Australian Broadcasting Corporation

[12:35]

CHAIR: Good afternoon, Mr Scott, and welcome to what I understand is going to be your last appearance at estimates before this committee. On behalf of the committee I would like to thank you very much for your contribution to the estimates process. On behalf of myself and committee members past and present, thank you very much for your appearance and your support of this committee and for all the work that you have done in this role. Congratulations and thank you.

Mr Scott : Thank you, Senator. I appreciate that.

CHAIR: Would you like to make an opening statement?

Mr Scott : No, thank you. I am ready to answer the committee's questions.

Senator URQUHART: I echo the comments of the chair, Mr Scott, and I did notice a smile on your face when she said this was your last estimates. I want to take you to question on notice No. 172, to which you provided a response. Thank you for that. It was a breakdown of the number of employees in the different bands and groups. I am happy for you to take this on notice because I do not know that you can do it here, but I wonder if you can provide a breakdown of the number of those employees in those bands that are non-ongoing?

Mr Scott : We can take that on notice.

Senator DASTYARI: Mr Scott, I think it is worth acknowledging your incredible stewardship of the ABC over two terms. The mark of what you have been able to achieve with the organisation, particularly in moving to the digital space, is going to leave a very lasting legacy. The mark of how well you run an organisation is whether you leave it in a stronger position than the one you found. Your ability to be able to move the ABC into this new digital space and to engineer what has obviously been a very big shift and transformation for the organisation deserves acknowledgement. I am sure there will be many tributes in many places recording your contribution. I think you should be congratulated here again for that.

Mr Scott : Thank you, Senator.

Senator Fifield: Chair, I was going to make some remarks at the conclusion of Mr Scott's appearance today, but I might take the opportunity to do so now. We all appreciate that Mr Scott is coming to the conclusion of his term as Managing Director of the ABC. It has been 10 years of service to the nation through the role of Managing Director. That is a serious tour of duty. Mr Scott has always had the benefit of 150 editors-in-waiting in the House of Representatives and 76 editors-in-waiting in the Senate to assist him in his duties. He has had the helm at a time of incredible technological change, where consumers have an ever-widening range of choices as to how they want to access their media. The ABC has had to adapt at that time. Mr Scott has given his all to the role. Can I take this opportunity, although there will be other opportunities, on behalf of the government to thank him for his service and to wish him well in his next incarnation. I have previously said of someone else who works in this building that they have an almost Doctor-Who-like capacity to periodically regenerate. I think that could also be said of Mr Scott.

Mr Scott : Thank you, Senator.

CHAIR: This reminds me of Mr Chapman's statement this morning. He served a similar period in the portfolio. It reminds us that you also would have seen six prime ministers, five communications ministers, six department secretaries, six estimates committee chairpersons and many other such meetings. Again, that puts it in perspective. Thank you.

Senator DASTYARI: You have outlasted them all.

CHAIR: Senator Conroy, do you want to say a few words?

Senator CONROY: On behalf of the committee, I want to associate myself with the chair's comments, and at a personal level to thank you for all the quite extraordinary work you have done over however many years it has been now. Your leadership in pushing the digital transformation, your ability to see the future needs of Australian citizens and your future thinking has placed the ABC in an extraordinarily strong position for your successor. While there have been difficult times as your budget has moved up and down during your time, your professionalism and ability to work through the issues—the introduction of the kids channel, the introduction of ABC 24, the digital online services programming, have been an extraordinary testament to the professionalism of yourself and the team that you have had with you over the many years. I wish you luck with whatever you have planned for the future. As one of the genuine Whovians in the building too, as always, I would like to thank you for protecting Australians' ability to watch Doctor Who ongoing. That is a real testament to your foresight. Good luck and thank you.

Senator DASTYARI: I have a couple of matters. There is one that I will not begin with yet, if the committee is going to break in 10 minutes. That will take a bit longer. There is a brief matter that I want to address now. It was touched on earlier this morning by Mr Ebeid. I am not sure if someone has had a chance to find it.

Mr Scott : I saw it.

Senator DASTYARI: That related to two matters. One was to do with Dateline and Foreign Correspondent being put in the same time period, but also to an earlier matter about the FFA.

Mr Scott : I am happy to address those matters. On the FFA matter, I would simply point out that the Asian Cup was broadcast in January last year. We have had estimates hearings in February, May and October where we could raise and discuss this matters, and we have. I would point out that it was the ABC's top rating program on television last year. FFA believes that the ABCs coverage was absolutely outstanding. It was outstanding because we bought an integrated coverage on television, radio and online, which dramatically increased the awareness of the Asian Cup in this market and led it to be an extraordinary financial success for FFA.

