated through our drama investment, is that there can be a significant multiplier on the money that the ABC puts in in partnership with the independent production sector. We put money in. The independent producers put money in. There might be other funding that is attracted from Screen Australia or state based film authorities, all of which allows us to leverage our money very significantly. There will be a very significant leverage that comes to bear on this additional drama money that we have. The money is coming through. It is being ramped up over the three years. It will only be in full swing in the final years. That is not a bad thing in that it does give us time to get the commissioning underway. There is quite a long lead time in the drama.

Senator WORTLEY —Roughly how many hours of original Australian drama per year does the ABC anticipate being able to produce?

Mr Scott —As the minister pointed out, we are shooting for a 90-hour target. Finally, it will come down to the mix of programming that you elect to put together. We will be putting that programming to air across ABC1, ABC2 and ABC3. For the first time we will be commissioning some new drama content for ABC2, and of course the children’s channel will give us the opportunity to create some first-run drama on ABC3 as well. There will then be a very significant increase in the drama levels available on ABC1.

Senator WORTLEY —Will all new ABC produced Australian drama be broadcast first on ABC1?

Mr Scott —Not necessarily. We are already commissioning some programming that might run on ABC2. We are trying to do some different things with ABC2. We can already see it is attracting a younger audience. You can see this through the BBC’s multichannel strategy; the BBC has been able to experiment more with some of its programming out on BBC3 and BBC4, which attract younger and smaller audiences. We are already in the process of commissioning a drama series for ABC2 that we think will be very appropriate for that audience there. The other thing that we have done is we have commissioned some programs that have premiered on ABC2 and then received a later screening on ABC1. I expect you could see a little more movement between the channels.

Senator WORTLEY —Do you see programs being made specifically for ABC2?

Mr Scott —Yes, that is right. We are in a unique position to do that. At the moment our competitors Channel 9 and Channel 7 have not released a multichannel strategy yet. Channel 10 has, which is all sport. With our multichannel strategy you will see drama across all three of our networks, not just on one.

Senator WORTLEY —When can we expect to see the first new Australian drama production going to air on the ABC resulting from this funding increase and on which channel will it be?

Mr Scott —It will mainly be on ABC1. We have a number of new dramas that are coming up now. There are some that will go to air this year. We are commissioning some projects now that you will probably see on air next year. As you know, there is quite a long lead time with drama in casting, planning, pre-production, filming and then editing to get to air. We will be looking to increase our drama numbers with the pipeline that we have already got in place. You will not see anything on the air in 2009 that is directly correlated to this funding. It will be 2010.

Senator WORTLEY —In relation to the new productions, will they be distributed between the states in terms of production or will they be coming from one main location?

Mr Scott —You will find with the drama that we are already doing now that we want to reflect the breadth of the country. If you look at the drama that we have done in recent years—East of Everything filmed on the north coast of New South Wales, Bed of Roses in Victoria, Rainshadow in rural South Australia—that is what I think you can expect to see. A Brand New Day is another feature film that we have bought an early screening of and was filmed in Broome. I think Samson and Delilah was filmed in South Australia. I would need to check that. We will be looking to reflect the country. A lot of drama now, particularly the sort of drama that we are making, is not shot in studios. They are not studio bound. You are really getting out there on location, and that location will reflect the stories and the nation.

Senator WORTLEY —Chair, I do have other questions of the ABC but not on that topic.

CHAIR —We will go to another senator. Are there any further questions on this issue?

Senator MINCHIN —I am interested in a bit more detail on the funding for these new activities. You have been granted an additional $150 million over this triennium, but nearly half of that is in the third year. It ramps up quite dramatically to $65 million in the third year. In effect, given this capital funding of $13.6 million out of that—

Mr Scott —Yes, that is the first year.

Senator MINCHIN —That is all going in the first year?

Mr Scott —Yes. The capital allocation is for year one only. There are discussions going on with the Department of Finance and Deregulation, in a sense, on their policies, Operation Sunlight that you are fully aware of, and how that relates to an independent body such as the ABC. The ABC will certainly be making submissions around our capital needs for years two and three.

Senator MINCHIN —It is essentially about $136 million?

Mr Scott —Yes.

Senator MINCHIN —What is the break between the children’s channel and your production? What is this children’s channel going to cost in a normal full year of operation? If we take year three, I presume it will be a normal full year.

Mr Scott —I think it depends. It moves to $25 million in a full year, and we will be able to get the children’s channel comfortably on air there. After that, in subsequent years, it will depend on your mix of Australian context fundamentally. That is $25 million.

Senator MINCHIN —Do you think you can run this station for about $25 million a year?

Mr Scott —Yes. That is not to say—and the minister will understand this—that additional funding would not create additional opportunities, particularly around your content mix down the track.

Senator MINCHIN —Yes. It is a function of local content, I presume.

Mr Scott —That is exactly right. That is the big driver on this.

Senator MINCHIN —But for that 50 per cent—

Mr Scott —We are shooting for 50 per cent. It will depend finally on the mix of the dollars.

Senator MINCHIN —Let us say you target 50 per cent, what does indicatively does that mean for the annual running cost of this station? You are ramping up to $65 million a year in 2011-12 and presumably you will want to maintain that additional funding from then on.

Mr Scott —That is true. Yes, it is $25 million.

Senator MINCHIN —To get going, yes.

Mr Scott —That $25 million will get us the children’s channel.

Senator MINCHIN —What is the level of local content?

Mr Scott —We are shooting for 50 per cent.

Senator MINCHIN —Is that $25 million in the first year?

Mr Scott —No. It is $25 million in the third year. It goes $19 million, $22.5 million and $25 million. In the third year it is $25 million and that is where we would hope that we would be able to have our leverage on our Australian content operating right; we are trying to be at 50 per cent.

Senator MINCHIN —The other $40 million in 2011-12 is for your drama?

Mr Scott —That is drama. The drama goes $10 million, $20 million and $40 million. In a way that long lead time is for drama. We are now putting on screen drama proposals that I recall being talked about in my first six or nine months at the ABC. It takes a long time to ramp it up. We are comfortable with the ramp-up that the drama activity implies over the three years.

Senator MINCHIN —On that basis, for all of this to make sense you would need to maintain funding in the next triennium at that sort of level. Otherwise this is all a waste of effort.

Mr Scott —Yes. I think there would be no surprise that our argument would be that this is a terrific achievement in terms of Australian content and the kind of Australian content that the ABC does best, around children’s and drama. I think the arguments around the ABC being in a unique position to deliver that content will only get stronger over the triennium. I think the sort of pressure that commercial television networks find themselves in, through a combination of structural change, cyclical change and also as a legacy of the debt that has been incurred means that the kind of drama that we want to produce, which can be $750,000 or $1 million an hour or more in terms of a telemovie, means that they will find it very hard to invest that sort of money and get a commercial return on their investment compared with, say, foreign acquisitions of content.

One of the telemovies we are looking at commissioning now is the story of Damien Parer, the famous war photographer from Kokoda, and others. We think that will be great. That will be a telemovie. I would anticipate, if it is like the previous telemovie we did on Curtin, that it will be well over a $1 million an hour to create. We can see, with the pressures that are existing around commercial media and the fragmentation that is happening in the market, that the ABC being the ones that can deliver this kind of content at this scale will be very important. It will be a key to our future funding submissions to government.

Senator MINCHIN —Just remind me—the 90 hours is what is required from the commercials?

Mr Scott —Yes, it is quite a complex formula. It is based on different points allocated for long form, short form, movies and the like. As I said, we have a good opportunity to be creating different drama that we will be able to put across our three networks, and that is how we are looking at it.

Senator MINCHIN —Minister, you promised at the last election to amend the charter to mandate this minimum content so that you had equivalence with the commercials. Now that you have funded—

Senator Conroy —Now we have actually delivered it?

Senator MINCHIN —Yes.

Senator Conroy —That is a work in progress.

Senator MINCHIN —But it remains ALP policy?

Senator Conroy —It remains ALP policy and it is a work in progress. We have a busy legislative schedule, as you know, and there are many things keeping us focused, but it would be fair to say that delivering our election commitment to the actual funding as opposed to the amendment has been the higher priority.

Senator MINCHIN —On a related subject, I am sure that you are aware that the commercials, as Mr Scott quite rightly says, are under enormous pressure at the moment. I just wonder, given it is a bipartisan policy—we went to the last election with the same policy of funding a children’s channel—whether the government would contemplate easing the children’s production requirements on the commercial channels if there is going to be a publicly funded children’s channel. I would have thought there was some merit in that.

Senator Conroy —As has been indicated, ABC3 is a digital channel. A switchover and phase-in would have to be worked through extensively if you were going to consider a proposal like that. That is certainly something that could give us some thought, but until we have got our larger uptake it would not be a direct substitute. You could not say, ‘One hour has gone from there and there is one hour over here’, because we have not got the uptake. Having said that, I am sure Mr Scott has more information on one of the big drivers of uptake in the UK of set top boxes and digital TVs, which was the introduction by the BBC of a children’s ad-free channel. If there were a substantial uptake due to that then that might be something that could come on the agenda quicker rather than later.

Senator MINCHIN —I just indicate that I see some merit in that case being made by the commercials.

Senator Conroy —This is referring to tradeable quotas?

Senator MINCHIN —Yes. I would urge you to keep that in mind. That is all I have on that subject.

Senator LUDLAM —I have some questions on general funding and then I would like to come back to the local production issue. The additional funding is certainly welcome. I want to go to the issue of base triennial funding. We have spoken a bit today about the funding for new initiatives which have been foreshadowed for a while. If you take out capital and transmission, what degree of the existing base funding of the ABC has been increased or otherwise?

Senator Conroy —Unlike the previous government, all of this money is to the base funding.

Senator LUDLAM —It is for new initiatives that did not exist 24 hours ago.

Senator Conroy —The previous government tagged projects individually and said, ‘We’ll only fund you for that project.’

Senator LUDLAM —I missed the opportunity to question previous ministers.

Senator Conroy —We did not do that. The ABC put forward a suite of measures it was interested in then. In difficult economic circumstances we have provided funding into the base. Future indexation and so on is actually on the new higher figure.

Senator LUDLAM —Can you see what I am getting at? We will come back to the children’s channel, the local drama and the online stuff in a moment. I would like to go to the existing operations of the ABC.

Mr Pendleton —There is indexation money. We have received a funding increase to fund our existing activities and that is in the indexation number that rolls through in the budget figures.

Senator LUDLAM —What is the rate of the indexation? How is that benchmarked?

Mr Pendleton —It is just a WACC, weighted average cost of six. On our ongoing base it was about 13.9. That is not including the indexation that comes through the national interest initiative activities. But against the base it is 13.9.

Senator MINCHIN —I am interested in what Senator Conroy said. In the budget papers you refer separately to base funding, and the base funding is 2.1 over the three years. There is no provision in that because it was already in the forward estimates and that is regarded as base funding. As a separate item there is this additional funding of $150 million. It says that funding requirements from 2012-13 will be determined in the context of the next triennial funding agreement. You are saying that as a matter of policy decision that is now in the base?

Senator Conroy —It is rolled into the base funding going into the future.

Senator BIRMINGHAM —In 2012-13 it is not 2.1, it is closer to 2.2.

