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Select Committee into the Abbott Government's Budget Cuts

AUJARD, Mr Steve, President, Save Our SBS

STRADIJOT, Ms Glenys, National Spokesperson, ABC Friends


Evidence was taken via teleconference—

CHAIR: We welcome you both via teleconference. Information on parliamentary privilege and the protection of witnesses has been provided to you. I invite you to make a short opening statement and at the conclusion of your remarks we will ask questions.

Ms Stradijot : I thank the Senate select committee for inviting me to give evidence today. To clarify for those who may not be aware, ABC Friends is the name that Friends of the ABC is moving towards. I speak for ABC Friends and Friends of the ABC groups across Australia. ABC Friends is the major community organisation representing the public's interest in its national public broadcaster. It is a politically independent organisation whose aim is the maintenance of the ABC as a healthy, independent and comprehensive national public broadcaster. ABC Friends' financial membership is around 10,000 and we have many thousands more—Facebook et cetera—friends, followers and members of the public who contact us to express their passionate support for the ABC.

As I said, ABC Friends is politically unaligned. Its membership comprises people who are members of different political parties but mostly none. We challenge governments of any political persuasion that act contrary to the interests of the national broadcaster—for example, seeking to cut the ABC or interfere in its independence. ABC Friends regards itself as a loyal but sometimes critical friend of the ABC and is not always in agreement with its activities. We are unhappy with the cuts the ABC management is presently implementing—the cutting down and downgrading of important services and programs; the reduction in state based sports coverage, resulting in a loss for women's sport in particular; the axing of the state based editions of the 7.30 program and the shutting down of Adelaide's TV production facilities and some regional radio posts. We are alarmed at the loss of 400 staff, a 10 per cent cut to the ABC's workforce. The ABC's staffing has already been decimated over many years, and no-one seriously believes in a service that is so labour intensive that you can reduce staffing so drastically and not affect the extent and quality of the output.

The ABC must adapt to remain relevant. However, managing director Mark Scott's interest to prioritise the development of new digital and mobile services and younger audiences over existing audiences, in the face of inadequate funding, must not be at the expense of other audiences, nor should the ABC's operations become increasingly centred in Sydney. The public broadcaster must produce distinct programming of quality, depth and integrity. Local, state and regional programming is essential. The ABC must meet its responsibility to all Australians as a comprehensive and truly national public broadcaster.

Having said that, the real culprit for the damage that is being inflicted on the ABC is the present government. Prime Minister Abbott promised before the election that the ABC would not be cut. Within months of being elected, the coalition government axed the Australian Network international broadcasting service provided by the ABC. The loss of funding that accompanied this had implications for Australia's international broadcasting but also for the ABC's reporting of international matters on domestic programs. The government cut ABC funding in its first budget and is now cutting ABC funding again. I will not go into the detail of the figures as presumably they would already have been made available to this inquiry by now. The cuts are not small or something that the ABC can realistically be expected to absorb. We can now see that the result would not be merely the so-called back of house efficiencies that do not impact on ABC programming and services. This was a promise of Minister Turnbull when he set up his efficiency review of the ABC—another lie to the public. The impact of these cuts is huge because the ABC was already seriously underfunded to perform the job the national broadcaster is required to do and expected to do by the public.

Leaks from the 2006 KPMG report into the adequacy and efficiency of ABC funding revealed that the ABC was seriously underfunded and that the broadcaster provided a high volume of output and quality for its level of funding. Those leaks were not denied by the Howard government, which had commission the review and refused to publicly release it. The former Labor government increased funding. However, with the exception of additional funding to rebuild the ABC's embarrassingly low level of local Australian TV drama—which had fallen as low as three hours a year after the Howard government's cuts—the increased funding was mostly for new services, not to maintain or rebuild interesting services. For example, funds were provided for the ABC to establish the new advertisement-free children's TV channel.

The present government's funding cuts come on top of ABC funding being cut and eroded by former governments that failed to maintain the national broadcaster's funding in real terms over many years. I have provided for tabling a single sheet with some measures to indicate the declines and the already inadequate level of ABC funding before the present government's cuts. It is not intended that the committee members read it now, but we would ask that you consider the information it contains.

