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Environment and Communications Legislation Committee


In attendance

Australian Broadcasting Corporation

Mr David Anderson, Acting Managing Director

Mr Alan Sunderland, Editorial Director

Committee met at 13:02

CHAIR ( Senator Duniam ): I declare open this meeting of the Senate Environment and Communications Legislation Committee. The Senate has referred to the committee the particulars of certain proposed additional expenditure for the 2018-19 year for the portfolios of Environment and Energy and Communications and the Arts and other related documents. The committee has fixed Friday, 29 March 2019 as the date for the return of answers to questions taken on notice. The committee will today hear from the Australian Broadcasting Corporation, the ABC. Under standing order 26, the committee must take all evidence in public session. This includes answers to questions taken on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need assistance, please see the secretariat. I particularly draw the attention of witnesses to an order of the Senate dated 13 May 2009 specifying the process by which a claim of public interest immunity should be raised.

The extract read as follows

Public interest immunity claims

That the Senate

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer's statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009.

(13 May 2009 J.1941)

(Extract, Senate Standing Orders, pp 124-125)

CHAIR: Witnesses are specifically reminded that a statement that information or a document is confidential or consists of advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indication of the harm to the public interest that could result from the disclosure of the information or the document.

Australian Broadcasting Corporation

CHAIR: Welcome back to estimates, Mr Anderson. Do you have an opening statement you'd like to make?

Mr Anderson : Firstly, I'd like to thank the committee for their assistance in rearranging the estimates schedule to accommodate my absence. I'm a firm believer in accountability and appreciate the committee's willingness to allow the ABC to appear at this later date. This is my second appearance at estimates as Acting Managing Director of the ABC. In the five months I've been in the job, I've sought to ensure that the corporation fulfils its obligations under the ABC Act and strives to deliver the best possible service to the people of Australia. That notion of public duty is best demonstrated by the ABC's response to natural events that have beset communities in 2019. Our thoughts go out to those who have been affected by the floods in Townsville and the bushfires that have devastated large swathes of country over the summer.

Community expectations for the ABC and its emergency broadcasting role are high. Our reporters live in the communities they cover. I think our employees have done a sterling job despite the strains on resources. They have supplied around-the-clock news coverage both in regional bureaus and metropolitan newsrooms. They have relayed essential information at times and produced sensitive coverage of victims and survivors. They share a commitment to covering big complex issues, like the drought, well after other media have departed.

As indicated yesterday, I look forward to working with our new chair, Ita Buttrose, and will continue to work closely with other board members of the ABC board to maintain that public remit. I think there is much to look forward to.

I have described 2019 as the year of democracy for the ABC. Democracy requires a well-informed electorate, and the ABC will play a crucial role in the federal election, making sure that the public is across the issues in as many ways as we can through the community links we forge on local radio, through our extensive and specialist news reporting and through our agenda-setting programs and investigations.

In my opening remarks at the last Senate estimates, I pointed out the great faith and trust that the community invests in the ABC. It's built on the principle of independence. It is heartening for me to report that, at a time of declining trust for media outlets across the globe, our surveys show that the trust in the national broadcaster remains high. Trust and support are also built on respect for our workforce and expenditure of public funds. I have no doubt this hearing will canvass the issue of underpayment of some of our casual staff. The fact that there appear to be some flaws in our remuneration of these past and present employees is as concerning to me as it is to those affected. We are working with the Fair Work Ombudsman and relevant unions to identify the extent of the problem and to remedy it as quickly as possible. I offer a firm commitment that all underpayments will be rectified.

Our financial statements came under scrutiny last year. I want to reassure the committee that we have looked at our processes and reporting, and we'll be delivering a balanced outcome for 2018-19. Of course, that commitment to balanced outcomes does not hide the fact that we are working within a tight fiscal envelope, and tough decisions will continue to be made to deliver what I said at the outset was our ambition: the best possible service to the people of Australia. Thank you. I look forward to your questions.

CHAIR: Thank you very much, Mr Anderson. I also welcome the long-suffering Mr Sunderland back to estimates.

Mr Sunderland : Always happy to be here.

CHAIR: I thought I'd be honest and up-front about—

Mr Sunderland : It's the highlight of my week!

CHAIR: Excellent!

Mr Anderson : I'll point out that it's Mr Sunderland's last estimates appearance before he retires.

CHAIR: Is that right? Well, we'll make it as enjoyable as possible for you, Mr Sunderland.

Mr Sunderland : I'm sure all of you will!

CHAIR: My colleagues more so, probably! I have a couple of questions to start off with. They relate to the matter that has been canvassed publicly, not the one you mentioned in your opening statement—that is, the settlement that was reached between the ABC and the former managing director. There's a great degree of public interest in the amount of money and any other terms of the settlement, particularly around the expenditure of taxpayers' money. I'm wondering if you can detail for the committee the terms of that settlement?

Mr Anderson : I mentioned in my opening remarks yesterday, at my appearance before the Senate inquiry, that, with regard to the terms of the settlement, we have a provision in that settlement such that I can provide the Senate committee, the minister and the Auditor-General with that detail. I am happy to do so, but I do request that that be in a private session in camera, abiding by the confidentiality that we have with the provision that is in that settlement.

CHAIR: As I did mention in my opening statement, all questions taken here must be answered publicly. We don't have capacity to take evidence in camera in Senate estimates. Our preference would be, and I think I speak for my colleagues, that the information be provided publicly. We are under parliamentary privilege here, so there are no ramifications for providing information to a Senate committee when the Senate committee asks for it. There is capacity for public interest immunity claims to be made, but, of course, that's a fairly well charted-out course.

Senator HANSON-YOUNG: For the record, I'd prefer we didn't go in camera. Either we have the information publicly or we don't. Your point is that there is public interest in it. I'm not interested in knowing if we can't talk about it publicly.

CHAIR: So the committee's preference is that the information is produced for the committee.