Senator Conroy —When the next triennium comes up it will be a percentage of the higher figure.

Senator MINCHIN —The base will be $725.8 million plus the $65 million. That will be the base in the last year of this triennium.

Senator Conroy —Yes.

Senator LUDLAM —Also, there are substantial new initiatives that have been announced. The point I am trying to make is the KPMG report that was released or leaked in November 2006 stated that the ABC needed in their numbers nearly an additional $126 million after indexation just to sustain the current outputs. That was before we were talking about the children’s channel and the new initiatives that have been announced. I appreciate it was a tough budget, but is the ABC still stretched just in terms of providing the kind of services that you have been providing to date?

Mr Scott —There are a number of answers to that. One of the things that I have said to the ABC staff is that we get given a lot of money from government and we do a lot with it. We put a substantial bid before the government and we were very pleased in this difficult climate that we received the funding that we did. Not for one moment does that take away from our responsibility to ensure that we are spending all the money that we spend wisely. We will continue to look for ways to improve the way we work, improve the way we operate, make programming choices, live within the means that we are given, and also try to make that budget go further. I am not saying for a moment that we are on easy street operationally with this new funding. We have been given new funding. There are commitments that we have made on things that we can do. We continue to try and drive the operational efficiency and effectiveness of the organisation. We are very pleased with the outcome that we received in these difficult circumstances.

Senator LUDLAM —Apart from indexation, was there any funding for maintenance of existing services or has the new funding essentially been earmarked for the new initiatives that were announced in the budget?

Mr Scott —The funding will go towards the initiatives that were outlined in the budget. Of course, that does provide some relief to your existing operations in that, for example, if you are commissioning more Australian drama there is less content you need to acquire, so there will be some relief that comes through the way this is constructed. But, in the main, overwhelmingly this funding is for new undertakings the ABC will be making in the next three years.

Senator LUDLAM —Perhaps we can return to some of the issues that Senator Wortley was pursuing before. According to the minister’s release on budget night, increased funding means the ABC will be able to produce about 90 hours of drama programs a year. You could make the point that the funding that has been provided is not enough to produce all 90 hours; some of that would surely need to be outsourced?

Mr Scott —Even in our bid we never envisaged that that would all be internal production. The ABC has not been doing drama 100 per cent internally now for quite a while. That just makes good sense on two counts. Firstly, we can leverage our money by doing it with the independent production sector, and it is not only the money they bring but also the money that comes in for other government agencies. Screen Australia does not fund 100 per cent ABC internal productions. Nor do we get money from state funding bodies in the main around that. It allows us to leverage our money.

The other thing it allows us to do is work with the very best of Australia’s creative community. All of those dramas we have done in recent times have been done in co-production. Some of the most popular programming we have done in recent years, from Andrew Denton with Enough Rope and The Gruen Transfer—

Senator Conroy —The Chaser.

Mr Scott —The Chaser, one of the minister’s favourites; Chris Lilley with Summer Heights High—this is all working with the independent production sector. We always view this money as money that we would be able to seed in the independent production sector, provide employment out there, have good leverage on this money and work with the best of Australia’s creative community. We are very pleased with that outcome.

Senator LUDLAM —When you talk about leveraging or seeding, are you able to estimate for us both for the adult drama side and children’s programming what proportion of the programming you would anticipate you would be outsourcing and what proportion would be produced in-house?

Mr Scott —It does not work like that. I think ‘outsourcing’ is the wrong word. We work in co-production. Typically, the ABC commissions the work, we exercise editorial control or editorial standards that need to be adhered to, and, depending on the program, we will often have an ongoing relationship with that program as it is being made. Finally, we will receive the opportunity to broadcast and deliver it. It is not as though one part of it is outsourced and another part is not. We work in partnership with the independent production sector to deliver. There are different models. There will be other models where you are just putting money in a broader production that is coming together, possibly co-productions with international partners and the like. But it is not as though an element is outsourced and another is—

Senator LUDLAM —But in your internal budgeting process at some stage you will have to estimate the proportion of money or funds contracted to external providers.

Mr Scott —That is true. We can give you a breakdown of our track record on leverage: how much money the ABC is putting in to create certain productions. We have detail around that.

Senator LUDLAM —I would appreciate that, perhaps even just for the last financial year. Would you estimate that that sort of proportion or model is what you will be pursuing?

Mr Scott —Yes.

Senator LUDLAM —Is there any ABC programming currently—and do you foresee this in the future—that is produced with after sales broadcast on commercial TV in mind?

Mr Scott —As to after sale broadcast and commercial TV, some of our programs have ended up on subscription television. In fact, many times on a sleepy afternoon when you look through subscription television you can see the glories of the ABC’s past on broadcast there. Often these deals come together with a sense of, yes, we will be providing money for that first window but people will be looking to where they will recoup the other investment.

Senator LUDLAM —How important is that in your thinking for a first run on the ABC channel—that is, the value of that further down the track for commercial production?

Mr Scott —Let me put it this way. Hardly any of these programs that we are putting money into would be created unless the ABC was putting in the money. We are putting in the vast amount of money to make them happen. Without us they are not happening. But, because other people like the independent producers are putting in money, they will be looking to put together deals for the subsequent use of that content, the airing after the ABC has done it. You will find that sometimes that helps make the deal happen, but the real driver as far as the ABC is concerned is that first window of opportunity for our audiences—free of charge, free-to-air Australian audiences.

Senator LUDLAM —Are there any restrictions on particular studios or commercial operators that can produce programming for the ABC?

Mr Scott —What do you mean?

Senator LUDLAM —Are there any producers or commercial producers that you do not or cannot work with?

Mr Scott —Speaking broadly, in working with the independent production sector we are looking at the quality of their ideas, their track record and their ability to deliver to the editorial standards that the ABC insists on. I am not aware of people who would have been excluded from that. I am not aware of any examples that you draw from.

Senator Conroy —Are you trying to suggest cooperating with the major networks in a joint venture? Is that the point you are trying to get to?

Senator LUDLAM —If you worked with Fox Studios, for example. Are there any projects or proposals afoot?

Mr Scott —I do not think so. I can come back to you on notice on that, but I suspect that independent producers may subsequently have made on sales of ABC content to eventually appear on subscription television just as the ABC has purchased on occasion programs that have appeared on subscription television and put them on free-to-air. I am happy to correct this on notice, but I am not aware of any, say, co-productions or joint ventures that are taking place between the ABC and subscription television at this point.

Senator LUDLAM —If there is any change to that it would be helpful to know about it. Coming back to where I was before with the indexing and so on, at this stage are you able to identify any particular services or programs that you will need to cut? Are there any job losses in the wings, apart from the indexing?

Mr Scott —No, we have not gone down that road. We have processes that are already well underway around improving our efficiency and effectiveness. We have not reviewed any of that in the light of the budget outcome. The focus of our budget outcome has been around delivery of our undertakings, particularly around getting the children’s channel to air this year, to start the investment that is required to crank up the drama work, and to do work on the broadband hubs.

Senator Conroy —I see they have finally decided after the next series to axe The Chaser.

Mr Scott —I read about that with interest. I suspect they will be with us for a while yet.

Senator LUDLAM —My apologies if I missed this earlier, but you have said that in 2009 we will not see any first-run drama as a result of these initiatives because of the lead time.

Mr Scott —You will see first-run drama, but it will not be specific to these initiatives because of the lead time, yes.

Senator LUDLAM —For the second and the third years, are you able to estimate how many hours before you get up to your—

Mr Scott —Can I come back to you on notice on that? We are still working through that. In a way it is about how we finally decide to go. Telemovies are that much more expensive than miniseries, which are that much more expensive than long run drama, so it will finally come down to the funding mix that we create. We are still working that through now that we have the concrete budget figures delivered for us.

Senator LUDLAM —Not having a background in this industry, in terms of the definition of ‘drama’, do you call the cheaper end of the market—lifestyle shows, reality programs and that kind of thing—drama for these purposes?

Mr Scott —That is not how we are qualifying ‘drama’. There is some debate in commercial television around that, but that is not how we are viewing it.

Senator LUDLAM —That is not a conversation at the ABC?

Mr Scott —No.

Senator BIRMINGHAM —A lot of my questions have been asked by Senators Minchin, Ludlum and Wortley, so that should make it much quicker. You said that 90 hours of drama would be the target for the fourth year. Is that the fourth year of funding or the fourth year of production going to air?

Mr Scott —The fourth year was looking more at the children’s channel. I think what we will be looking to do at the end of the third year will be to have delivered 90 hours. That is what we are shooting for. But that will be drama that we are delivering on ABC1. Some of it will be on ABC2, and there will be increased children’s drama on ABC3, of course. We are working out the final calibration and mix on that. But that is what we are working to do. You are not going to get that in year one, but that is what we are working at looking to deliver through the triennium.

Senator BIRMINGHAM —I am just trying to ascertain if it is actually a target achieved within this set of triennial funding.

Mr Scott —Yes, it will be the end of the third year.

Senator BIRMINGHAM —When you say it is not the fourth year, it is only a triennial funding agreement, so the fourth year is not necessarily within that same run.

Mr Scott —Yes, I understand that.

Senator BIRMINGHAM —It is, in a sense, in that third year of funding?

Mr Scott —That is what we are looking to do.

Senator BIRMINGHAM —What percentage of your overall drama would Australian content be at that 90-hour range?

Mr Scott —I would have to check that for you. I do not have that figure off the top of my head. I will have to come back to you on that.

Senator BIRMINGHAM —How will that compare with the tradeable quotas of the commercials?

Mr Scott —Again, it depends on the mix that you do, because it is not a straight hour figure formula that the commercial TV networks do. It is actually a point system and it is based around, say, Neighbours and Home and Away being one form. It is based on a budget. It is based on a range of factors like that. What we are looking more at is a straight up and down numbers play. I think we absolutely recognise that the kind of drama that we will be doing will be towards the more expensive end that commercial TV has. As I also indicated earlier, we expect in this multichannelling world to be delivering that drama across our range of ABC television channels. This money has really only come through recently. We are talking with the independent production sector and we are working out now exactly the mix of programming we will have to ramp it up to the 90 hours.

Senator BIRMINGHAM —Noting that the points system, of course, gives a higher weighting towards the type of drama that you would expect the ABC is likely to be producing compared with a Neighbours, Home and Away or whatever, would the 90 hours be getting you within a comparable range?

Mr Scott —We would think so, but it is not an hours system in commercial TV; it is a points system. We have said that we are shooting for the 90 hours. What I am keen to do, though, is to ensure that we are not trading off the quality of what we aspire to deliver for the volume; you can easily achieve 90 hours if you are stripping it into long-run, high-churn soaps.

Senator BIRMINGHAM —Yes, I understand that is why we have the points system. You aim for quality productions.

Mr Scott —Yes, so that is why—

Senator Conroy —They are not going to do something like A Week in the Life of Senator Birmingham.

Senator BIRMINGHAM —That would be very dull.

Senator Conroy —That would be a soap opera.

Senator BIRMINGHAM —Particularly if they were filming us right now; it would be extremely dull—no offence to Mr Scott.