I would point out, as we pointed out at the time, that the FFA approached us to bid this matter. We had it indicated to us that they did not feel that SBS had indicated significant intention around about, so there was no bidding war. We put in one bid and one bid only. As far as the bid is concerned that we put in, for the number of hours of coverage we got and the audience we got it was probably the lowest price ever paid for an audience of this level on a per-head basis in Australia for many, many years.

So FFA approached us. We put in one bid. We were uniquely positioned to provide the coverage that we did with our integrated television, radio and online service, and it was a tremendous success—the top rating show of the year. SBS was unhappy that we did bid—

Senator DASTYARI: We were disappointed as well.

Mr Scott : and that was well documented, well over a year ago, and I am not sure that anything that has happened in the interim makes that newsworthy or significant now.

Senator DASTYARI: No, well it is different now, though, and this is the issue that we were going to address.

Mr Scott : Yes, Dateline. Let me talk about that. We have a programming strategy that has very successfully attempted to bungle our programs thematically on different nights of the year. We, very successfully, have moved into a news and current affairs suite on Monday night. We have long had a comedy suite of programming on a Wednesday night. We are bringing new Australian drama to air every Thursday night. It is a ratings year this year. And on Tuesday night we are developing a factual slate of programming. What happened previously was that Catalyst and Foreign Correspondent shared the same timeslot—I would hope you would be supportive of our move this year to significantly increase the number of Catalyst programs that we are putting to air—therefore it was no longer appropriate for them to share the timeslot, and, particularly given the interest that children have in science programming, we thought it was not appropriate to put Catalyst on air later in the evening. So the decision was made to run Catalyst earlier and to run Foreign Correspondent later. It has been pointed out to me that that does bring it into the same timeslot as Dateline.

This happens at television from time to time. Of course, the opportunities to catch up on programming have never been greater with iView and the SBS catch-up service. As to the issues you were talking about with my counterpart at SBS, I suppose I would simply say that these things happen from time to time. The ABC was running a news service at seven o'clock for more than 50 years before SBS decided to run its news over the seven o'clock timeslot and actually break its programming—not at seven o'clock, but before and after seven o'clock—to try to hold audiences there.

There have been times when we have been running new Australian programming and SBS has programmed new programs against that. It will happen from time to time. We program separately to the way that they program. We will consider these matters over time. Nothing, fundamentally, about programming schedules is set in stone. We look at what the audience is saying, we look at what the audience is doing. I am sure SBS will do the same.

Senator DASTYARI: I know Senator Canavan has a few questions more specifically on the Foreign Correspondent-Dateline issue. But there is an obligation within the act to take account, obviously, of SBS's existing services. That is a matter of fact.

Mr Scott : There is an opportunity to take into account what has been offered elsewhere in the sector, and SBS is part of that. That is for sure.

Senator DASTYARI: I will be frank. I am less concerned about the specifics of the Asian Cup or a debate about Foreign Correspondent and Dateline than I am about the larger policy question: how do you best create an environment—and I accept, Mr Scott, that you are making the point—where you can have two broadcasters operating in the immediate interests of their own charter—

Mr Scott : You need to compare audiences.

Senator DASTYARI: which, at the same time, can result in a situation which is not necessarily the best outcome for the public good?

Mr Scott : I think that is right, and we saw examples of that. We had established ABC2 as a younger-skewing, general-interest and entertainment channel, and SBS changed their strategy around SBS2 to no longer showing multicultural content and showing English-language, younger-skewing content. At the time, we thought, 'That seems to cut across our well planned strategy around ABC2. They are making independent decisions and so are we.' Whilst structured the way that we are structured and whilst our boards have their responsibilities, we certainly have never, in the history of the two organisations, sat down and programmed side-by-side. That would be hard to do.

Some of this stuff is not ideal; I appreciate that. But we are working very rationally on developing that factual slate on Tuesday night that we think will increase the audiences for that content, just like the news slate and the entertainment slate have increased audiences on a Monday and a Wednesday night. We will review it in practice over time, so will SBS, and whether one of us decides to move the program might be an option that happens from time to time.

Senator DASTYARI: From what I understand, there are informal conversations, but there is not a structured discussion.

Mr Scott : Not at all. They are independent broadcasters and they are independent of each other, in the sense that our engagement with SBS, apart from the joint transmission deal we have done together, is no different to our relationship with any other broadcaster, frankly. And that is the way it is established under the act.

Senator BACK: Section 10(f) within the SBS Act 1991 says it is the duty of the board:

to ensure that the SBS seeks to co-operate closely with the Australian Broadcasting Corporation to maximise the efficiency of the publicly funded sectors of Australian broadcasting …

Does your act have something similar?

Mr Scott : I will need to check that. The main charter obligations and the obligations of the board are found in section 6 and section 8 of the ABC Act and they do not cover that matter.