Senator KENEALLY: As a Labor senator, I support the position that you, Chair, and Senator Hanson-Young have taken. I have no prurient interest in knowing this information in camera. Indeed, I think it's a risk to members of this committee if we are told in camera, and then, somehow, the information becomes public. I think it jeopardises our standing; people may cast suspicion upon us. So I take the view that we either know it in public or we don't know it at all.

CHAIR: So, as I've outlined, when we ask questions, the answers are to be provided publicly unless the agency wishes to make a public interest immunity claim.

Mr Anderson : I simply put forward that it is not unusual, I believe, for Commonwealth entities to enter into settlements such as this, and not unusual either for such confidentiality requirements to exist under a deed. We did settle this with an inclusion in the deed that there is an exception, where we consider it appropriate, that we disclose the terms to parliament, government departments, ministers and the Auditor-General, as I stated earlier. I do have a requirement under that deed not to disclose this publicly.

I don't have a minister sitting next to me to reference, with regard to claiming that this in the public interest. I will state that, in the consideration of reaching settlement, what has been foremost in my mind is: what is in the best interests of the corporation; looking at, on balance, what the potential costs to the corporation were of going to full trial; the distraction that that would have caused; and taking into account the expenditure of public funds. I had advice from senior counsel and Bret Walker SC in my considerations of this. We had external legal representation around the amounts, around where we got to. On going to full trial, one estimate was $1 million. Another one, from Comcover, was around $2 million. This will be a claim under Comcover; a claim that we've already submitted. My expectation is that this payment will be made by Comcover. I realise it's still taxpayer funds. Having said all of that, the carve-out does say that I can provide this information to you, just not publicly.

CHAIR: I understand. Thank you. I repeat what I said before; that is, because the answers being provided here are provided under parliamentary privilege, the officers and the entity you represent are not exposed to any liability for providing information that we ask for. We can't take information in camera, it being part of an estimates hearing. If you're not making out a public interest immunity claim, I note the response that you've given to us. We will have to deliberate on that in a private meeting, and perhaps report this to the Senate as a whole and determine further action from that. We will proceed to other questions if you are not willing to answer the question in the terms I've asked.

Mr Anderson : I believe that I'm at a point where I'm going to have to answer your question.

CHAIR: Then please proceed.

Mr Anderson : We went through a process. We abided by what was required of us, with conciliation from the beginning. The parties did start a long way apart. As you know, the adverse action claim was against reinstatement, or, I believe, payment of the remaining term of Ms Guthrie, with 2½ years left to run on her contract. You heard yesterday that there was a payment already made, so it would be minus that. We've entered into negotiation in good faith. I mentioned yesterday that without-prejudice conversations began through former ABC board member Simon Mordant. There was toing and froing to arrive at the number that I'm about to give you. The gross amount of that settlement claim is $730,000.

CHAIR: That's the gross value. There are no other attachments, no other elements to that?

Mr Anderson : No.

Senator KENEALLY: Mr Anderson, last night you mentioned you'd received a copy of the government's efficiency review, which the government commissioned to assist the ABC to work out how to cover the government's cost cuts of $83.7 million, which kick in on 1 July 2019 and are over three years. What is the status of the efficiency review? Has it been finalised or are you reviewing a draft report?

Mr Anderson : I think you asked me the question yesterday as to when I knew it was being delivered. We had received a copy under embargo. That was sent to me. It is a lengthy report. I personally have not read through it yet. I was doing other things—I was busy preparing for today. What I have done is hand it to members of my team to do a quick scan, initially. The scan that we're looking for initially is, not knowing if this is going to be publicly released—I expect it probably will be—to see if there's any information there that is commercial in confidence and to be able to provide advice back to the department if there is something in there, and we'll do that quickly. That work is happening today, and we'll take it from there. My understanding is that it will formally come to the ABC's chair. When that happens we'll take that under advisement. We'll read through the document thoroughly and respond accordingly to the minister.

Senator KENEALLY: If I can be clear, I'm asking: has the government given you a finalised report or one for you to provide some kind of comment on? I understand perhaps you're providing them comment about things that might be commercial in confidence, but is your understanding that what you've been given is, in essence, the final report?

Mr Anderson : I believe so, yes. As I said, we will do a quick review to see if there's anything that needs to be redacted from it, that is commercial in confidence. If we pick up anything with regard to inaccuracies, of course we'll advise back on that. I think the final report is still to be delivered from the minister to the ABC chair. I don't know if there will be any changes that happen between the report that I've not yet read or when it's going to be delivered to the chair, and I don't know when that'll be.

Senator KENEALLY: Have you been given any time frame from the government?

Mr Anderson : I don't believe so, no.

Senator KENEALLY: To the extent that you can answer this, noting your comments about whether or not you have read it, the scope of the review is described as providing 'recommendations on areas where greater efficiencies could be achieved'. Are you able to tell us whether that is what the report does do?

Mr Anderson : I'm unable to tell you that yet.

Senator KENEALLY: The scope of the review said it would also make recommendations around 'greater cooperation, collaboration and sharing of resources by the ABC and SBS'. Are you able to comment on whether it does that as well?

Mr Anderson : Not yet.

Senator KENEALLY: Okay. There's an article in today's Sydney Morning Herald by Jennifer Duke and Fergus Hunter titled 'ABC and SBS to defend core content'. The article states:

… the review suggests the public broadcasters refocus activities to ensure they are more aligned to their charter obligations.

Correct me if I'm wrong, but doesn't that kind of recommendation go beyond the stated scope of the review, given the terms of reference expressly stated that the editorial policies were out of scope?

Mr Anderson : Again, I haven't read the report. If the report does look at editorial content and make recommendations on that, yes, I agree—my understanding would be that that was out of scope. I did have a meeting with Mr Bean and Mr Tonagh at the time and core was mentioned. It was mentioned, though, in reference to how difficult it is for the ABC to stop doing anything, more or less. So I don't know—again, I haven't read the report. But, when it comes to our content, when it comes to strategy and editorial matters, it's a matter for the ABC board and it's a matter for ABC management.

Senator KENEALLY: Does the ABC Act or charter include some sort of concept around core duties?

Mr Anderson : I do not remember any mention of core in the act in full or in the charter, which is section 6 of the act.