Mr Scott —That is what we are working through now. But you could easily make an hours quota at 90 hours, if you are trading down to a lot of the cheaper drama quotas, which we are not keen to do. One thing I would say is that clearly with the minister, with the department, with the screen producers and with others there will be a lot of scrutiny of the work that we are doing. We will be very accountable for what we deliver and how we deliver it. Having sought this drama money for a long period, we have an absolute interest in delivering in spades high quality, distinctive Australian drama in volume.

Senator BIRMINGHAM —As to the question Senator Minchin asked, do you expect to amend the charter in this term?

Senator Conroy —Given we have actually delivered on the commitment on the 90 hours, it is just a question of the parliamentary timetable. If more of our legislation were easily passed through parliament and particularly through the Senate, I am sure we would be able to get it passed through, but I cannot promise you that you will not have blocked many bills and slowed down the process so that it will have passed. It is a little out of our hands. Whether or not we will have introduced—

Senator BIRMINGHAM —I am happy to come back occasionally more often. You are the government. You set the number of sitting weeks. You can get your agenda through if you have to.

Senator MINCHIN —You never know; there might be non-contro legislation.

Senator Conroy —I do not think that from your perspective anything to do with the ABC is non-controversial. I would anticipate that it would be moving forward in this term, yes.

Senator BIRMINGHAM —Speaking of contro and non-contro, it is not related directly to funding but we have asked you many times before about the legislation to amend and reintroduce the staff-elected director.

Senator Conroy —I think that one has now been drafted and will hopefully be introduced in the second half of the year, as I think I indicated earlier in the year. I think it is now almost complete, if not complete at the drafting level. I would anticipate that would come into the parliament in the second half of the year—then again, subject to your support, perhaps.

Senator MINCHIN —Perhaps it is more likely to be contro.

Senator Conroy —Senator Minchin! The old Cold War warrior just sneaks out from you occasionally. I am confident Senator Birmingham will see his way to support it.

Senator BIRMINGHAM —I am sure this committee will have a full and thorough inquiry into the matter.

Senator Conroy —I am sure Mr Scott is looking forward to it.

Senator BIRMINGHAM —He is looking forward to that, no doubt.

Senator Conroy —As is Senator Ludlam, no doubt.

Senator BIRMINGHAM —However, if you are bringing in legislation relating to the ABC by the end of the year on one matter, surely it is not that hard to get the draftsmen to amend those minimum levels?

Senator Conroy —I would not want you to sink both of the initiatives just because you think it should be sped up. We gave a commitment to have this piece of legislation in by the second half of this year, so we will plough ahead with that and we will consider your very kind offer to treat it as non-contro.

Senator MINCHIN —I just suggested to you that you might want to seek to persuade us that it could be non-contro.

Senator Conroy —We will give that consideration on our parliamentary legislative timetable.

Senator BIRMINGHAM —We shall look forward to seeing the second piece of legislation some time this term when the minister can honour the very clear promise in your policy.

Senator Conroy —We have actually delivered on the substance of the promise, which I know you are very happy about. I look forward to that debate when it arises.

Senator BIRMINGHAM —We have all been very happy to welcome Mr Scott’s extra funding today. On funding matters, there is a small reduction across the ABC and SBS related to the cessation of analogue television simulcasting funds. That was on page 114 of Budget Paper No. 2. I assume they were special purpose grants in the first place?

Mr Pendleton —It is a separate outcome. The analogue transmission funding is outcome 2, and the phasing of that is in the second and third years of the next triennium. It comes off a little bit with a more substantial amount in the third year.

Senator MINCHIN —The point is you were given additional funding for simulcasting, which has now been—

Mr Pendleton —Outcome 3, which is digital television.

Senator BIRMINGHAM —There is not a reduction to your broadcasting funds overall?

Mr Scott —No, as the services switch off the funding is no longer needed to pay for the transmission.

Senator BIRMINGHAM —We will move across the page to the distribution and transmission efficiencies, which sounds very close to some of the parts we were discussing about the infamous ‘Project W’ from our last hearings. We never quite got an answer as to why it was called ‘Project W’, but I will live with that mystery for the rest of my days.

Senator Conroy —That is two of us. I am just worried about what projects A to W were before they got to W. I would be more concerned about that. And I am terrified of X, Y and Z.

Senator BIRMINGHAM —Indeed. I realise there are commercial sensitivities, which is why there are not amounts put as to what these savings could be. Perhaps you could talk us through the process for these savings and how they will be reached. Obviously they will mandate and require some level of cooperation between the two agencies. What measures have been put in place?

Mr Scott —There is not a whole lot of detail I can give you. As you indicated, this does relate to our future contractual negotiations between the public broadcasters and the firms that are responsible for our distribution and transmission services. We are committed to working with SBS to identify joint efficiency savings around our distribution and transmission, but for commercial-in-confidence reasons I cannot go into the specific details around that or the dollar funds we would be seen to save.

Senator BIRMINGHAM —I am sure my learned colleague Senator Minchin would be able to tell me the answer to this if I leant over and asked him, but where such savings measures are not for publication I assume that means that when it comes to the budget bottom line they have been factored in.

Mr Scott —Yes, that is correct.

Senator BIRMINGHAM —And that there are buried in Treasury real figures attached to that?

Mr Scott —Not buried; real and top of mind, I think, to us. But not revealed in the papers, yes.

Senator Conroy —If you are looking to understand the dark arts of the budget papers, I invite you to turn to your right. The master of the dark arts is just over there.

Senator MINCHIN —Did you offer these savings or were they imposed on you by ERC?

Mr Scott —As you know, there has been long discussion. It emerged through the proposal SBS put to the 2020 Summit. In fact, this was quite specifically identified as an area of opportunity in the discussions at the 2020 Summit. I think we discussed it in the discussions of the Project W report at the last outing here. I think it is significant that this work is targeting specifically not the broadcast arms of the operations but the transmission and distribution area. Yes, it certainly came through discussions that emerged in the budgetary process between us and with SBS and the department.

Senator BIRMINGHAM —In terms of the implementation of this, is some kind of cross-agency, cross-organisation or working party being established between the ABC and the SBS?

Mr Scott —There have been some initial discussions that are underway now with those agencies and there will be discussions with finance as well as we seek to get this work underway. Again, most of the savings fall in the outer years. We believe that they are achievable and we are working now to set up a process to achieve them.

Senator BIRMINGHAM —What framework has been put around them? We obviously know from Mr Brown’s evidence here previously that there are some sensitivities that exist in this closer integration. Whilst just on transmission I am sure there is a level of cooperation, but what boundaries and frameworks have been established?

Mr Scott —It is the fact that it is limited to the transmission and distribution work. This does not go to the core delivery of broadcasting services that both ABC and SBS deliver in terms of what the audience experience, nor does it go to the basis of the operations—in a sense, the back office functions of the public broadcasters. Once you have developed and created this programming, it goes to how you get it in the position that you are delivering it to the audience. This, in fact, relates to money that the public broadcaster spends with other external companies, rather than work that we are doing ourselves. We think that there is a real similarity that exists in the need of services—that we have to deliver these services as a broadcaster—and there are advantages in us working more closely together to achieve them.

Senator BIRMINGHAM —Is there a lead agency coordinating this? Is it the department of communications, Finance, ABC or SBS?

Mr Scott —No. We are working on it together, but we have outcomes that we need to achieve together.

Senator BIRMINGHAM —I assume that within those unknown targets there are saving costs that are shared between ABC and SBS that have come off of each of your ongoing cost bases?

Mr Scott —That is correct, yes.

Senator BIRMINGHAM —From an ABC perspective you believe them to be achievable targets?

Mr Scott —Yes, that is right.

Senator BIRMINGHAM —And fair?

Mr Scott —Yes. If we can drive and find efficiencies in this area then we think that is absolutely beneficial.

Senator BIRMINGHAM —This may be an issue more for the department later, but in terms of the negotiation of the triennial funding agreement, I note that in the department’s answer to question on notice 43 about reviews within the portfolio, the cost of reviewing the triennial funding for ABC and SBS was nearly $900,000. Similarly, there were consultancies let to convergent consulting for a scoping study on national broadcasting and an assessment of national broadcaster equipment distribution and so on for around another $120,000. It seems that nearly $1 million in the process of working out the triennial funding was spent on an assessment process or something. Were consultants engaged who accrued the nearly $900,000? What is the process that saw nearly $1 million spent to work out the triennial funding?

Senator Conroy —To give you a full answer that should be asked a little bit later on when the officers from the department are here. I am sure we have a comprehensive answer for you, but we need the relevant officers at the table. I am happy to take it on notice at the moment. If you want to fire it back in later in the afternoon then we will get you a comprehensive answer.

Senator BIRMINGHAM —We shall do that, thank you. I have one other issue, but I am happy to defer.

Senator WORTLEY —I understand the government allocated $15.3 million for the creation of the regional online hubs. I was out of the room for a few minutes, so I am not sure if online hubs have been touched on yet. Can you explain what a regional broadband hub is?

Mr Scott —Absolutely. We are very pleased at this funding. As you know, the ABC has been a real leader in Australian media in taking our community into the opportunities of broadband. As I mentioned earlier today, there are 6 million pages at abc.net.au, with more than 60 million programs downloaded for podcast and vodcast. We are excited at the opportunities that exist when fast broadband comes to all Australian communities and is available in all Australian homes. This commitment builds on the infrastructure that the Australian public has already invested in in the ABC, particularly the ABC local radio network and now the online network that we have established in 60 centres around Australia, covering 99 per cent of the Australian public. With this funding we will be placing specialist video content makers in our local radio stations. They will be doing a number of different things. They will be filming, editing and uploading original local content for that market, for that community, so content from that region and for that region will be distributed through our ABC local website. They will also be involved in training existing content makers and existing members of the local community in the latest and most efficient filming, editing and uploading techniques.

A key opportunity comes in this world of fast broadband and web 2.0 not just to broadcast at a community but to allow the community to create its own content, to develop its own stories and to share those with the broader community. We will be establishing community websites and genre portals which allow Australians with common interests to talk with each other and to share experiences. As we have stated here before, this is the creation of a virtual town square, a place where Australians can come together to listen to each other, to learn from each other, to speak and to be heard. In practice, we will be using ABC local as the hubs for this with the existing websites. We will be creating more broadband content. We will be equipping the community to create and deliver more broadband content. We will be the distributor and promoter of that wherever possible. We are going to match the expansion of these hubs with the rollout of the National Broadband Network. We would anticipate that these first enhanced hubs will take place in Tasmania and that we will grow them. We are anticipating 15 regional hubs in the first year, 30 in the second and up to 53 in the third.

Senator WORTLEY —How will they tie in with the ABC’s local radio network?

Mr Scott —That is where they will be hosted. The centre for those hubs will be the ABC local radio station. That is where we will be putting the extra staff. The material will be delivered through the ABC local website. When I say we currently have an infrastructure that allows this additional investment to grow and build on, that is why the delivery of it and the link with ABC local radio is very important.

Senator WORTLEY —When you spoke about specialist video content makers, are they already employed at the ABC?

Mr Scott —No. We will be looking to employ and place them out there. That will be additional staffing.

Senator WORTLEY —What was the number?

Mr Scott —We are looking to do 15 in the first year, then we will get up to 30 and then north of 50.

Senator WORTLEY —Who produces the new content?