Over the years, the ABC has already been doing more with less, and audiences can see the result—for example, fewer ABC produced editions of programs such as Four Corners; more lightweight programming that cost less to produce; less well-researched programming; greater centralisation of ABC production in Sydney; and endless repeats. The actions of this government are not about efficiency; they are those of a government that is hostile to independent public broadcasting. The government's cuts appear to us to be intended to intimidate, curtail and control the public broadcaster. This is possibly because the government wants to shut down independent scrutiny of its policies and actions. Or it is possibly because the government wants to buy the support of, and/or repay a favour to, the Murdoch media, which views public broadcasting as a competitor for audiences—that is, its profits—and which campaigned for this government's election.

In conclusion, the ABC is a great cultural institution which provides a vital service to the nation and enriches the lives of its citizens. Independent opinion polls regularly reveal that it is valued by more than 80 per cent of Australians. The country's national broadcaster should have the respect of all politicians and governments regardless of political persuasion. The damage that is being inflicted on the ABC is extremely disappointing and also reflects poorly on every member of this Liberal-National government.

CHAIR: Thank you. Mr Aujard, I now invite you to make an opening statement and then we will throw to questions.

Mr Aujard : Thank you for inviting Save Our SBS to this hearing. Save Our SBS has a dual purpose—advocating as a supporter and friend of SBS and also for consumers of SBS. Whilst we put the case for greater public funding for SBS, we also scrutinise it to see that it operates in a fair and transparent manner and is faithful to its charter. The Prime Minister and the Minister for Communications have said that the cuts to SBS and the proposed changes in the advertising arrangements are an efficiency dividend. We say that anything that puts into doubt SBS's ability to adhere to its charter is not an efficiency dividend.

Aside from the direct cuts, there is very strong evidence that any increase in advertising would seriously impact on SBS's ability to adhere to its charter, thereby making it less efficient not more efficient. But the Lewis review recommends a doubling of advertising in peak viewing periods, plus product placement. Page 85 of the review acknowledges that 'further changes to advertising content may risk charter related content and decrease distinctive content in favour of a broader, more populist schedule'. Such concerns are not some airy-fairy whim; they are based on solid evidence that points to the struggle SBS faces to be faithful to its charter. That struggle increases proportional to the placement of advertising. The Lewis study noted this, saying:

… there will be greater pressure on SBS management to consider the trade-off of delivering on commercial expectations, against delivering those functions described in the SBS Charter.

This morning SBS's managing director, Mr Ebeid, referred to the polling Save Our SBS did of 2,044 viewers of SBS last year. He said the methodology was flawed because the survey did not ask, and I am paraphrasing, 'Would you like a reduction in advertising and suffer a loss of services too?' Mr Ebeid said if that question had been asked, then most people would say, 'Keep the ads'. He said we in fact did not even ask the question about keeping the ads?' We actually did include the line of questioning that was said to be absent; it is the control question in the study. Respectfully, any suggestion that the methodology was flawed is wrong. For the record, 93.4 per cent said they would opt to restrict advertising between programs, even if that meant little or no expansion of SBS and less local content, whereas 6.6 per cent said they would prefer to keep in-program commercial breaks—as it is now—with an expanded SBS and possibly more local content.

But there was more than one poll—there was the one of 2,044 viewers, which had a 2½ per cent margin of error, and the other of 1,733 viewers—and they were not just about 'do you want ads or not'. They also looked at the impact of advertising. In these two comprehensive studies, and upon reading SBS's charter, three-quarters of viewers nationally said that since SBS TV introduced in-program advertising it is less faithful to the charter now than it used to be. This strongly suggests that any increase in advertising in any part of the schedule will worsen SBS's ability to adhere to its charter obligations. There is a graph of that on page 7 of our submission.