Senator KENEALLY: In the course of the review, did the ABC make any suggestion or a recommendation that there be a working principle around the concept of core duties?

Mr Anderson : No.

Senator KENEALLY: I'm wondering how a review of the efficiency of national broadcasters which expressly excludes editorial policies as out of scope could make a recommendation about ABC core duties or core content when it's not a concept in the act or charter and it's not something the ABC itself has raised. Again, noting you haven't had a chance to read the whole review yet, I'm wondering if we are trying to see a charter review by stealth. So let me ask this. The report of the competitive neutrality inquiry, published late last year, found that the ABC was acting in accordance with the principles of competitive neutrality and in accordance with its charter. Isn't that correct?

Mr Anderson : That's correct.

Senator KENEALLY: So would you be surprised if an efficiency review were making recommendations around editorial content?

Mr Anderson : Again, I haven't read the report yet. We will go through it and provide a response to it once we've got the final, once we know that it's final and it's been presented to the chair. Yes, I'd be surprised if there were any specific recommendations around specific content elements, but of course it depends on how they're referenced, and not having read the report yet I don't know. I don't know, if that in fact is true, whether it's couched in 'consideration to be given' or whether it's a recommendation. So we'll have a look at that and we'll provide advice back to the department and the minister.

Senator KENEALLY: Let me go to one specific thing—ABC Life—which has been the subject of some discussion as to whether or not it's supposedly a core responsibility of the ABC. The ABC has been producing lifestyle content for some time; is that correct?

Mr Anderson : Yes.

Senator KENEALLY: Would you please outline why the ABC produces this content and why you think it's within charter.

Mr Anderson : ABC Life was a was a new initiative that we had last year. It came out of what we had as an ideas pitch through what was called the great idea grant. Under the gig, that was one of the options that we agreed to pursue. It's a combination of both aggregating what lifestyle, health and wellbeing content we have to assist Australians from the content that we already have, as well as producing new content in the same vein. As you just mentioned, the ABC has produced content similar to this—lifestyle content, content about cooking—for many, many years. Gardening Australia I think just celebrated its 30th anniversary. Cooking shows have run for the ABC for some time: The Cook and the Chef, Poh's Kitchen. That is to name a few over the years. So, when it comes to health and wellbeing, we think that content is important to Australians, and why not produce that independently to enable people to improve their life?

Senator KENEALLY: If I can turn back to the efficiency review, logic would dictate that, if the efficiency review is suggesting that the ABC does less—if it provides less content and services—then it needs less budget. Again, do you have a sense yet whether that's the tenor of the recommendations in the report?

Mr Anderson : Again, I haven't read the report, sorry.

Senator KENEALLY: Is the ABC aware of what the efficiency review cost Australian taxpayers, either in terms of the work by the independent reviewers, the department, the SBS or the ABC itself?

Mr Anderson : No. I think that's a question best directed at either the minister or the department.

Senator KENEALLY: What about an estimate of what it cost the ABC?

Mr Anderson : I'm unsure; I could take that on notice. I don't think we engaged anyone to help us with the efficiency review, but I'll confirm on notice for you whether there was any external cost. There was certainly a lot of internal time taken to provide information to the reviewers and KordaMentha, who were involved at the time. I can estimate that for you as well.

Senator KENEALLY: Can I come back very briefly to ABC Life before I go into some other areas. From what you said about ABC Life, it sounds like it's an aggregation of what the ABC has already been producing in terms of lifestyle content. I'm not suggesting you haven't come up with additional ideas—

Mr Anderson : There is new content there.

Senator KENEALLY: but is there value for money for the Australian taxpayers in drawing that kind of lifestyle content together? Is there a value to the taxpayer in that?

Mr Anderson : We believe there's value to it, yes. ABC Life is a new initiative, and at the moment I think the team is employed through to the end of this year. I'll have to confirm that for you as well. We'll take an appropriate moment this year to review the performance of ABC Life, what has worked well and what perhaps hasn't worked well. We'll look at it editorially, we'll look at it with regard to audience performance and we'll look at it with regard to the investment in ABC Life that we've made and make a determination at some point. But we would not be pursuing it if we didn't think that it was of value to the Australian people.

Senator KENEALLY: Mr Anderson, yesterday you outlined a $127 million budget hole potential that you're facing, given the government's cut of $83.7 million as well as the question mark hanging over enhanced news-gathering funding.

Mr Anderson : Yes.

Senator KENEALLY: You said you'd done three different scenarios of what that might mean. Are you in a position to tell us what programs or services would be affected if these cuts were to go through?

Mr Anderson : What I meant to imply was that we have three different scenarios that we need to work with at the moment and we have not yet developed specific plans under each one of those yet. It is something that we're still working on, and we will work together with the board on what that might mean.

Senator KENEALLY: Okay. Do you agree with the assessment of the former managing director, Michelle Guthrie, that the cut of $83.7 million would make it very difficult for the ABC to meet its charter requirements and audience expectations?

Mr Anderson : Yes, and I think I'm on record for saying that, after successive cuts or efficiencies that we have either done in response to a government reduction in funding or that we've done ourselves to be able to put more money into content and to meet our rising costs that we've got internally anyway, it is very difficult in my estimation to find $84 million over three years without it having an effect on our services to the Australian people.

Senator KENEALLY: So you would also stand by the statement given by ABC's news director, Gaven Morris, in May 2018 which said of these budget cuts that the ABC would need to cut into muscle to absorb them?

Mr Anderson : I think it's speaking to the same thing.

Senator KENEALLY: On the enhanced news-gathering funding in particular, what would be the specific impact if that funding were not renewed? Would there, for example, be a reduction in regional news gathering or emergency broadcasting?

Mr Sunderland : That funding is important to us, particularly around local news gathering. I mentioned a couple of locations where that funding employs people around the country, and, yes, it would mean a reduction in journalists that we have at the moment as part of our reporting teams.

Senator KENEALLY: Can you remind me what types of locations?

Mr Anderson : It is not limited to these locations, but it would include Bunbury, Renmark, Geelong, Ipswich Gosford, Broome, Alice Springs, Newcastle and the Hunter.