Mr Scott —We will produce some of it through these people that we are putting out there, but part of what we want to do is to have them spend their time training and developing the community expertise so that the community is creating the community’s content that we are then showcasing through our ABC local website.

Senator WORTLEY —How does this content improve the ABC’s services to regional and rural Australia?

Mr Scott —Very significantly. If you look at how broadband is working in communities there are two things that are happening simultaneously. One is the fast, instant access to global content, which we have all experienced and is a wonderful attribute of life online, but there is an opportunity to create hyperlocal content as well, content that is developed in a community and to a community not just in print but in audio and video as well. That is the real advantage that comes to the community. To create an environment where the community is creating and delivering its own content where we can showcase it through the ABC local website is the real opportunity that we see with this initiative.

Senator WORTLEY —Is it fair to say that the ABC sees itself as having a key role in providing online services, as well as the traditional broadcasting services via radio and television?

Mr Scott —Absolutely. This is not a new thing. In 1995, when the ABC started abc.net.au, the ABS had not even started to measure online usage in Australia. We have created iView, which is the first internet television service. We have been leaders in podcasting and vodcasting. If you look at our mission, we are about connecting Australians, and online gives us an opportunity to reach more Australians in more ways and more often. We have this compelling content, this great content, with the ability to catalyse content being created by our communities and a way of distributing it. Our future will be in radio and on television; but our future will absolutely be online. Fast broadband is a key to the future effectiveness of the ABC in terms of how we can distribute our content and how we can create and deliver content.

Senator WORTLEY —In relation to the specialist video content makers, you spoke about 15 in the first year and 30 in the second.

Mr Scott —Yes.

Senator WORTLEY —Overall, how many new jobs, both inside the ABC and in other places, might this initiative create and where would those jobs be located?

Mr Scott —We are still developing the detail of this, but I would envisage that we would see these 50-plus positions created at the ABC. As to employment outside, I am not sure. Part of what we will be doing is creating opportunities, as I said, for community members to create and develop their own content. I am not sure whether that is correlated to employment. I think we will see vibrant and well-informed communities on the back of this initiative and that there will be positive employment outcomes that come from having fast broadband in these local communities, in creating compelling content there, but we will need a bit of time before we can explore that in more detail.

Senator WORTLEY —What will be the location of the new jobs?

Mr Scott —They will be linked back to where our local radio stations are located in regional and rural Australia.

Senator WORTLEY —The jobs will be linked back. Does that mean that the person will be based—

Mr Scott —We are still developing the plan in detail. What I have outlined to you today is our thinking at this point. It may emerge and change. I am happy to update you and others as more detail emerges. We currently have 60 local radio stations around the country. Nine of those are really metropolitan stations and the rest are in regional and rural Australia. That means we have premises there. We have people currently employed there and we would expect that these new staff members would be co-located in those facilities, delivering the content into that local region.

Senator WORTLEY —Can you go over the time frame again?

Mr Scott —The funding ramps up over the three years. I think we are looking to establish 15 of these hubs in the first year, grow that to 30, and then would be more than 50 in the third year.

Senator MINCHIN —As you mentioned, this ramps up to $8 million a year. Is that going to be in your base funding as well?

Mr Scott —Yes. I understand it is the same as the other.

Senator MINCHIN —Senator Conroy, can you confirm this will be in the base funding?

Senator Conroy —No, I think the 15 is not.

Senator MINCHIN —Not in the base funding?

Senator Conroy —No.

Senator MINCHIN —In order to keep this program going you will need to pitch for it in your next triennial funding?

Mr Scott —I am sure it will have a compelling track record.

Senator MINCHIN —Good luck!

Senator Conroy —As long as we are in government, I am sure he will.

Senator MINCHIN —What will be the deficit in that year? Mr Scott, you realise the government has to borrow every cent of this $8 million in order to pay for that. That works out at about $150,000 a head.

Mr Scott —No, there is a lot of equipment.

Senator MINCHIN —What is the break-up?

Mr Scott —I will be able to provide that to you. There will be significant equipment upgrade that is required to go with this at our local radio stations.

Senator MINCHIN —It is not just all wages?

Mr Scott —No.

Senator MINCHIN —Especially the video makers?

Mr Scott —No.

Senator MINCHIN —You have presumably seen this report this morning of the angst this initiative is causing.

Mr Scott —I did see it. I was a bit surprised by it.

Senator MINCHIN —I invite you to perhaps respond. I would particularly like you to respond to this report that the BBC looked at this and backed off because Ofcom said it would hurt their commercial riders.

Mr Scott —Let me talk specifically about that. The BBC proposal, in Australian dollar terms, was a proposal with the best part of $140 million expenditure over five years. We are talking about $15 million over three years, so the scale is very different. The geography is very different.

Senator MINCHIN —Is it the same idea, but just on a much bigger scale?

Mr Scott —No. It was different in scale. It was different in the geographies that they were trying to reach. The BBC’s presence that they were talking about has very different geographies to the geographies that we are trying to reach. With the geographies in the UK there still existed significant media presence. The BBC was going to very significantly invest in their own staff to develop their own effective video news facility that would be a dominant media presence in those regional areas. They were staffing up and creating video newsrooms. It was the BBC Trust, not Ofcom, that decided that this initiative should not go forward.

Senator MINCHIN —Ofcom did some research.

Mr Scott —Yes. Ofcom did not support it, but the decision was actually made by the BBC Trust itself that this was not the best investment of BBC funding. I would say of a scale it was vastly different. Its intent was different. If we were looking to put many people out in regional areas to create video news services, almost like regional news bulletins everywhere, then that would be different again. That is not the intent of this. Yes, it will create some content, but a key to it is to enable and facilitate the community to create its own content. There is a strong user generated content facility in this one that was not a feature of the BBC’s work.

I think the whole geography of Australia compared to the UK and regional broadcasting is very different. In many parts of the country that we will be creating content for—and will be creating content by people from those areas—the ABC is effectively the only media service that is reaching in and delivering into those communities. We think that in terms of scale, ambition and reach what we are proposing to do is something very different to what the BBC proposed, particularly with the user generated content. I would say that in many of these areas the ABC lead the way. We have led the way in the creation for Australian media and active online presence. We have led the way into podcasting and vodcasting. We have led the way to internet television services. We are going to lead the way for the community to generate local user generated content. That will be to the benefit of all the media. If Fairfax is out there creating their local news sites online and APN is doing the same, what we are doing is empowering a community and teaching and developing a community to create their own content and creating more user generated content out there. That will be of benefit not just for the community and not just for the ABC but for all the media outlets that are out there.

The real argument in the UK was around this massive crowding out that they saw was going to happen by the BBC now injecting their clout into creating regional video content. By comparison, that is into a market where the BBC is already a dominant player, with a market share of something like 40 per cent of television and more than 50 per cent of radio. I like to say, by comparison, that the BBC in contrast to the ABC has 10 times the money to deliver to three times the population on the geography the size of a postage stamp, so there is a sensitivity about the BBC being even more dominant. That certainly is not a factor in the Australian context at all.

Senator MINCHIN —What exactly do you say to the Warren Lees of the world? As he said here, ‘It will suck the oxygen out of the marketplace for private investors.’ Is he just wrong?

Mr Scott —We are not taking any money away from them at all. We are certainly not taking any advertising dollars away from any commercial media. Of course, these are advertising free sites. We are going to be leading and educating the community in the value of fast broadband, which will be to the benefit of all media outlets out there. We are not making a significant investment so that we alone are creating content. We are enabling the community to create content. I would say to those media executives who are quoted in the story: Do not judge the ABC’s proposal on the BBC experience. They are vastly different in terms of scale and in terms of intent. We have no concerns and no ambitions beyond those that are laid out.

Senator MINCHIN —It would be pointless to have a zero sum gain where the taxpayer borrows money to invest, as we have to these days, but then the private sector withdraws from the regions. Nobody is better off.

Mr Scott —No. It is also fair to say that fast broadband will have an impact on the dynamic of media in regional Australia, as it has already had an impact in the cities, and traditional business models will change, just as it might be said that under those changing business models the ABC’s role and responsibility to deliver, say, serious news and current affairs on radio and television has become even more important in this changing media landscape.

For many years now we have seen that ABC local radio has been, in a sense, the lifeblood of the provision of serious news and current affairs in regional and rural Australia. For example, we are now seeing in radio massive syndication that is taking place by those commercial radio proprietors who exist, whereas the ABC has local voices broadcasting local news into local communities. The argument remains the same that it is important that the ABC invest in broadband content in regional and rural Australia. I do not think that there is any guarantee that others will be in a position to do that. I do not think it is a case of us crowding them out. I do not think that is the case at all. We are in a position to deliver. If we deliver it well, all of the community will benefit. I do not think that it is in any way a threat to the operations of commercial media in its own right.

Senator MINCHIN —You make the point about the changing market. That is what this is indicating. Prime, for example, are doing it. It says that they are rolling out a network of more than 40 media websites offering local information, entertainment, news and generated content in regional markets.

Mr Scott —Every newspaper in the world is creating its own website.

Senator MINCHIN —This is specific regional initiatives.

Mr Scott —Yes, but they are regional websites for local newspapers. It is entirely predictable that they are doing that. We have been looking to take advantage of the opportunities that fast broadband delivers, to have people who are there delivering only broadband content and, as I have said, to really drive the community activity in creating local broadband news and content as well, which we think will be to the benefit of everyone.

Senator MINCHIN —Will you be going out of your way to dispel the fears?

Mr Scott —That was the first I read of it this morning. I will be happy to talk with them if they want to discuss it further.

Senator MINCHIN —I would commend you to do so.

Proceedings suspended from 3.47 pm to 4.02 pm

CHAIR —We will resume. Senator Ludlam has the call.

Senator LUDLAM —Thank you, Chair. I have some questions in relation to the ABC and SBS review that occurred up to the end of last year. I am not sure whether to direct them to the minister or to Mr Scott, so I will just see where we go.

Mr Scott —That is the public broadcasting review, which is in the budget papers.

Senator LUDLAM —Obviously public submissions were sought. When is a public report on the outcome of that review likely to occur? It was called ABC and SBS: towards a digital future.

Mr Scott —We have a copy here.

Senator Conroy —We issued it with the budget papers.

Senator LUDLAM —Yes.

Senator Conroy —I am a bit confused. Is there supposed to be something else?

Senator LUDLAM —No, not that I am aware of. Was that conducted as a result of consultations being undertaken late last year? I am seeking a sense of how the public consultation guided your thinking on the issues you were consulting on.

Senator Conroy —We considered all of the submissions and these were our thoughts around the budget.

Senator LUDLAM —Is there a specific summary of the response to the submissions?

Senator Conroy —This is our response to the submissions. Did we do a summary of them within it? No, but we published them.

Senator LUDLAM —So the submissions are live on your website. Is that all we will see by way of a response?

Senator Conroy —I think they are publicly available. I will just double-check that.

Senator LUDLAM —As long as we are talking about the same thing.

Senator Conroy —I thought we had published them. You have caught me by surprise. I thought we did.

Senator LUDLAM —As long as we are talking about the same thing. Is that the ABC and SBS report?

Senator Conroy —Yes. Would you like a copy?

Senator LUDLAM —Yes, I would like one right now if that is possible. I will just double-check and make sure that we are talking about the same thing.