Studies of the impacts of advertising on a public broadcaster are nothing new. In 1999 a study of public service broadcasters in 19 different countries commissioned by the BBC and carried out by McKinsey and Co concluded that an increased dependence on advertising led unavoidably to a more populist and a less distinctive schedule. And then there were the findings of Dr Chris Lawe Davies from the University of Queensland, now senior lecturer in journalism, in the same year when he completed his PhD thesis on SBS program policy. And the list goes on.

The whole purpose of TV advertising is to on-sell audiences to the client—that is, to the advertiser. There was a time when the viewer was the client, but all that changed with the advent of in-program advertising. When SBS was permitted to broadcast advertisements back in the 1990s, with a cap of five minutes per hour, we were told SBS would never reach that and for many years they did not. But SBS now have a 100 per cent fill in prime time on SBS One—virtually every night. If section 45 of the SBS Act is amended as discussed, then eventually SBS will manage to fill the entire 10 minutes per hour and that will change the flavour of SBS. You and all viewers of SBS television will see 14 minutes of disruptive commercial breaks every hour from 6 pm to midnight and during sports broadcasts. We are not talking about six or seven minutes; it will be 14 minutes. That is the same as commercial TV. Currently SBS has five minutes of ads and close to four minutes of promos per hour in prime time. The duration of promos is not restricted under the act. If SBS were to double the quantity of advertising to 10 minutes while retaining four minutes of promos, be prepared for 14 minutes of intrusive commercial breaks every hour at night. The impact on the charter adherence will be significant. No-one wants that. By the way, it is not just television; the proposal also includes SBS Radio.

Before closing, I would like to quickly make a couple of other points. At the Senate Environment and Communications Legislation Committee inquiry on 25 November 2014, Senator Canavan asked if SBS wanted to increase advertising before the Lewis review. Answering for the Department of Communications, Ms Nerida O'Loughlin, Deputy Secretary, and Dr Simon Pelling, First Assistant Secretary, Consumer and Content division, said, over time, 'yes'. Dr Pelling absolutely confirmed that SBS had raised increasing ads before the Lewis review, saying: 'It is not something that SBS has been secretive about'. We do not for a moment doubt the honesty of the individuals just named but for the record, aside from an informal comment made in mid-2012, we as a major stakeholder in SBS—and the board of management have referred to us respectfully as a major stakeholder from time to time—have never been told of this specific proposal. I have asked my colleagues at senior level within the ethnic communities, and was told that they too have never been informed by SBS that this was on the cards.

Regardless of who came up with the idea, or when, there is no community support to increase advertising, albeit through averaging. We do not want SBS to resemble commercial TV at any cost. It is a bad idea.

When SBS introduced in-program advertising in late 2006, SBS promised that all the money would be used to commission more local content. A fine ideal—but it failed. On 19 October 2012, Senate committee question No. 2386, subquestion 11(b), revealed that SBS invested only 37 per cent—$17.4 million—of their advertising revenue on local content. SBS are not required by any law or regulation to broadcast any local content, so any claim now that we will see more local content as a benefit of increased advertising is entirely unbelievable. Lastly, a word about the figures: there are at least three sets of official ad revenue figures going around. They are summarised in our submission. Apparently no-one can agree on the figures. This seems like a lot of pain—to present TV programs in a disrupted manner, with bad TV presentation, under a cloud of official figures that are all very rubbery.

Finally, other than for advertising, in the main the Lewis review did not compare efficiency against revenues but only expenditure, and the method to arrive at the make-up of the $53.7 million worth of cuts lacks transparency. It is not possible to comprehend how the government arrived at specific reductions, or how SBS fares against other broadcasters. If it were compared, we believe—at least in terms of monetary efficiency—SBS would be proved to be highly efficient: not worthy of any cuts. From our perspective and that of the wider community, the conversation is all wrong. Rather than talk about cuts and increased advertising, the parliament should be talking about supporting SBS, and finding a way to remove all advertising from within programs—not double it; and certainly not agreeing to a practice that threatens SBS charter adherence forever. When more than 80 per cent of viewers say—and they have—that advertising ought to have no place on SBS but should be left to commercial broadcasters instead (the reference is on page 15 of our submission), we would ask that the committee resolve to reverse the commercialisation of SBS, not ramp it up. SBS is a vital link in engaging culturally and linguistically diverse people in our broad, multicultural society, and does not deserve to be treated like this. Thank you.