Senator KENEALLY: Would you also please step the committee briefly through the funding ask for enhanced news-gathering? Yesterday you said that ABC had not submitted an NPP proposal for that funding but you'd written to the minister requesting the funding. Have I understood that correctly?

Mr Anderson : That's correct. I would consider that an NPP. The new project proposal is simply a form. I incorporated that in a letter to the minister where I was specifically asking for a number of things. One of them was consideration of a five-year funding window and one was the reversal of the indexation pause. Another was the extension of the funding that sits in the enhanced news program, noting that for the first three years it was higher than what it is now, and asking for an extension at its current level, which would be $43 million over the three years starting from 1 July. I have not had a response yet, but—

Senator HANSON-YOUNG: When did you send that letter?

Mr Anderson : I sent that letter at the end of last year.

Senator KENEALLY: In your opening remarks you did mention the ABC's work in emergency broadcasting in relation to the recent floods and bushfires. Does enhanced news-gathering funding support emergency broadcasting?

Mr Anderson : By its nature, yes. I mean it depends where the emergency is. In particular around natural weather events, of course, you don't know where they're going to be, so it's entirely possible that it affects our emergency broadcasting coverages, yes.

Senator KENEALLY: Why has the ABC adopted this particular approach of writing to the minister to secure funding? Does it have something to do with the indexation pause?

Mr Anderson : Why did I take that approach rather than an NPP? I combined a number of things in that letter. It was an unusual situation in that we were two years into the triennium and we received notification of a budget reduction for after the end of the third year. So my initial understanding coming into the role was that we didn't have a requirement on us to do a submission—that really it had already happened. So it was an unusual situation. In that letter, in addition to those things, I outlined a couple of other programs, like you would in an NPP, so, should there be more money given to the ABC, notwithstanding all those other ones, what we would do with it and what those ideas might be. That was all in one letter.

Senator KENEALLY: How are the triennial funding negotiations progressing? What stage are they up to with the government?

Mr Anderson : The minister has acknowledged receipt of the letter in person and we talked about it—

Senator HANSON-YOUNG: So the post works then?

Mr Anderson : I'm awaiting advice on the enhanced news funding program and waiting advice on whatever the budget outcome is, which is going to come in April, I think.

Senator KENEALLY: Thank you.

Senator HANSON-YOUNG: Just continuing that conversation, the competitive neutrality review panel stated:

The Panel recommends that government considers options, drawing on the UK example, to give a longer term framework for the funding of the National Broadcasters, accompanied by increased transparency and accountability to the benefit of consumers and competition more broadly.

I imagine that must have been a welcome sentiment to find—to hear that the panel has found that and was recommending that. Does that give you any encouragement in terms of the negotiations with government?

Mr Anderson : Well, it does. I mean, we were pleased that the expert panel found that we're working within the principles of competitive neutrality and the competitive neutrality policy, but it acknowledged a number of things for the ABC—with online services to the public we should be able to promote our online content, as we have done with radio and TV. They acknowledge the major competition for domestic commercial media and international companies and that the ABC had been quite quick to adapt in a changing media environment. They were all positive acknowledgements from that review.

Senator HANSON-YOUNG: Far from what was trumpeted prior by some in the Senate wanting to see this as a clipping of your wings?

Mr Anderson : I'll just restate that we were pleased with the outcomes of that review.

Senator HANSON-YOUNG: Could I pull you back to this conversation about ABC Life. You've talked about the elements of the health and wellbeing kind of lifestyle programming being something that the ABC has done for a long time. I think Gardening Australia is obviously a very good example of that. Surely there must also be elements of this that allow you to fulfil your charter in terms of cultural diversity and being able to find new ways to talk about local community?

Mr Anderson : Yes, of course. ABC Life is one way that we can reflect the culture and community of this country, as our charter requires us to do. It celebrates diversity, and there are some very serious stories that are on there as well. Jason Om's piece on early onset dementia comes to mind as being a serious piece of journalism that was published through ABC Life that then got picked up and taken elsewhere. I think that through all these vehicles ABC Life does play an important part of us meeting that charter remit, and it does it through what is an aggregate of an online service for the Australian public.

Senator HANSON-YOUNG: You would have seen the news reports this morning that this element seems to have been attacked in the report.

Mr Anderson : I did note that, yes.

Senator HANSON-YOUNG: Who do you understand to have been given a copy of this report?

Mr Anderson : I don't know. I know that I got a copy of the report and on that email with that embargoed copy were both myself and Dr Ferguson, as acting chair. That was it. We were the only two recipients on that email. Again, it's not unusual to receive something under embargo. We're certainly not going to release it. Again, we'll—

Senator HANSON-YOUNG: Well somebody obviously has.

Mr Anderson : Well not having read the report, I don't know if what was reported this morning is actually from the report or not. So I don't know.

Senator HANSON-YOUNG: For a government that talks a lot about border control, they don't seem to be having very much luck keeping things inside their own tent. You don't need to comment on that. Could I go to budget cuts. Could you total for me what the shortfall currently is? We've got $84 million from the indexation freeze. There were cuts before that though.

Mr Anderson : There was $254 million of cuts that came in 2014. We had our own initiative in between that time which sought to find efficiency through a number of ways. Some of that was through the loss of some management staff we had. That is an announcement that we had that was around our Investing in Audiences strategy. Then we've had the indexation pause of $84 million, and we're waiting to hear on the extension of the enhanced news program, which is $43 million, I believe, over three years.

Senator HANSON-YOUNG: So we're getting close to $450 million, really. That's a lot of money to lose from the ABC budget, right?

Mr Anderson : Yes.

Senator HANSON-YOUNG: What's been the impact on jobs at the ABC over this time?

Mr Anderson : I don't have the information to hand in front of me, but if you mean total number of staff—

Senator HANSON-YOUNG: Yes.

Mr Anderson : we've reduced our workforce, certainly from 2014 levels. I think from memory, and I'll confirm to you on notice what they've been since 2014, the numbers had dropped quite significantly down to I think 2016-17 and then they came up a little bit in 2017-18, but were still below the levels they were in 2014. I'm going to offer another stat—the one that I do know—the percentage of casual staff of our workforce was 12 per cent in 2014, and it's now 10 per cent.