Senator Conroy —I will see whether we can get more copies brought up, but Senator Ludlam is the only one who needs a copy right at this moment.

Senator MINCHIN —I have a copy. Do you want another copy?

Senator Conroy —No. They were distributed on budget night.

Senator LUDLAM —I will check up on that in a moment. I want to jump to something that was reported, I think, on Media Watch a little while ago. I believe that it was called Quality Assurance Project 8, and it was to assess the work of current affairs interviewers Kerry O’Brien and Tony Jones in particular. Are you aware of what that refers to?

Mr Scott —I can speak to that. As part of our quality assurance work at the ABC, we undertake a number of different elements, and one of those is programming reviews that are undertaken in the divisions. That is where they review, critique and assess the content of a program, according to our editorial policies and standards. That happens all the time. We also do a number of what we describe as ‘quality assurance reviews’. That is where we take a slice of content and review it in the light of our editorial guidelines, so we develop a methodology. Often that work is done by independent reviewers outside of the ABC. If you look on our online site, I think you will find six of those reports. We have a number of others in the field at the moment. Media Watch did refer to one report. What we do not do is provide ongoing commentary and detail about these as they are taking place. I did not do that to Media Watch and I have not done it anywhere else. But, yes, we will review programs or aspects of programming—how we cover certain issues and deliver certain styles of journalism—and that is underway.

Senator LUDLAM —Does this relate to the sorts of matters that Senator Abetz was raising before, for example?

Mr Scott —Yes. For example, looking back at the ones that are online at the moment, you will see a review that was done last year on how we treated the debate and coverage of water issues in Australia. Sometimes you might take a program and review it and sometimes you might look at how the ABC is dealing with a swathe of content related to a single issue across a number of its different platforms. There are a variety of different methodologies. We are developing some new methodologies here. We are in consultation with international media organisations, such as the BBC, the CBC and a number of the American newspapers, all who are very interested in the methodologies that we have developed and are keen to take advantage of some of that work. This is an ongoing process and it is a complement to the internal program reviews that are undertaken.

Senator LUDLAM —These are discrete reviews that occur from time to time.

Mr Scott —Yes, that is right.

Senator LUDLAM —Was it correctly reported that project 8, in particular, was just looking into the work of those two reporters?

Mr Scott —What we have not done is provided ongoing commentary and I am keen not to go into too much detail on that. Suffice it to say that long-form interviewing is a very important part of the work that we do, particularly long-form live interviewing. I think it is appropriate for us to take an independent look at that in order to assess our performance over time. I also think that there are benefits to have some elements of peer review, where we can, so that people understand the pressures of doing live interviews and the like. People who have done it and who understand it might be in a good position to provide us with some insights. As was reported, the two reviewers that we engaged internationally to do this work were no longer available, so we are reviewing it now. But we will do a review into long-form interviewing.

Senator LUDLAM —So effectively they have withdrawn.

Mr Scott —Yes, as has been correctly reported.

Senator LUDLAM —Is that particular review being conducted in camera and will those results be made public in the same way as—

Mr Scott —I expect that we are still learning as we go on this. We have put six reports up on our online site now. I would expect that most reports we do will be publicly available, although there might be some reasons why they would not be. However, at the moment the ones that have been to the board are now up online, and there are six of those.

Senator LUDLAM —So, if that is eight, presumably there is another one afoot somewhere that has not yet been—

Mr Scott —Yes, there are others in the field at the moment. They have been delivered to me, and when they have been delivered to the board we will be in a position to talk about them publicly. It is an audit process. I do not see that as being that different from the internal financial audits that we do. We have our own rules and regulations that govern how our divisions operate and spend their money; we have an internal audit function that comes and gives a snapshot on that; and from time to time we also go externally to get a review on things. It is all to do with healthy quality assurance. But we do not talk about our internal financial processes while they are underway and we are not going to talk about our internal editorial quality review processes while they are underway.

Senator LUDLAM —At a high level, can you tell us what the review topic of No. 7 is?

Mr Scott —I am not in a position to give you details on that at the moment. But there are details that we look at that are to do with accuracy and impartiality and, when that material is available, we will let you know.

Senator LUDLAM —The last one that I am interested in for the moment—again, this is a bit of a change of tack—is an advertisement, which I think I have a copy of here somewhere, about Play School. This one is for Play School live in concert at various registered clubs around New South Wales. For how long has that sort of thing been going on?

Mr Scott —For many years.

Senator Conroy —What are the dates?

Mr Scott —It is a licensing deal that happens under ABC Commercial. The ABC has been involved in licensing events or holding events like this for many years now.

Senator LUDLAM —In these sorts of clubs?

Mr Scott —I am not sure about the venues.

Senator LUDLAM —The venue in particular that I am interested in—

Mr Scott —Which venue is that?

Senator LUDLAM —I am interested not so much in the individual venues but that this is occurring in registered clubs, at least throughout New South Wales and presumably in other states as well. The main revenue base for these clubs, as I am sure you are aware, is poker machines. I just wonder about the implications of a tie-in that is trying to attract—

Senator Conroy —I understand that you cannot have kids in and around poker machines. I am sure that there is not a lot of revenue being generated by the five-year-olds.

Senator LUDLAM —That is not what I am suggesting.

Mr Scott —I am sure that this would be in a hall or auditorium type area that would be separate from where alcohol is served and consumed and from where poker machines might be in operation. But I can come back to you with more detail on that.

Senator LUDLAM —That would be good. I will frame up some more specific questions that might help you to provide us with some of that information. The company—I presume it is a company—Kids Promotions is listed as an associate.

Mr Scott —Yes.

Senator LUDLAM —Can you tell us now or find out and come back to us with who owns that company—

Mr Scott —I will find out, yes.

Senator LUDLAM —and provide us with some details as to the contractual arrangements between Play School concerts, the ABC and Kids Promotions?

Mr Scott —Yes.

Senator LUDLAM —Also, please let us know how long Kids Promotions has held that contract, if indeed this is a long-serving arrangement. Do the registered clubs pay the ABC directly for the concerts or do they come through Kids Promotions?

Mr Scott —I will get the detail on that.

Senator LUDLAM —Is the ABC logo used in the promotional material and the signage for kids’ free concerts at all these registered clubs; so to what degree is the ABC branding these events? Maybe you can tell us this off the top of your head, as we have the budget papers in front of us: what revenue is derived for the ABC from this tie-in?

Mr Scott —I can tell you broadly that our commercial businesses in their entirety—our shops, centres, books, CDs, DVDs and events—bring back to the ABC in a given year a net dividend payment, in a sense, of somewhere between $15 million to $20 million. There are higher revenue numbers, but that is the dividend; that is the profit that it delivers back to us. That compares with the allocation for ABC operations, both for us and for the distribution of our content, of around $850 million. So it is somewhere around two to three per cent, and that is fairly consistent year in and year out.

Senator LUDLAM —But even that is quite a high-level figure. So that is not just Play School; that is all the commercial type—

Mr Scott —No; that is 40 shops, 80 centres, books, CDs, DVDs and the like.

Senator LUDLAM —So it is going to be a smaller fraction of two per cent. Could you, on notice, come back to us with a breakdown of what that is for?

Mr Scott —Yes, we will see what we can do for you in that way.

Senator LUDLAM —Do you have concerns about the commercial exploitation of Play School as a drawcard for gambling outlets?

Mr Scott —It has never been framed in that way to me and I would like to get my head across the detail that you have outlined there. Play School is a loved and trusted provider of wonderful children’s entertainment. Of course, content is created off the back of Play School in the form of books, DVDs, CDs and toys. That has been the case for a long time. We are very, very careful in our decision making around that and we are very, very protective of Play School as a brand, as an entity and as an association with the ABC for more than 40 years. So I can look into that specific detail. Even without looking at it, I would draw a distinction between a Play School concert and the location of the hall in which it is being held. Let us just look at the specific details of this one.

Senator LUDLAM —Yes, I would appreciate that—and whether any concerns have been raised internally within the ABC about the potential impact on the brand and on kids and parents, using that as a drawcard to get people into licensed, gambling premises.

Mr Scott —Yes, I understand the question.

Senator Conroy —I would happily take my daughter to the Canberra Labour Club to watch an ABC Play School concert.

Senator LUDLAM —Thank you for that contribution, Minister. I would appreciate it, if you are able to come back with those details.

Mr Scott —Yes.

Senator LUDLAM —That will do for me for the moment, Chair. I will come back to you later.

Senator MINCHIN —Mr Scott, as you know, at our last hearings, I was critical of the ABC in relation to the tendency of its on-air presenters to describe emissions of CO2 as ‘pollution’; however, watching ABC TV news last week at seven o’clock, as I always do, I saw the Adelaide newsreader, referring to a story of a visit of Australia’s Governor-General to Adelaide, accurately described the Governor-General as Australia’s head of state. I want to congratulate and commend the ABC for that. I noted that with great pleasure because that is a very accurate statement of her status.

Senator BIRMINGHAM —You are being provocative today, Senator Minchin.

Senator MINCHIN —I like to give credit to the ABC where it is due.

Mr Scott —I await the question with interest.

Senator MINCHIN —There is another matter that my own modesty would normally prevent me raising, as it is to do with me. However, you may be aware that, as a result of my acceptance of an invitation to go on ABC2 the morning after Senator Conroy’s rather extraordinary announcement about the NBN—

Senator Conroy —I am surprised that it took you 24 hours to find your voice.

Senator MINCHIN —I was on Sky within an hour, but ABC2 did not invite me on until the following morning, when I was very happy to turn up—

Senator Conroy —No wonder you dislike it so much.

Senator MINCHIN —at the ABC studios in Adelaide. I have done ABC2 interviews before and I am aware and I understand that you are trying to keep your costs down. I was familiar with the practice of going into a room with 20-odd people—

Senator Conroy —I understand that was one of your finest performances, Senator Minchin.

Senator BIRMINGHAM —It was a fabulous interview.

Senator Conroy —It was. Chaser could not have done it any better.

Senator MINCHIN —Anyway, let me just take you through this. You sit there in front of this tiny little camera, someone just says, ‘Sit here,’ and sticks something in your ear and away you go. There was, as has now been revealed, a sequence of conversations with whomever it was who was talking into my ear about lighting, camera angles, height and all the rest of it.

Senator Conroy —I will confess: it was not an accident; I organised it. There you are. You have got me, Senator Minchin; I plead guilty.

Senator MINCHIN —Fortunately, I was not having a Kevin Rudd moment and I did not yell and scream at anybody.

Senator Conroy —Neither did the Prime Minister.

Senator MINCHIN —I saw the humour in it. But I suppose what disturbed and horrified me was that, when it was put on YouTube and Crikey, all that pre-interview preamble had actually been recorded. I do not know how many politicians think when they go and sit in that chair that, from the second they sit in it—

Senator Conroy —There is a very intuitive Yes Minister episode that I am sure you have viewed on this very matter, Senator Minchin. But perhaps I can say that I am with you in sympathy at this stage.

Senator MINCHIN —I was interested, firstly, that it was all recorded, and perhaps in future a warning ought to be given to every interviewee that everything they say is being recorded; and, secondly, obviously I was somewhat disturbed to find it appear on the ABC, although I understand the motives of whoever did release it. They were concerned, I guess, at the lack of funding that meant that it was done in a rather skinflint manner. I did not object to that particularly.

