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Friday, 18 August 1989
Page: 422

Senator ALSTON —My question is directed to the Minister representing the Minister for Transport and Communications. Did the Minister give undertakings to the Australian Broadcasting Corporation in March 1988, as stated by the ABC Board in its 1987-88 annual report and again in a letter to the ABC in July 1988, that the ABC's 1987-88 Budget allocation of $431.1m would be indexed to the real rate of inflation for the following three years? Was this explicit commitment approved by the Minister for Finance? If so, why did the 1988-89 Budget Paper No. 1 merely commit the Government to a guaranteed funding figure of $450m based on the estimated inflation rate? Was not this latter statement in direct conflict with the Minister's press release of 23 August 1988 in which the Government pledged to ensure that base funding for the ABC would be guaranteed and made inflation-proof? Has the ABC been notified at any stage that Senator Evans's public and private undertakings are now inoperative? If not, on what basis does the Government now purport to walk away from its earlier commitments?

Senator GARETH EVANS —The Government's commitment was to index and maintain the real value of the ABC's grant in 1987-88, less the efficiency dividend which is demanded of all statutory authorities. That commitment was formalised by a Cabinet decision which specifically identified a cash figure of $450m for the 1988-89 financial year and made it clear that that particular cash figure would be indexed by the appropriate indicator so that a real rate of return would be achieved for the following two years. The difficulty that has arisen is that the figure of $450m, which was identified in perfectly good faith by me, the Cabinet and the Government, was based on an estimated inflation factor rather than the actual outturn factor. In fact, the outturn figure was slightly higher than that which was applied when the original estimation was made, and that has generated the angst that we have seen in the public print.

I made it perfectly clear to the ABC at the time this matter was raised with me that some problem of this kind could arise if the 1988-89 inflation outturn figure proved to be different from that which drove the original estimate. I made it clear in response at that time that the ABC would have to live with that possibility, and that if it felt it was being disadvantaged it would have to approach the Government at a later stage. That is where the matter was left. I think the real situation has been pretty well understood within the ABC, despite the hype and drama that we have seen in recent times. Although the commitment has been expressed in various ways, including by me in some of the correspondence to which Senator Alston refers when I wore that earlier hat, the truth of the matter remains that the commitment was as I have described it-$450m maintained in real terms for the following two years. The fact remains that the ABC was aware that that was what it was locked into very shortly after that decision was made last year.

Senator ALSTON —I ask a supplementary question, Mr President. I note the Minister's statement that the agreement was based on a figure and not a formula. Does the Minister want to take the opportunity to deny the welter of press reports giving chapter and verse of a typically arcane formula agreed to by the Minister and indicating that he has been comprehensively rolled by his good friend and colleague Senator Walsh? In particular, does he want to deny reports which indicate that he has accused Senator Walsh of either lying or being dishonest in his wording of the Cabinet minute?

Senator GARETH EVANS —The difficulty one confronts when faced with reports such as this is that to correct them involves opening up the internal proceedings of the Cabinet room in a way that I find wholly inappropriate. I simply want to say that reports of the exchanges that have taken place on this issue between my good friend and colleague Senator Walsh and me have been grotesquely exaggerated. We remain the best possible friends, as indeed we have throughout the course of that particular exchange; and I would never accuse Senator Walsh in any context whatsoever of lying, dishonesty or even, for that matter, inhumanity.