Senator HANSON-YOUNG: In terms of the impact of that enhanced news-gathering program if it's not able to be extended, you've nominated the geographic areas that you think would be impacted. Do you know how many jobs that would be?

Mr Anderson : We estimated approximately 80 jobs.

Senator HANSON-YOUNG: Do you know how many of them are in Renmark?

Mr Anderson : No, not to hand.

Senator HANSON-YOUNG: There aren't many people in Renmark though, are there?

Mr Anderson : No.

Senator HANSON-YOUNG: Would that mean the Renmark bureau would close, effectively?

Mr Anderson : I wouldn't want to speculate to alarm people unnecessarily. No, I wouldn't think that would mean that we're closing a bureau. What I do think, though, is a reduction of that amount of money would be significant. I think it would impact our services and it would take us backwards. I think that having a local presence, the way that we do across the country, particularly in our 48 regional bureaus, is incredibly important, particularly with the withdrawal of commercial media. If anything, that's an area I would like to grow, not reduce. I think it's incredibly important for us to be there to tell those local stories, to inform people in those areas, to inform them as citizens independently and provide that independent fact base, which is incredibly important, and to be able to get those stories out of those areas.

Senator HANSON-YOUNG: I can't remember: did you say Broken Hill was one of the areas as well?

Mr Anderson : I did, yes.

Senator HANSON-YOUNG: Broken Hill, Renmark—these are all areas that are significantly impacted at the moment in relation to the crisis facing the Murray-Darling Basin.

Mr Anderson : Actually, I did not mention Broken Hill. I mentioned Broome.

Senator HANSON-YOUNG: At least Renmark is right in the midst of having to deal with the crisis facing the Murray-Darling Basin and the health of that river system This is at a time when we actually need more transparency in reporting on what is going on, so I'm quite concerned about that.

Mr Anderson : Our presence in these locations is important for all sorts of things—for emergency broadcasting and to bring stories to the attention of the Australian public. That's why we had stories of dead fish so quickly. With the investment that we've put into these regions we've seen stories of a regional basis in the 7 pm news bulletins around the country increase by approximately 150 per cent. I think it's important that we're informing people locally, we can take those local stories and we take them and are able to put them on the national stage. I think that I haven't stated enough that it is so important that we remain in those places.

Senator HANSON-YOUNG: I will change to a different area. Yesterday during the Senate inquiry I asked one of the groups of witnesses—and I can't remember who it was now—and I said I'd come back to you about this: since this managing director/chairman saga, has there been any official staff survey or morale review commissioned?

Mr Anderson : No, there hasn't. It's been awhile since we've done an engagement survey. We've held off doing another survey until we have the time. The decision was around certainty around a chair appointment and certainty around a managing director appointment. And then we'll conduct another survey after that.

Senator HANSON-YOUNG: Okay. Mr Anderson, we were told this morning of an example of political interference at the ABC which hadn't been limited to just the minister's offices or government per se and had involved the Murray-Darling Basin Authority. I'm not sure if anyone's briefed you on this this morning.

Mr Anderson : No, they haven't.

Senator HANSON-YOUNG: It may be, Mr Sunderland, that it's something you're happy to take on notice unless you can answer it today. There's a question around Sarah Dingle's reporting of the Background Briefing piece last year and an FOI that's been done that shows that the Murray-Darling Basin Authority was requesting significant changes to that story, arguing that it had been unfairly done. It turns out, of course, that, given everything we know now, that story was absolutely correct. The question is: what is your response to that, and will there now be some correction given the reporting seems quite fair?

Mr Sunderland : I have some familiarity with that particular story. My understanding of it doesn't quite accord with that description, but let me be clear about what I do know. It was quite a strong and important story. It remains on our website. It was a two-parter, as I recall, done by the background briefing team. I thought it was an excellent piece of journalism. There were complaints raised by the MDBA and others as well, as I recall.

Senator HANSON-YOUNG: The National Irrigators Council.

Mr Sunderland : I believe it may have been, yes. Those complaints were handled in the normal way. They went through our complaints process; they were looked after by our independent complaints team, which reports to me, but I have no decision-making power into that. As a result of that, we determined that there were some errors in the story. They were not errors of fact; from recollection, there was a mixture of both accuracy and impartiality errors, but they went to two issues. One was the way in which some of the data was presented and properly attributed, and the second was the extent to which the Murray-Darling Basin Authority had been provided with a sufficient opportunity to respond to the issues raised. The outcome of that was that there were some minor changes made to acknowledge that. I think that was the correct response. It went through the normal process, and I was very happy editorially. I was involved, subsequent to that decision being made, in talking to the team, dealing with the implications of that and making sure we properly noted those changes. There is nothing about subsequent royal commission findings that in my view change in any way our rulings on that story, because it didn't go to which side's right and which side's wrong.

Were there significant concerns that needed to be raised about the way the Murray-Darling has been managed? Of course there were, and they were properly reported on. It went to precise matters of editorial standards, and there were some minor changes, but I didn't feel that, after those changes were made, it undermined the excellent work that Sarah Dingle had done or the excellent nature of the story. I thought the adjustments that were made were appropriate.

Senator HANSON-YOUNG: All right. Thank you. If there's anything else you need to add, given the evidence that was given to us this morning, or you need to correct anything—

Mr Sunderland : I'll do that before I go.

Senator HANSON-YOUNG: Thank you. There was a story this year done for Landline in relation to the cotton industry. Have you received any complaints about that?

Mr Sunderland : That I would have to take on notice. I'm afraid I don't know.

Senator HANSON-YOUNG: Thank you. Chair, I'm happy to rotate again.

CHAIR: Senator Storer.