I also draw your attention to Amanda Meade’s little column in the Australian of last Monday, 18 May, where she referred to this matter and very kindly described me as ‘good natured’. I was interested in two things in that story. We hear that Canberra pollies, including Julia Gillard, have refused to do these interviews in an empty studio anymore. I assure you that I will not refuse and I will be more than happy to turn up. It says here that the footage was removed and the staffer was sacked. I would be very concerned if that were the case. As you know, I did not make any complaint. I understood the circumstances and I did not seek to complain at all. So I am disturbed if anybody has been sacked over this incident, even though I understand that it was probably a breach of protocol to give that footage to YouTube.

Mr Scott —It is a more complex story.

Senator MINCHIN —I would not mind hearing your version of events.

Mr Scott —I appreciate that. Personally, thank you for being good natured about it. On News Breakfast, we are taking advantage of the opportunity to go around the country. There is nothing quite like it on television; it is almost more like a radio program. We are bouncing around the country. We are funding this from savings that we have made from our news production, taking advantage of new technology, and it is going very well. I am delighted to say that, in the ratings, it is going very well and most weeks now it out rates Sky News. We are delighted that people like you and Senator Conroy can turn up and be interviewed on the program. We do record those interviews. I think part of your point is: when do they start recording? I need to look into that. It is a little bit like when a satellite feed comes in. I will look into when the precise time is and whether we should let people know when the switch is being clicked.

Senator MINCHIN —I think that is the main thing—just to let people know when they are being recorded.

Mr Scott —I appreciate and understand that. We did run an investigation into the unauthorised footage that was put up on YouTube. We found that an employee had committed theft of ABC copyrighted material and confidential information and had posted the edited footage online without authorisation and they had misused ABC resources in doing so. However, the report in the Australian that the employee was sacked is not correct.

Senator MINCHIN —Good.

Mr Scott —However, the employee admitted to posting the footage and resigned prior to any disciplinary processes even being commenced by the ABC; they were not sacked by the ABC. There is some suggestion in some commentary that this technology has something to do with our new news studio automation process, but it does not. This is equipment that is used in news operations around the world. But I appreciate that, on your arrival at the studios, a fleet of people are not waiting there for you to do your make-up, lighting, sound and camera work. It is a fairly bare bones operation and that is how we are able to do three hours of live television every morning.

Senator MINCHIN —I respect that and I think that is good. However, as I say, when I turned up, it was half past seven or quarter to eight or something like that and there were 20-odd people around.

Mr Scott —They would be mainly in radio and they were around, yes.

Senator MINCHIN —There were radio people and others. Surely someone there could be multiskilled simply to—

Mr Scott —We are looking to do some of that too. The most multiskilled are the reporters who are turning up. In addition to their previous skills of simply doing the reporting, they are learning how to do all that too. We will continue to look at that as we evolve News Breakfast over time.

Senator MINCHIN —You mentioned the word ‘theft’. Is it actually theft to—

Mr Scott —This material is actually our copyrighted material.

Senator MINCHIN —So do you put something like that on YouTube?

Mr Scott —Yes, and YouTube took it down.

Senator MINCHIN —I note that you say that the employee concerned resigned. Can you assure us that they were not pressured to do so? Are you saying that, if that person had not resigned, they would have been sacked?

Mr Scott —No. With someone who breaches our rules and our policies, we would have commenced a disciplinary process, as we do from time to time. But that process had not even commenced at this point.

Senator MINCHIN —I take their motive not to be related to me but to make a point about ABC funding, ABC priorities, ABC staffing or something like that.

Mr Scott —Yes.

Senator MINCHIN —I would be very concerned if the intent had been to sack them, although obviously I accept the seriousness of theft of material.

Mr Scott —I would say as well, more broadly, that there will be incidents like this all the time. I think satellite feeds over the years have been used, with all that happens before and after such feeds come on and with so many people coming in and out of our studios. Even in a more formal studio setting, there will be last minute make-up, adjusting of lights and adjusting of sound. In fact, even in preparation, if cameras are rolling and tapes are being made and those tapes get into public currency—and now there is a distribution method for all of that through YouTube and the like—that, in a sense, breaches the trust and the undertaking that we have with the people we invite into our studios for interviews. So we have to be in a position where we take that seriously, and we do; it is a breach of trust. But I can tell you that there had been an initial discussion with the staff member, the formal disciplinary processes had not started and the staff member immediately resigned.

Senator MINCHIN —Do you generally ensure that all your employees know that any such transfer of such material to a website would be theft? Are people generally aware of that?

Mr Scott —I think they are given an understanding of that, yes.

Senator MINCHIN —That is all I had on that. I have a couple of other issues but, Simon, do you have any?

Senator BIRMINGHAM —I have one matter that relates equally to a disciplinary matter, so I might jump in here.

CHAIR —We have a couple of defenders of the workers here.

Senator BIRMINGHAM —Always.

Senator Conroy —There is no truth that you posted that on YouTube though, is there?

Senator BIRMINGHAM —I do confess to having viewed it a couple of times, but I did not have the access that Mr Scott described to be the one to post it. I want to turn to Stephen Crittenden’s suspension and issues around that, which we canvassed to some extent previously. In response to a question you took on notice last time, you informed us that the external costs incurred in the investigation of the alleged misconduct by Mr Crittenden were nearly $39,000.

Mr Scott —Yes.

Senator BIRMINGHAM —What were those external costs—mediation?

Mr Scott —I can come back to you in more detail on it. Mr Crittenden, I understand, undertook legal representation as the disciplinary process was underway, and we had an assessment of these facts and circumstances independently assessed and reviewed. You will understand that, in these circumstances, the dispute was with the flow of line management. So we had an independent group come in and provide us with a set of advice around the circumstances, and I think the costs would mainly be related to that.

Senator BIRMINGHAM —Mr Crittenden was suspended on full pay for the duration of the investigation?

Mr Scott —Yes.

Senator BIRMINGHAM —Presumably, the ABC’s in-house counsel or others were involved in assessment of the issues as to what the alleged misconduct was and so on as well?

Mr Scott —That is correct.

Senator BIRMINGHAM —So, whilst the external costs were some $39,000, the actual costs incurred would have been significantly more than that for the organisation as a whole.

Mr Scott —If you include internal costs, yes, it would have been higher than the amount that we spent on external support.

Senator BIRMINGHAM —What misconduct was ultimately found in that matter?

Mr Scott —I do not have the detail here in front of me and we probably have made undertakings not to publicly disclose that, but let me check the detail of it and come back to you in writing on it. Mr Crittenden has moved to the background briefing program, where he currently works as a reporter for Radio National.

Senator BIRMINGHAM —This is similar to the point that Senator Minchin was making before: we would expect ABC employees to adhere to appropriate conduct within the organisation, but I think equally a grey zone exists when it comes to criticism of decisions on where resources are directed, what is broadcast, what is not broadcast et cetera. In the end there is much commentary that exists around the ABC, and I do not think it is unreasonable that a prominent presenter of a particular program, like Mr Crittenden, should comment when asked about the future of his program.

Mr Scott —The distinction I would draw here is that nobody asked any questions here. Mr Crittenden was host of the program; the microphone went on and he made a series of comments. We have processes that we deal with here, when our broadcasters know that they are going to be providing commentary on matters that are contentious, matters that are controversial and matters that relate to the ABC. An open microphone is not open slather to say or do whatever you like. There are appropriate checks and balances and they include upward referral of these matters. Without providing too much detailed commentary, I think it is fair to say that the processes and expectations that are set down for ABC broadcasters were not followed in this fashion and there are consequences for that. We have these regulations, these rules and these guidelines for a purpose. There is a responsibility that comes with an open microphone. Our expectation is that those people who have the privilege of sitting in front of an open microphone or of broadcasting on the ABC can live up to the responsibility that that position entails.

Senator BIRMINGHAM —At what point is it reasonable for somebody sitting in front of such an open microphone to criticise a decision of ABC management?

Mr Scott —I think it is a fairly robust place and there are exchanges of views, and there are umpteen examples of where criticisms have been voiced over time; but there are appropriate ways of framing that viewpoint. A program that is a factual and topical may not be the appropriate place for the broadcasting of personal or individual views of ABC employees to take place. It is not a free for all. It is not a place where personal opinions should be voiced on all occasions. There are appropriate ways of engaging around content. That was what was found in these circumstances. I do not resile from that. I think there would be far more criticism if we said that the microphone could be turned on and journalists or reporters could say whatever they thought and express whatever personal views they had.

Senator BIRMINGHAM —I think there would certainly be quite justified criticism there. The question is: at what point is criticism of management decisions reasonable, warranted and allowed under the ABC’s processes? I take it that, if those comments had been made in the context of a news and current affairs story being broadcast about the decision of management, there may have been a different outcome. You are drawing some distinctions as to the nature of the program as well as the nature of the comments?

Mr Scott —That is absolutely right. If you go back in the annals of the ABC you will find robust debate and discussion about and criticism of decisions that have been made by ABC management at the time. The governance model and a range of issues have been covered extensively on ABC programs, and appropriately so. But, if it is going to be contentious, it needs to be done seriously and with upward referral; it needs to be done in the right way under the guidelines and rules that exist to safeguard the integrity of the organisation.

Senator BIRMINGHAM —What clarity has been provided to all broadcasters as a result of and as lessons from the Crittenden incident?

Mr Scott —The clarity exists in our editorial policies, a hardcopy of which is provided to every one of our broadcasters—copy is also available online—and, where issues emerge from adherence to editorial policies, our individual line managers will reinforce them. The policies that exist within the organisation are quite widely known and understood.

Senator BIRMINGHAM —Has anything proactive been done since this incident?

Mr Scott —I think there were some discussions in the radio division, but I would have to take that on notice.

Senator BIRMINGHAM —Again, if you could, that would be helpful. While we have been having this discussion, I have been sent a message in relation to the issue that Senator Minchin was pursuing before.

Senator Conroy —Are you involved?

Senator BIRMINGHAM —That message alleges that the staff member in question was asked to resign. Can you give an undertaking that that was not the case?

Mr Scott —The only advice I can give is that the report in the Australian that the employee was sacked was not correct. The employee admitted to posting the footage and resigned prior to disciplinary action being taken. That is all the information I have.

Senator BIRMINGHAM —I cannot remember what you took on notice in response to Senator Minchin, but could you establish with the managers who handled that incident that the employee was not asked to resign? Obviously I would have thought that would be a particular breach of other guidelines for the ABC, given that you have established disciplinary procedures. I am pretty sure that asking someone to resign before those procedures were enacted would not be part of those procedures.

Mr Scott —Yes, I am happy to take on notice whether there is anything further to add to my previous comments.

Mr Pendleton —Had the misconduct proceeding been completed, it would have been unlikely that he would have been terminated as a result of the issue anyway if he had a good record of employment. In its own right, it is not something that you would be sacked for in the ABC, although you would be disciplined.