ACTING CHAIR: Thank you very much, Mr Aujard and Ms Stradijot.

Senator RUSTON: I have just had a look at the ABC Friends website and, whilst I am not an official Friend of the ABC, I can assure you that I love my ABC. How many members do you have, Ms Stradijot?

Ms Stradijot : Around 10,000 official, paid-up financial members but, as I said, these days it is a lot more when you add in Facebook and other places—because the tendency, particularly of the younger generation, is not to belong to an organisation in the same way but to opt in and out of activities.

Senator RUSTON: Sure. Do you regularly survey your membership about their views on certain things that are going on?

Ms Stradijot : Well, we do not need to. We do not need to put out surveys because we get those views back: people have a great sense of ownership of the ABC and—both the members and the public—when there is anything happening of importance, people will contact us on a big scale to let us know what their views are about it.

Senator RUSTON: When you put forward the views of the friends of the ABC or the friends of SBS, such as you have done in this situation to this hearing, how do you formulate your submissions to us?

Ms Stradijot : For ABC Friends, we have the input from those people. The members in turn elect committees. We have a range of local groups and they give feedback. There are also times when we do petitions about matters and so they would or would not decide to support those petitions. That is also an indication of people's views on the policies. They attend meetings—there is a whole range of ways these days; a lot more is done electronically as well, of course.

Mr Aujard : For Save Our SBS, it is the same, basically.

Senator RUSTON: At the end of your submission, you made a number of very inflammatory political comments that this was not about efficiency; this was about hostility towards the ABC. After listening to the first three-quarters of your submission, which was all fairly well balanced and had a certain amount of substance to it, you finished with this blaze of political comment. How did you decide that that was what was going to represent the friends of the ABC? In all instances, do the friends of the ABC end up being so political?

Ms Stradijot : This is the feedback that we get and that is our assessment. Each state has elected committees, elected by the members, and those people make assessments of what is happening.

Senator RUSTON: Where did they get that from?

Ms Stradijot : It may seem political, but if a government of some other political persuasion was doing the same, they would attract the same criticism.

Senator RUSTON: No, I was not suggesting that you were being party political. It just seemed a very odd statement at the end of your submission that this is not about efficiency; this is about hostility. When you look at the friends and what your organisation looks like online, I just do not understand how you end up in a position where that is the feedback that you are getting. How are you getting that from the 10,000 members? If I spoke to your 10,000 members, would the majority be solely engaged and come up with a political statement like that?

Ms Stradijot : The evidence is that it is not about efficiency.

Senator RUSTON: The evidence?

Ms Stradijot : The evidence is that it is not about efficiency, when you look at the ABC's funding and what it has to do. When you look at the erosion of the ABC's funding over the years, the evidence is there that this is not a cut for efficiency.

Senator RUSTON: Where is the evidence for hostility?

Ms Stradijot : The hostility is based on the comments of individual members of the government about the ABC. It is also based on the decision to cut the ABC's funding. On this information sheet, the ABC's funding has been cut out of all proportion in a lot of ways. The evidence is also on the basis of the first appointment to the ABC board of someone whose background is in the commercial media and the financial area, and almost appearing to be a reward for having devised the blueprint to cut the ABC.

Senator RUSTON: Okay. We will leave that one there. This one is particularly about the ABC as opposed to SBS, who has a very specific charter. Do you believe that one of the roles of the ABC is to be the broadcaster of last resort, the broadcaster that picks up areas of market failure?

Ms Stradijot : The Australian Broadcasting Act gives the ABC its role: the ABC has a responsibility to be a comprehensive public broadcaster. That does not mean that it is the media outlet of last resort and is only to pick up what the commercial sector does not do. It means just that: to be a comprehensive public broadcaster, providing programming for a diversity of interests and a diversity of people.