Senator STORER: Mr Anderson, I wanted to return to the issue of funding. I think there is quite a critical paragraph that you've provided in your submission to the inquiry into political interference. I know we're dealing with estimates now, but I wanted to reference it because I believe that in it you note:

In order to ensure the ABC's statutory role is carried out and independence not only safeguarded, but seen to be safeguarded, it is essential that the commonwealth guarantee stable and sufficient funding for the national broadcaster. This will ensure that the ABC is not under threat of capricious or arbitrary political decisions that may influence, or be perceived to influence ABC editorial or management decisions.

Is it not the case that the index pause and the concern now regarding the enhanced-news-gathering funding—is it not from your paragraph confirmed that those cuts to funding are creating the perception that political interference is occurring because of the events of last year and the discussions? That surely confirms your point.

Mr Anderson : I'll start by saying that, for the $43 million in the enhanced news program, I've still yet to hear whether that's there or not, so I remain positive and hopeful that that will be extended.

With reference to the indexation pause and the $84 million reduction to our base over the next three, I wrote that—and to Senator Hanson-Young's earlier question—because from my position I cannot see how we can make that funding reduction without affecting services. While there will still be the board and there will still be management that will decide how we meet that funding reduction, ultimately there is a reduction in services to the Australian public that differs from the services that we currently provide today. While we have statutory independence under the act—particularly sections 8 and 10—where we do make sure that we are always independent and we ensure that we have editorial independence, this is the one area where any government of the day can reduce the ABC's funding. That would then have an effect on our services. We would still have to decide what those services would be in that—that would not be directed to us—but it would be impossible to keep the services we have now.

Senator STORER: You refer to services and management, but you also refer to editorial decisions. Are you classifying those editorial decisions as reflecting the cut in services or actually, as we've heard in response from Mr Ollie Wards to the chair that you don't want to bite the hand that feeds you. We want to not do something that would upset the government, because they'll cut further.

Mr Anderson : I think that was a quote regarding the former chair. I don't think Ollie portrayed himself as thinking that.

Senator STORER: Yes. If I didn't express that correctly, I'm sorry.

Mr Anderson : No, that's all right. I'll only restate that, when I mention editorial in that, I am talking about services in that there would be a reduction in what we have of our editorial content to the Australian public. It's not that it would be influenced in any way by government but rather that there would be a reduction in what we can possibly offer.

Senator STORER: Okay. That's all I have right now. Thanks.

CHAIR: Senator Keneally.

Senator KENEALLY: Mr Anderson, I'd like to return to some questions I asked you last estimates regarding the TV show The Checkout. Prior to your appearance at the October estimates, did you seek any briefing on the cancellation of The Checkout?

Mr Anderson : No, I don't believe so.

Senator KENEALLY: Is there any particular reason why not? The cancellation was a topical, controversial public issue.

Mr Anderson : I think that at the time I considered myself across the issue, in that, yes, it was a big deal. I think that happened in July of last year. When I presented at estimates at that time, I think I used an expression like 'I believe' and 'I understand'. Subsequent to giving evidence at the October estimates session, it was brought to my attention that perhaps I needed to go and confirm exactly what had happened, in that this was all third party for me. I knew what my conversations were with the producer. I have since gone and done that. Hence you have a clarification and a resubmission on notice to more accurately reflect the conversations that have happened.

Senator KENEALLY: Yes, we do. But it's not just the evidence that you gave us verbally at estimates; it was also questions on notice that had to be corrected.

Mr Anderson : Yes.

Senator KENEALLY: I'm referring specifically to question 161. Your answer said:

… the ABC requested a return to the Series 5 budget …

…   …   …

The producer declined to negotiate.

How did it come to pass that that was submitted, given that you've now written to the committee on 6 February to correct that evidence? Did you write that question on notice response yourself?

Mr Anderson : No, I did not. I guess in that clarification, you're right that—this is no excuse—we get many questions on notice that need to be managed. By 'many' I mean that there are a lot. The team do a great job in trying to get across the ABC and get responses to questions on notice as quickly as possible. I note that responses to questions on notice are due on 29 March this time round, and there will be plenty that either come in pre estimates, after estimates or during the estimates session. That got submitted quite quickly. It's quite possible that it was submitted for me. I did not see that response before it went through.

Senator KENEALLY: You didn't see the response before it was submitted.

Mr Anderson : I will take the blame for that, in that that submission happened. It should not have.

Senator KENEALLY: Are you saying that the answer to the question on notice wasn't reviewed by you before it was submitted?

Mr Anderson : I don't remember reviewing that question on notice before it got submitted.

Senator KENEALLY: Let me put it this way. When I raised this issue at estimates last year, you said, 'I can talk to The Checkout.' With the greatest of respect, it's evident now that you couldn't. You told us in estimates:

… the producer made it quite clear that simply taking cost out of it … it would not be the show that you know as The Checkout … We sort of reached a position where the producer thought that it was as low as it could go for the show that it was.

We got further evidence in writing that 'the producer declined to negotiate'. Those things aren't correct, are they?

Mr Anderson : I've clarified that on the record.

Senator KENEALLY: I'm asking you to clarify here: those statements aren't correct.

Mr Anderson : Some of those statements were inaccurate, yes.

Senator KENEALLY: You've just told us that you didn't write the responses to the questions on notice, and you don't recall seeing them.

Mr Anderson : That was that one question, 161, that went back to you. It's quite possible—I'll give my team the credit—that they have possibly supplied that to me and I have missed that on the way through.

Senator KENEALLY: The letter that you wrote us on 6 February 2019, which corrects the record—why did you do that? Were you contacted by the producers of The Checkout?

Mr Anderson : I was.

Senator KENEALLY: When were you first contacted by them?

Mr Anderson : I don't recall. I think I had been contacted by the producers sometime after estimates, and then after that written advice to question 161 had been provided on notice and published.

Senator KENEALLY: It sounds like it would have been before the end of last year.

Mr Anderson : I can't recall. I talk to Julian often.

Senator KENEALLY: Do you mean Julian Morrow?

Mr Anderson : Yes, I do.

Senator KENEALLY: Whatever that time frame was—let's assume it was sometime last year, because that was when all of these things happened with estimates and follow-up answers—it seems it's taken at least two months for the record to be corrected, possibly longer considering that you gave those answers in October. Did the producers follow up at all during that period?