Senator MINCHIN —I would like to ask about a couple of other issues, if I may. In response to our questions on notice at the last estimates, the ABC indicated that they were happy with the Freeview campaign, although it was anticipated that it may have been controversial for the ABC to run what might have been seen by some of your friends as commercials. I thought it was proper that you did run them but I think you were concerned, although at that stage you were saying that no concern to any great extent had been raised. However, that campaign now has been fairly heavily criticised and has been changed. It was accused of being misleading in terms of the number of channels that were advertised as being available or potentially available on Freeview, and a revised campaign has gone to air. Given that you said you were happy with the campaign in its original format, what was your involvement in the programming being revised?

Mr Scott —The ABC is a shareholder in Freeview. I sit on the Freeview board, as does the Director of Television, Kim Dalton, and Mr Brown and the commercial free-to-air television networks. I think it is fair to say that there has been some debate over when the channels that Freeview talks about will be available—but it is growing all the time. Channel 10 now has its high-definition channel; ABC is going to have ABC3; Channel 9 and Channel 7 have indicated that their third channel, in contrast to their HD channel and their main channel, will be on air next year. So there has been some debate around that. I think most of the debate has come from subscription television, as might well be anticipated. But there is no doubt that, for the Australian consumer who has an analog television set and has been able to receive a maximum of five television channels up until now, the movement to digital television and the purchase of a set-top box or a new television set will generate an array of new television channels that they have not experienced before. That is fundamentally the Freeview proposition, and they will be able to watch that free of charge. There will be 15 channels, including a high-definition channel and two other channels, coming. When ABC3 starts, there will be more than 15 channels. So we are relaxed with the proposition.

The ABC is running a promotional campaign around Freeview, as is SBS. Now the sets and the set-top boxes that are branded with Freeview are available in stores. This is an important part of government strategy to promote the take-up of digital television leading to the eventual switch-off of analog in 2013.

Senator MINCHIN —On reflection, do you think the original campaign was a mistake?

Mr Scott —From my recollection, it is not as though there has been a backflip. This is an evolving campaign and the latest part of it really focuses on the array of options available, which really is timed more with the arrival of the Freeview set-top boxes and branded television sets in the stores and also the start of another multichannel with Channel 10. So my recollection of the Freeview discussions is not that something has been stopped or that there has been a backtrack. It is the evolution of a strategy that will roll out over time—and it will roll out over a couple of years.

Senator MINCHIN —There was heavy criticism of the original campaign for misleading voters into believing that 15 channels would be instantly available. I presume that is why the second campaign has come out.

Mr Scott —No. I think the campaign was going to evolve anyway and I think the channels are coming. It is just in this last year that the commercial networks have been able to multichannel. One is out there, two more are to come, the ABC will have a third channel and the different networks are doing different things with their high-definition options.

Senator Conroy —I think, to be fair, most of the criticism was about the lack of originality with its first ad: it was based on a very familiar ad from Europe for a car. I understand that Freeview have changed their marketing team.

Mr Scott —There was debate around that; I accept that, yes.

Senator MINCHIN —I want to raise one other issue. I do so with a bit of trepidation but also in the context of the admirable repetition of your objective of fairness, balance and impartiality. I refer to Four Corners. Two of its programs in particular have received some controversy, I think. The first was the program that went to air last year about the murder of Labor MP John Newman and the subsequent trial. Mr Paul Sheehan in the Sydney Morning Herald—I guess you would be familiar with Mr Sheehan?

Mr Scott —I am very familiar with Mr Sheehan.

Senator MINCHIN —Mr Sheehan wrote a piece just recently, highlighting the fact that this Four Corners program has really been exposed as being way out of line.

Senator Conroy —It did not promote his favourite bottle of water?

Senator MINCHIN —Senator Conroy, there is no need for rude asides about an eminent journalist of the Fairfax organisation; I would not have thought that was necessary.

Senator Conroy —And a promoter of a particular bottle of water.

Senator MINCHIN —This is a relatively serious issue and I would not have thought levity was appropriate. He referred to the Patten review of this whole matter, which found that virtually everything in the Four Corners program was quite misplaced. It was quite an indictment of that program. Secondly, and I know this is quite tricky, there is the program on Matthew Johns. Perhaps I may say that I am at the disadvantage of not having seen either of these Four Corners programs myself. The program on Matthew Johns was very controversial. It is proper that Four Corners engages in controversial subjects, but I was struck by some of the letters to the newspapers about that program. In particular, one from Michael Potter of Melbourne, Victoria, in the Australian of 22 May, just recently, says:

the Matthew Johns story—

It then says:

The following day, Mr Geoffrey Luck of Killara, New South Wales, picked up on the same letter, noting that the reporter, Sarah Ferguson, excluded any inquiry into Clare’s bona fides. He then notes:

I do not think it was the Christchurch incident, but anyway—

I will explain here for the record that I have absolutely no truck whatsoever with what went on, but I think these are serious matters because programs of this kind cause devastation to people’s lives. Matthew John’s career has been destroyed. In the previous case, as referred to by Paul Sheehan, Nick Kaldas, a Deputy New South Wales Police Commissioner, had his reputation trashed. I am a bit concerned that zealous reporters start off with presumptions and then develop a show to confirm those presumptions; they do not start off with an attitude of fairness, balance and impartiality. Firstly, I would be interested to know your reactions to the controversy surrounding those two cases; and, secondly, perhaps you could explain how Four Corners programs are dealt with internally before going to air. What sorts of checks and balances are in place and are gone through before programs are given authorisation to go to air?

Mr Scott —Thank you for the question. These are important issues. We take the reputation of our news and current affairs team and our programs very seriously. Four Corners has been on air for well over 40 years and, over the years, it has created some landmark journalism. I think we are open to criticism and happy to engage with it. Let me take those things in order.

I think it is fair to say that there is a long tradition in current affairs programs, here and around the world, of reviewing controversial court cases and revisiting them. On a number of occasions, court cases have been overturned as a result of investigative journalism: the Guilford Four and the Hilton bombings. Of course, not all scrutiny by journalist and even reviews do generate cases being overturned. I remember that, in Sydney, Alan Jones for a number of years ran a major campaign into the murder sentencing of Andrew Kalajzich, the well-known Sydney hotel owner. I think there was a royal commission into that, which validated the original finding.

With the case and the trial of Phuong Ngo and his being found guilty of the murder of John Newman, there were questions, and the Four Corners program raised questions that existed over that trial and that sentencing. Where I think my friend Mr Sheehan fails to make the connection is that, subsequent to that program being aired, which it was, a petition was forwarded by ANU academic Hugh Selby, who came forward with a brief of evidence. He did not appear in the Four Corners program; he made his petition after that program. That petition contained some elements that were in the Four Corners program and other elements that were not covered by that program. At that point, Justice Spigelman, Chief Justice of New South Wales, called for an inquiry into the Phuong Ngo verdict on the basis of the petition forwarded by Mr Selby. Judge Patten then did the review. The review was based on the Selby submission. There were some criticisms of that, but there were no criticisms in the finding made by Judge Patten levelled against Four Corners or the Four Corners program. So the disconnect I found in Paul’s article was the fact that the most senior lawman in New South Wales looked at a brief of evidence around the Phuong Ngo verdict and decided, independently and totally separate from Four Corners and the Four Corners program, to call for an inquiry into the conviction of Phuong Ngo, and that conviction was upheld or validated by the inquiry.

Senator MINCHIN —Are you suggesting that Mr Spigelman’s decision was quite independent and regardless of Four Corners?

Mr Scott —No. I am saying he exercises a judgment as to whether, in fact, questions have been raised that should be tested by an independent judicial review. This is an atypical circumstance and is a decision that I would have thought is not undertaken lightly. It was not undertaken in response to Four Corners but in response to a petition made by that ANU academic. I am saying that the ANU academic’s petition, as I understand it, was not absolutely complementary to what Four Corners put together. He prepared other evidence that Four Corners did not cover and vice versa. So it was Justice Spigelman who decided that this verdict should be independently assessed, and it was, and we know the finding that was made.

There can be criticisms of the Four Corners program. Senator Birmingham asked me earlier whether it is ever appropriate for ABC staff to criticise ABC decisions and ABC programming. Media Watch raised some criticisms about the Four Corners program, and I think there are some issues regarding how that was covered. That has generated some debate and we welcome that. Excuse me, my phone is ringing and I think this might be—

Senator MINCHIN —Mr Sheehan.

Mr Scott —Mr Sheehan, who has my number. However, I think it is a long stretch, from Mr Sheehan’s article, to lay Judge Patten’s findings at the feet of Four Corners. I think it was reasonable for Four Corners to ask questions and to test and probe the veracity of a judicial process that found someone guilty of murder. There is a long journalistic tradition of doing that. That the decision was upheld I do not think should be held up as a criticism of Four Corners; if there is debate around it, we are happy to have that debate.

Senator MINCHIN —So you would reject Mr Sheehan’s view that the Patten report was a ‘devastatingly comprehensive rejection of the accusations that had been regurgitated on Four Corners’, would you?

Mr Scott —I think you would find that Justice Patten made no criticisms specifically against Four Corners.

Senator MINCHIN —No; he was referring to the accusations that were made.

Mr Scott —I accept that some of the issues raised in the Four Corners program were not then found or validated by Judge Patten—I accept that—but it does not necessarily follow that this was a wrong program to commission or an inappropriate line of investigation or a program not worthy of being done by Four Corners. Let us move, if you like, to the other one.

Senator MINCHIN —Just before you do, I think Mr Sheehan is coming from the perspective of his concern for the reputation and character of a senior New South Wales police officer, Mr Kaldas. He says here:

I guess the thing that concerns me a little is the extent to which that is—

Mr Scott —I understand that and I understand, of course, that they did make numerous attempts to encourage him to appear on air and speak to these things. As you would understand, in the creation of a program like this, an enormous amount of material is drawn on and then pared back to a 45-minute program.

Senator MINCHIN —The risk I am pointing to is where a reporter might decide from the outset, ‘There has been a miscarriage of justice here and I’m going to use Four Corners to prove it.’ I am concerned that perhaps there might be that mindset.

Mr Scott —I understand that. Let me talk about the Code of silence program and then take some more general questions about how we deal with these things. I think it was an outstanding piece of journalism. I think it has had enormous impact. Phil Gould on the Footy Show described it as the ‘sledgehammer to the back of the head of the code’. I have spoken to a number of people who are involved at senior levels of Rugby League and who have been involved in trying to help the code deal with some of these issues, and they are glad that this program was put to air. It explained, I think, the breadth of experiences around this issue. I think it is important to remember that it was not just about that incident in Christchurch; it dealt with someone breaking into a girl’s room and another assault where the player was named. It also looked at the behaviour of some women who were involved in going out and pursuing footballers. I thought it showed the gamut of experiences. It did name names. It named the names of those whose names were provided to Four Corners. Mathew Johns was approached on a number of occasions and invited to appear, I understand, given the context of what had been said on the record by the woman involved.

I think some of the things suggested in the letters that you have raised are untrue. I thought one of the most compelling characters on the Four Corners program was the police officer who had investigated the incident at the time. They had remained in touch with this woman over time and had said on the record how seriously distressed and concerned she had been by the events over a significant period of time. I think it was journalism of importance and significance. I think we understand the power of these programs, the importance of reputation and the significance of naming people in the way that we did. These decisions are not made in isolation by a journalist; they are referred up to the executive producer of the program and the senior people in the news division. Our legal department was extensively involved in the preparation of both of these stories. But this is journalism of impact and consequence. I expect that we would have had significant criticism had we decided not to name names, particularly if we had names of people who were involved in these events and who had admitted that they were involved in these events. So I think it is a significant story.