Senator RUSTON: So, you do not support the position that they should be the broadcaster that fills the gap where market failure occurs?

Ms Stradijot : No, we do not.

Senator RUSTON: So, who do you think should fill that role?

Ms Stradijot : And neither does the parliament. As I said, it is in the act that the ABC be a comprehensive public broadcaster.

Senator RUSTON: I do not know that that necessarily says that it does not think it needs to be the broadcaster of last resort; it probably just says that it does not only have to be the broadcaster of last resort. It is just very interesting what you are saying. I am just wondering: if you do not believe that the ABC is the broadcaster that fills the market-failure gap—for instance, rural, regional and remote Australia et cetera—then who do you think should fill that role? Or don't you believe that people who live in remote communities deserve to have a broadcaster?

Ms Stradijot : I think that is twisting the words, and I would not put that it is being the broadcaster of last resort to actually meet a very important role of the interests of regional country people. I think that is an important part of what the ABC should do; that is one aspect of its role.

Senator RUSTON: Do you think that part of its role should be prioritised above other roles that it has?

Ms Stradijot : No, I do not. I think the ABC is a national broadcaster and it is meant to cater for a diversity of people and represent a diversity of interests. And I think that the interests of country Australians are important, but I think the interests of other Australians are equally important. I also think that in catering for people in the country—and I think I can speak firsthand, given that I was born in and grew up in the country, it would be very short-sighted to think that country Australians are only interested in local country programming. Like any other ABC audiences, there is a range of people. They are interested in science, music, gardening, the law, literature, health, local drama, and children's programs without advertising. They are also interested in national matters that affect their lives, and they are interested in international matters. So, I think it would be very narrow to assume that just looking after country services or regional services would be sufficient to cater for the interests and needs of country Australians.

Senator RUSTON: I do not know that that is necessarily what I was asking you. I think what I was asking is, if you have a situation where there is no other service available in a particular community, do you believe that the provision of an ABC service should be prioritised within the ABC's prioritisation of its resource allocation to ensure that all Australians have access to the communications that the ABC is able to provide?

Ms Stradijot : No, I do not. All Australians also need other important services. They need to be informed on important matters like science. They need to have the government scrutinised, and what I am saying is that—

Senator RUSTON: Sorry; I am not explaining myself properly. Sorry for cutting you off, but I know that my colleagues want to ask some questions as well. I was not necessarily talking about it being entirely local content. I am actually talking about the provision of a broadcast service, whether it is a range of things that are international, national, state, and local content—the local whether, and in rural and regional communities, having the local weather is pretty important—and whether the actual broadcast service itself, rather than local content, is something that the ABC should be prioritising vis-à-vis that the fact that they are closing five regional radio stations has been announced in this last round of actions by the ABC.

Ms Stradijot : But those radio stations cannot operate and get the programming and information about these other important areas if work on that is not being done at state and at national levels. So, yes, I agree that they are important services and they should be maintained—absolutely. But so do I believe that a whole range of other services should be, that are just as critical to country people and to other people as well.

Senator RUSTON: Well, coming from the country I do not have a lot of comfort that Friends of the ABC are looking after my best interests, but thank you very much, and have a lovely Christmas.

Ms Stradijot : Thank you. You too.

ACTING CHAIR: I am not sure the government is either.

Senator LINES: On that question, certainly National MPs and senators have made a lot of noise about regional closures and yet they were obviously sitting in the cabinet room when the decision to cut the ABC was made. What would you say to that?

Ms Stradijot : I think I probably answered it partly in the earlier question from Senator Ruston. I think it is an extremely limited way of looking at what the interests are of country people. ABC Friends has a large number of country members, because the ABC is so important in the country. The feedback that we get is that, yes, they are interested in country and local regional programming; however they are also interested in a whole range of other national and state programs and that the Nationals would not be representing their interests to be simply quarantining regional services while allowing other parts of the ABC to be cut.