Mr Anderson : Yes.

Senator KENEALLY: Is it the responsibility of the producers of the show to ensure that correct answers are given at estimates?

Mr Anderson : It is my responsibility to make sure that we provide accurate testimony and responses to questions at estimates. Internally, I had personally asked for the matter to be resolved. I had varying accounts of different conversations and I just wanted to get to the bottom of what actually happened and materially get across what was meaningful by way of discussion around the budget and what actually happened; hence you see the correction there. I believe that we did get to the bottom of that; hence my letter on 6 February to the Senate committee.

Senator KENEALLY: So we had your verbal evidence and then written answers, both of which had to be corrected. You say you had different advice coming to you and that you needed to get to the bottom of it. I must ask, Mr Anderson: was there an attempt by the ABC to mislead the Senate committee?

Mr Anderson : No. There was no deliberate attempt whatsoever.

Senator KENEALLY: Has anyone faced disciplinary action as a result of this?

Mr Anderson : No.

Senator KENEALLY: Have there been any changes to procedures in providing briefings to you prior to estimates or in providing answers to questions on notice?

Mr Anderson : Certainly, to ensure that I see every answer on notice before it gets submitted, and to double-check that that is the case.

Senator KENEALLY: Do you know how it came to be that you were incorrectly briefed and an incorrect answer on notice was provided to the Senate?

Mr Anderson : How it came to be is that I had received some advice on what had led to this; hence I provided my answers at the October estimates session to the best of my knowledge at that particular point in time. I have since got to the bottom of the substance of the conversations that had happened with other people who sit within the ABC who were dealing with that. To the point is the materiality of how meaningful the discussion was around a budget for a subsequent series or not, whether that had occurred or not and exactly what advice had been provided. You'll see in my clarification that the ABC did not put a specific revised budget back to the producer. On the one hand there is discussion; on the other hand there is what actually happened and what was a meaningful discussion with that producer with regard to looking at a subsequent series.

Senator KENEALLY: I appreciate that but, in all frankness, the answer to question 161 was:

… the ABC requested a return to the Series 5 budget …

That's a very specific claim. And:

The producer declined to negotiate.

That is also a very specific claim. I'm trying to understand how it came to be that, in response to a question on notice, we had an answer that was completely wrong, without basis, and no disciplinary action has been taken and I can't see any particular change that you've implemented to ensure this doesn't happen again.

Mr Anderson : It's an unfortunate error, and I've undertaken to ensure that internally we will make absolutely sure that I have seen every response to a question on notice that goes back. Again, I take the blame for this and I apologise to the committee that a correction needed to be made. I've apologised to the producer as well.

Senator KENEALLY: Is there something else that you could do, potentially, that doesn't have every question on notice bottleneck in the managing director's office? Is there a fact-checking process for these answers?

Mr Anderson : Yes. Again, it's a very small team that is looking after it, and it's not the only thing they do. To expedite this, they will of course go directly to the content teams for a specific answer, when it is specific like this one. The changes we've made are to make sure that I am across those answers word for word, particularly for this one—it's an area that I used to be director of.

Senator KENEALLY: If the content team have given you incorrect advice about the nature of their negotiations about a television show that was the subject of public speculation and controversy, I'm still confused as to why no-one has faced disciplinary action. They misled the Senate committee. They put you in the invidious position of misleading the Senate committee.

Mr Anderson : I will take that on board with me. Obviously we've have taken that up with various people that sit in the content team. But, as I sit here today, disciplinary action has not been taken against any individual as a result of this.

Senator KENEALLY: The ABC has had three separate opportunities now to explain to the Senate its decision to cancel The Checkout, and we're still without an answer. Can you tell us why the show was cancelled?

Mr Anderson : At the time—and I believe I stated this in October—tough choices had to be made. Internal allocation of budget, in my previous role as director of entertainment and specialist, had dropped from one financial year to another. First I was advised that it had dropped by $15 million. Then I was advised that it had dropped by $30 million. Then I was advised that it had dropped a bit more than that. So internally you need to prioritise what it is that you are going to make. You need to be able to operate to a budget. At that point, we did not have the budget to do all the things that we wanted to do. Some of those shows that were in that financial year had already been commissioned and we'd already made undertakings around our allocation. When it came to The Checkout, it was a high-cost program with a declining audience. While we thought that consumer affairs and consumer advocacy were certainly an important element of what we would do for our content plan, at that time the advice was that, at the moment, we could not commission The Checkout for that financial year. It was just not possible. A number of other shows got cancelled. Other shows were in development that we did not go through with. There was a reprioritisation of our content slate in that particular financial year.

Senator KENEALLY: Do you accept, though, that the answers you gave here in estimates and the answers provided to question 161 on notice both implied that the producers of The Checkout were at fault for the cancellation of the show?

Mr Anderson : No.

Senator KENEALLY: Mr Anderson, it says, 'The ABC requested a return to the series 5 budget, and the producer declined to negotiate.'

Mr Anderson : That was the response to questions on notice that went subsequent to that, for which I provided the clarification on 6 February.

Senator KENEALLY: You also said:

… the producer made it quite clear that simply taking cost out of it … would not be the show that you know as The Checkout.

The producer didn't even have the opportunity to have that conversation.

Mr Anderson : No. But, look, that conversation was had. Where it was put out of context was was that a reason in The Checkout itself—and I apologise if that was the representation given with regard to commissioning or not commissioning The Checkout.

Senator KENEALLY: I understand you've made the argument that there were budget cuts and it had a declining audience. Does the ABC, when it looks at the shows that it's going to commission, also consider views on iView and use for other purposes, say for educational purposes?

Mr Anderson : Yes. We look at total audience, which is consolidated audience for broadcast as well as a video player measurement, which is VPN for iView, and we look at the impact of our content. Some programs are there that are highly distinctive, that might have a low audience but be high impact—

Senator KENEALLY: Does the ABC have a consumer affairs show now?

Mr Anderson : At the moment we have elements of—you could argue there are elements of other programs that we have that do touch on consumer affairs. Do we have a show that is dedicated to consumer affairs? No, we don't.