The other thing that was said in one of those letters, which I just want to comment on, is the suggestion that somehow the ABC had leaked the story early. The ABC put some of this story on the seven o’clock news because Channel 9 had put some of this story to air on the six o’clock news. It was not the ABC that leaked this story.

Senator MINCHIN —That was four days earlier?

Mr Scott —Yes. Channel 9 put that story out first.

Senator MINCHIN —How did they know about it?

Mr Scott —They understood it. I do not want to go into the detail of it, but clearly employees of Channel 9 had been approached, seeking comment for the Four Corners story, as I indicated earlier. So it was known there, although I am not quite sure of the precise details of that. Reference was made to it on the six o’clock news and then, of course, Mr Johns appeared on the Footy Show that night. But I do not think that was in response to a suggestion that the ABC was running it on the seven o’clock news on the Thursday night; it was a pre-emptive strategy in anticipation of the Four Corners program on the following Monday. I think that chronology is important.

I think this was clearly a significant and important story. I thought the response from Mr Gallop, CEO of the Rugby League, from Mr Gould, one the most distinguished commentators and writers, and from others validate that too, even though there is a very, very significant personal cost—and that personal cost is not just for Mr Johns but also for the people who courageously stood up, stepped forward and spoke in this way. It would have been far easier for them in their lives if they had not done that. I believe that they have been subjected to the most unfair, unwarranted and cruel criticism for their courage in speaking up and coming forward, and I am full of admiration for them.

Senator MINCHIN —There is a dreadful culture in Rugby League, which is a sport I support and follow closely—it is dreadful. I am sorry, I have the same problem you had: my phone is ringing.

Mr Scott —Paul Sheehan.

Senator Conroy —He couldn’t get through to you, so he is phoning him.

Senator MINCHIN —With the way that the ABC handles these things, it is not your task to be ‘leader of the pack’ but to approach them with as much balance and impartiality as you can.

Mr Scott —Yes; but I would encourage you to watch the show.

Senator MINCHIN —I will.

Mr Scott —I think you will see on that show the gamut of experience that football players can go through. I think there was a context placed around the incident in New Zealand as against some of the other incidents that were shown. I do not think it was narrow and I do not think it was isolated in terms of just focusing on that one event. I think it did show the breadth and the complexity of dealing with this culture.

Senator MINCHIN —I watched Phil Gould on the Footy Show and I agree that it was very compelling. But I think this letter writer makes the point that the program certainly did not show the views of the other staff there and that all came out afterwards—the view of the hotel owner regarding this former employee.

Mr Scott —We did put out a statement. In terms of some of the things raised, Four Corners did put out another statement, which was quite unusual. There has been a whole lot of speculation and a whole lot of debate. As I understand it, some of the people commenting on the woman are people whom the woman says she has never met. A whole interesting defence, in a sense, has been run. Four Corners put out a subsequent statement that clarified a whole number of these issues and I am happy to provide you with a copy of that.

Senator MINCHIN —Yes, I saw that statement. As regards the authority for these things to go to air, is there a graded scale; when things are controversial, do they go up the line before they are aired?

Mr Scott —Yes, there is an upward referral process.

Senator MINCHIN —Were you ultimately involved in one of these two programs going to air?

Mr Scott —I don’t think I was on the Phuong Ngo program, but I was aware of some of the work that was underway as far as the Rugby League program was concerned. But the final responsibility for that lay with the senior people in our news division and our director of legal and the legal team that were involved in the story. But there would be occasions when stories are referred to me.

Senator MINCHIN —Yes, but legal people would have been involved in both of these.

Mr Scott —Yes, absolutely.

Senator MINCHIN —That would happen when characters are potentially—

Mr Scott —Yes, absolutely.

Senator LUDLAM —I have some questions that are a follow-up to a discussion that we had in February regarding the ABC’s commercial partnership with Harper Collins. You provided answers to those questions, I think, in mid-April.

Mr Scott —Yes, that is right.

Senator LUDLAM —That was on the 15th. In one of the answers that you gave on notice on 15 April, you stated:

the corporation being the ABC.

Mr Scott —Yes.

Senator LUDLAM —Can you tell us how Harper Collins earns income from that venture?

Mr Scott —I will have to come back with that detail. Some of that will be commercial-in-confidence.

Senator LUDLAM —Some of it will. I will just give you a general sense of what I am after. Is Harper Collins paid a flat fee or a percentage? Is it the same for each title? Do you have a standing agreement or is it negotiated case by case? Does it relate to the number of books that are sold? Information about those sorts of issues was not really given in the answers.

Mr Scott —Let me come back to you with more detail on that.

Senator LUDLAM —That would be great. Do you have a sense of what each of those things is?

Mr Scott —Yes.

Senator LUDLAM —The information that was provided was pretty sketchy. Going to how the editorial decision making occurs, you mentioned when we spoke that that still lies with the ABC.

Mr Scott —That is right. It has full editorial control over all titles and content.

Senator LUDLAM —Can you tell us on what that editorial decision making is based? For example, will books with the ABC imprint be required to have a connection with ABC radio, television or online content?

Mr Scott —It has not always been the case that there has been a connection back, but I think we have a sense of the kind of programming that we focus on and the kinds of issues that we cover. So, if there is a good correlation of that or a good fit to that, we will put books out. At times, under ABC Books, we put out 150 books a year. Spotless, our big seller, like some others, was clearly linked back to local radio where Shannon Lush was first identified as a talent in these matters. Not all of our books will have that kind of link, but it is a decision-making process around the areas of interest to our audience and the kinds of things that our programming focuses on and a decision is made. One of the advantages of having Harper Collins as a partner in this is that there may well be books that they are interested in us publishing under the ABC imprint. If we decide that it is not a good fit for us, they have other opportunities to publish that either under Harper Collins or under other labels that they run. So there is some flexibility under this agreement.

Senator LUDLAM —I think we established last time that the projects can be initiated from either direction.

Mr Scott —Yes.

Senator LUDLAM —How often are you knocking back proposals that they—

Mr Scott —I would have to come back to you on that detail. Really, Harper Collins only assumed operational control of ABC Books on 1 May, so it is pretty early on.

Senator LUDLAM —That is not that long, so we might pick that up a little later. Are the publications that come out under this imprint required to adhere to the editorial policies that govern all the other media?

Mr Scott —The editorial policies do not pertain specifically to books and publishing as an output area, but there are editorial standards and guidelines; we exercise editorial control over those books.

Senator LUDLAM —How are those requirements interpreted for consistency? Who looks after that?

Mr Scott —The leaders of our ABC Books division. We have an executive who is responsible for our books and our magazines. Magazines operate similarly in partnership with a number of different publishers in a similar kind of model to books; she is responsible finally for that editorial decision making.

Senator LUDLAM —Are books just Harper Collins, or are there a number of publishers that you use with books?

Mr Scott —No; books are just Harper Collins.

Senator LUDLAM —With magazines it is still quite diverse?

Mr Scott —Yes. There are, I think, three partners. Limelight, Universal and News are involved as our partners in magazines.

Senator LUDLAM —Just to make sure that I am clear about what you have just said: the same people are responsible for that—

Mr Scott —I am saying that the same executive in ABC Commercial is responsible for books and magazines; therefore, it is responsible for the decision making over both.

Senator LUDLAM —One of the questions that you took on notice last time was what these arrangements would mean for staffing in ABC Books; the answer again was a little bit sketchy. How many staff did ABC Books have prior to the announcement of the Harper Collins contract? Perhaps you could give us some detail on their roles.

Mr Scott —I will have to check; I can come back to you with detail. Actually, more staff moved over to Harper Collins than we may have first envisaged. Harper Collins are very pleased with the people that we had, but I will come back to you with the detail.

Senator LUDLAM —Do they now work for Harper Collins?

Mr Scott —Yes, they do.

Senator LUDLAM —Were they were working for ABC Books formerly?

Mr Scott —That is correct.

Senator LUDLAM —How many staff does ABC Books have now?

Mr Scott —I will have to check on that.

Senator LUDLAM —Rough numbers?

Mr Scott —I do not have that number off the top of my head.

Senator LUDLAM —Could you come back to us with that this afternoon?

Mr Scott —I will see who we can contact, but I should be able to come back to you fairly quickly with that.

Senator LUDLAM —I am after a rough before-and-after picture of how many there were before and who has moved across to Harper Collins now.

Mr Scott —I will have to take that on notice; I am sorry.

Senator LUDLAM —I am specifically after how many editorial staff there are. What is the size of the unit that is making these decisions? Is it one person or is it 50?

Mr Scott —It is certainly not 50. It is a fairly small team. I think around a dozen people work in ABC Books; it is a fairly small publishing unit.

Senator LUDLAM —I will not push you any further until you have had a chance to check those details. Again, it is probably more useful for you to take this on notice: how many books have ABC Books commissioned and how many books have ABC Books published in each of the three financial years leading up to this one?

Mr Scott —We will get that detail for you.

Senator LUDLAM —I would appreciate it, if you could. Also, it would be helpful if you would inform me of any projections or estimates for how many you will be publishing from here on, under the new arrangements.

Mr Scott —Yes.

Senator LUDLAM —Do you have any concerns or have concerns been raised with you that these sorts of commercial partnerships entail an unfair advantage over other publishing companies who are trying to compete with Harper Collins?

Mr Scott —No, I do not think so, really. I think with the books that Harper Collins are publishing separate from us, under their own name and their own imprint, they have no advantage at all. The only books that carry our brand are those we have been involved in editorial decision making on. I think it makes great sense though for the ABC to be in partnership around books, magazines, CDs and DVDs. This is a business model that I think has worked successfully for us.

We are fundamentally a broadcaster. We do radio and television and we are very active online. We are not a book publisher. That is a specialised business that needs detailed understanding around issues like commissioning, printing, distribution and marketing, which are not core capabilities of the ABC. It makes good sense for us to find an experienced book publisher who can be a strong partner for us and bring those capabilities and that expertise into the partnership at the same time that we can bring our insights about audiences into that partnership. Having that sort of partnership means a better business in the long term, more money coming back to us and reduced risk. It is a model that has worked successfully in the DVD, the CD and the magazine businesses for a period of time. Not only does it represent a good return for the taxpayer on their investment in ABC content but it also represents an ability for us to protect the ABC brand over time.

Senator LUDLAM —In the last conversation that we had, you said that the ABC had been given legal advice that it is acceptable for the ABC to promote its own products on air.

Mr Scott —Yes, that is true.

Senator LUDLAM —Did you seek that advice specifically for products in which the contents were being produced by a commercial party in these sorts of arrangements—

Mr Scott —Yes. If you look, you will see that now nearly all the product we are promoting on air is ABC content that we are doing in partnership with someone. Yes, we have legally checked that and we have no difficulties with it.

Senator LUDLAM —Are you able to provide us with a copy of that advice, if it is available?

Mr Scott —I will see whether we can provide that.

Senator LUDLAM —Thank you. I have no further questions; thank you, Chair.

CHAIR —As there are no further questions, we thank the officers of the ABC very much for appearing before the committee today.

 [5.11 pm]