When I go and speak to groups in the country, for example, I am regularly told by people that, when it comes to entertainment, they cannot afford to be travelling down to see the shows in the city and they depend on the ABC to rebroadcast a particular performance. The ABC is more important not only in terms of information but in entertainment to a lot of those people. If the ABC is to be cut in those areas to maintain only the regional services, it would still be a serious loss to those people.

The other concern I have is that it is very short-sighted as well as being wrong for country people. If the ABC starts to cut some areas of its programming, then next time round when a government makes further cuts to the ABC—and that is likely to happen—there will be even fewer people arguing for the ABC to continue. There will be fewer people who think that the ABC is doing things that are relevant to them. If any group in the community were to argue for their area to be maintained at the expense of another, in the end we would all lose. It would be a downward spiral for the ABC.

Senator LINES: There has certainly been much comment in the media, and I have had complaints made to me as a Western Australian senator about some of the important areas the ABC plans to cut as a result of the Abbott government's cuts to the ABC. Does ABC Friends have any views on what programs should be cut? That seems to be where we have got to, and we heard today from other witnesses about what is going to be cut between Catalyst and Compass.

Ms Stradijot : Yes and no in that we do not delve into specific programming, because it is not really our mandate but areas of programming we would have a view on. We look at the areas of programming that we say are important and should be maintained and would argue against those being cut but not to a point where we would actually say, 'That should be maintained at the expense of another program.' What we would say is that the ABC is an important service like any other service that is funded through taxes. The public actually support the ABC. I have not seen a survey for a while but earlier surveys showed that people would be happy to pay even more for the ABC. It is important that the ABC fulfil its charter in all areas and that it is funded to do that so that we do not get into a situation of saying that parts of the ABC will be cut in order to maintain other parts.

Senator LINES: Thank you. I do not have any further questions.

ACTING CHAIR: To either of you—and we will wrap up shortly—is there anything in particular that you wanted to get on the record while we have got you both? Otherwise we will wrap.

Mr Aujard : I would like to say something, if I may. We were surprised when there were any cuts announced to SBS. We had always thought that SBS was such a highly efficient broadcaster in terms of their dollars. It was already funded way below all the other networks that it was incomprehensible that it would be possible to cut its funding, because there really was no fat on SBS. So we were completely surprised that cuts were applied to SBS to the extent that they were.

Senator LINES: I think we were also very surprised, when we had commitments from the government prior to the election that there would be no cuts to SBS or ABC.

Mr Aujard : That sums it up exactly.

ACTING CHAIR: 'Surprise' is one way of putting it.

Ms Stradijot : There is something that I would like to put to the committee. I ask that they consider the idea of there actually being a Senate inquiry into a suitable formula or mechanism being developed that guarantees the national public broadcaster is properly funded to fulfil its charter commitments. That way we would not be in a situation where we have, for example, any government misusing ABC funding to try and control or curtail the ABC and we would not be in a situation where ABC Friends is seen as attacking a political party for saying that. In the end, of course, the government decides the appropriations, but if we had some sort of process that was independent of the government, if there were some sort of process for developing, as I said, a formula or a mechanism to work out what adequate funding would be, I think that would be very useful.

The other thing that I think is really important and that should be considered is that, although these cuts will have a serious impact on the ABC, the impact is also a result of the ABCs funding having been run down over a long period of time, and that is the result of an inadequate indexation system. The problem is that the ABC's funding has not been maintained in real terms. So another term of reference for that inquiry could be to look at what might be a more appropriate indexation system for the type of service that the ABC is, which is of course labour intensive, so that its funding is maintained in real terms.

ACTING CHAIR: Thank you. It may be some time before we are able to hold an inquiry into that specifically, but thanks for putting it to us today. If there is any background material or work on a formula, as you put it, that might assist us, then feel free to bounce that through. I would like to thank you both and thank all of the witnesses who have given evidence to the committee today. To you particularly, we really rely on independent advocates to speak without fear or favour, so thanks very much for coming along today. I declare this meeting of the Senate Select Committee into the Abbott Government's Budget Cuts adjourned.

Committee adjourned at 16:42