Senator KENEALLY: Is there any one you can point to in the Australian TV landscape? My point is that wasn't The Checkout the only dedicated consumer affairs television show in the Australian TV landscape?

Mr Anderson : Yes.

Senator KENEALLY: So it's quite distinctive.

Mr Anderson : It is distinctive.

Senator KENEALLY: Have the budget cuts inflicted by the government limited your ability to broadcast a show like The Checkout?

Mr Anderson : Previously? No.

Senator KENEALLY: You said you'd had funding cuts.

Mr Anderson : I'd had a funding reduction that was internal. So, as a director within the ABC, that internal allocation from one year to the next significantly dropped. The envelope of the ABC remained the same across that period. It was an internal allocation, which I had to respond to.

Senator KENEALLY: Do you have any plans to recommence negotiations with the producers of The Checkout, or enter into negotiations? I might rephrase my question.

Mr Anderson : How we commission, our decisions to commission and what we're going to commission are not something that I would openly discuss in a Senate estimates committee hearing, but we are talking to that producer, actually, and we have a meeting coming up to talk about the possibility of a consumer affairs program, yes.

Senator KENEALLY: Thank you. I have a couple of questions about international broadcasting. In January, the Prime Minister announced the government will give $17 million to the commercial networks to provide TV programs to the Pacific. Can the ABC advise if they were consulted by the government in relation to this funding?

Mr Anderson : We weren't consulted in the announcement, but we were asked to provide input to a couple of reviews that related to international services. We did that, and—

Senator HANSON-YOUNG: Sorry, can you expand on that.

Mr Anderson : There were two submissions that we made, one of which happened before I got into the role of acting managing director. One of them was a submission to the Foreign Affairs soft power review; it was looking at international services. We put forward that we already have a presence when it comes to broadcasting services internationally. We have an obligation, in fact—it's in our charter to do so. How we meet that obligation at present—

Senator HANSON-YOUNG: Just to be clear, did DFAT ask you to participate in this and to feed something into it or did the ABC do that off its own back?

Mr Anderson : I'll confirm that on notice, but my understanding is that we were asked to put in input and put a submission in to the review. Whether that was from DFAT or the Department of Communications and the Arts, I'm unsure.

Senator HANSON-YOUNG: But your understanding is that you were requested to participate or to feed into that.

Mr Anderson : My understanding is yes.

Senator HANSON-YOUNG: Into the soft power review.

Mr Anderson : We were invited to provide a submission, yes.

Senator HANSON-YOUNG: And you said there were two—

Mr Anderson : I believe there was another one. I can't find the piece in front of me at the moment. We did provide that. Again, my understanding is that we had not heard back from those submissions until those announcements were made. I then wrote to the Department of Communications and the Arts on 6 February expressing our concern that that announcement had been made and looking for an update on our submissions for international services, and also pointing out that under our act section 31AA does state that government funding for the provision of international services must go to the ABC for that intention.

Senator HANSON-YOUNG: Mr Anderson, you weren't in Canberra for the rest of the estimates session a couple of weeks ago, so perhaps you haven't caught up with this—

Mr Anderson : No, I haven't caught up.

Senator HANSON-YOUNG: but I did ask the department about this particular section of the act. I was told that, because they are simply drawing up a contract which is to pay for the content, they're not broadcasting. So it's about how you read it, I suspect. It seems quite clear that they're being as tricky as possible to avoid having to give that extra money to the ABC—$17 million to commercial broadcasters through Free TV is what the contract is going to be worth. The ABC could do a lot with $17 million, couldn't they?

Mr Anderson : Yes. I will note that when we had the Australia Network we were provided specific funding from DFAT for that. My understanding is that that was $20 million a year to provide those services. We continue to run international services. We spend about $11 million a year on that.

Senator HANSON-YOUNG: Obviously the ABC used to do this. It was cut—that was a mistake—and now, rather than fixing it and going back to the ABC, they want to give it to the commercial broadcasters. Do you really think it's appropriate that shows like Married at First Sight are what are being used as our soft diplomacy?

Mr Anderson : I don't know what the intention is. All I can say is that we take our role quite seriously when it comes to our international services. We do spend $11 million out of our appropriation in doing that. I don't believe that Married at First Sight is content that we offer.

Senator HANSON-YOUNG: I'm not sure how our Pacific neighbours will feel getting inundated with episodes of Survivor, either—whether they've got politicians on them or not.

Senator KENEALLY: God help us! What portion of its annual budget does the ABC spend on its international broadcasting functions?

Mr Anderson : That the $11 million that we currently spend.

Senator KENEALLY: The Prime Minister's announcement was basically, as Senator Hanson-Young has somewhat suggested today, a program supply arrangement for commercial content. ABC International already carries commercial content, doesn't it?

Mr Anderson : It does, yes.

Senator KENEALLY: Senator Hanson-Young has asked you if the ABC could use a further $17 million over three years to support its function as an international broadcaster. What would that kind of money allow the ABC to do?

Mr Anderson : That money would expand our services, effectively, and would improve the content that we offer for audiences internationally. Specifically written into the charter, I believe that obligation is there to service the million or so Australians that live overseas and, much like Australia Network, you could do many things with it. You could have a specific news bulletin. I remember Australia Network had about eight bulletins that were specific for that audience. You couldn't ramp it up to be what Australian Network was for $17 million, considering Australia Network was running on $20 million a year. So $17 million would be less, but it would be an improved service than what we have at the moment.

Senator KENEALLY: Have you considered getting your own legal advice about that section of the act?

Mr Anderson : No. I've written to the department and I'm awaiting a response.

Senator HANSON-YOUNG: I did ask about legal advice. They have their own. They wouldn't give it to us. It's interesting. It seems like semantics to me. It's public money. Really the money should be going to the public broadcasters.

CHAIR: That concludes our examination of the ABC today. Senators are reminded that written questions on notice should be provided to the secretary by close of business this Friday, 8 March. Thank you, Mr Anderson and Mr Sunderland.

Committee adjourned at 14:21