Senator BACK: And section 26 of your act mentions:

In performing its functions, the Corporation must have regard to the services provided by the Special Broadcasting Service Corporation.

Mr Scott : Yes, we do have regard. It also says in the charter that we take into account what else is being offered in the media sector.

Senator BACK: If I can just come back to the same question: if you have Foreign Correspondent and the SBS program, which have been operating at different times and, you would agree, have a similar audience of people, how are you honouring the commitment to 'have regard to the services offered by SBS' if you then decide to move Foreign Correspondent to the same time slot as Dateline?

Mr Scott : They are different programs. There may be some crossover of audience interest, but the style of reporting on Dateline has been different. These will be matters for interpretation. I suppose the same question applied when SBS ran its news program at the same time as the ABC had run its news program for 50 years. That was a decision they felt they could make, taking into account the ABC. They would say their news service is somewhat different. Foreign Correspondent is a different style of program, but I appreciate that there are similarities to that, and some will come to their view on that.

Foreign Correspondent is a program we have tried to keep on our schedule. We have tried to find the right time slot for it, and the people in ABC Television believe that putting it after strong factual programming—just as we run Q&A after strong news and current affairs programming—is the way of maximising its audience as best we can.

Senator BACK: Have we decided whether the ABC board has a similar obligation or not?

Mr Scott : You have referenced section 26.

Senator BACK: No, I am asking whether the ABC has something similar to section 10(f) of the SBS Act.

Mr Scott : It is not in section 8, which reflects the duties of the ABC board. Section 8 outlines a number of different areas, but there is not a specific reference to SBS in section 8, which outlines the duties of the ABC board.

Senator BACK: From your point of view, as the outgoing head, what possible purpose is there in having these clauses included in your respective acts of parliament if they have no reasonable effect in terms of outcomes for the consuming audience?

Mr Scott : As I have said, we have worked together on transmission, which has generated some savings that we have both been able to allocate back to the funding cut that came through last year. These are different organisations that operate under different charters to different boards and, in practice, the cooperation is challenging at times. There have been circumstances where we have bid for programs and we feel that we have been outbid—or we have withdrawn from the process because SBS has been bidding—and we would have argued that those programs were core to the charter and the track record of the ABC.

I think you raise a broader policy question. It is one I have said some things about in the past and I may say things about in the future. It is a challenging practice with two totally distinct public broadcasters, unless you expect us to sit together and bid side by side and program side by side in order to do that.

Senator BACK: Thanks for raising it, because what it does do is it begs the question, really, from the viewpoint of the consuming public, of why we want the two public broadcasters.

Mr Scott : That is a matter for government.

Senator BACK: I know it is a matter for government and I am reflecting, rather than asking you. It just seems to me that, if the two are in the circumstance that we have discussed here with Senator Dastyari and with me—and earlier, with SBS—I am moving to the stage of being at a loss to understand why we need two public broadcasters.

Mr Scott : I may comment more on this down the track, but SBS was created well before digitisation and digital television, and I have said publicly that to create an entire broadcasting network around that is, in a sense, an analogue solution in a digital world. When Foxtel wants to run new discrete channels, they do not create entire new networks around them. I think there would be ways of thinking about how to distinctively service audiences and meet audience needs, and it is a matter that is worthy of investigation down the track.

Senator McKENZIE: On that matter, two organisations, two different charters—is there a call to revisit those duties under the charter obligations for each organisation? It seems that now, decades on, there is an overlap.

Mr Scott : I think that it is a matter for government to determine whether they want to undertake that kind of work.

Senator McKENZIE: Do you feel that in the 21st century there is an overlap between the charter obligations of the ABC and the charter obligations of the SBS?

Mr Scott : Yes. The core tenets of SBS when it was established were to provide multicultural broadcasting. The SBS of today, which is more general interest broadcasting, means that the distinction between the two broadcasters is not as distinct as it once was. The delivery of multichannelling in various forms also means that the content that appears on SBS—and to a degree on ABC—is not only available in those places the way that it once was. I think these things are always worth reviewing and investigating over time. For example, I think it is true to say on any reckoning: there is far less subtitled content on SBS in prime time than would have been the case 20 or 30 years ago on their main channel. There are differences and there are changes, and it is a matter for government and government policy as to whether these things need to be reviewed over time.

Senator BACK: The distinctions are increasingly blurred.

CHAIR: That is a good time to adjourn for lunch.

Proceedings suspended from 12:57 to 13:59

CHAIR: Being almost two o'clock I will reopen this hearing. Welcome back Mr Scott and Minister. We will now go to Senator Williams.

Senator WILLIAMS: Mr Scott, it is good to see you here. I wish you well in your future and all the best of health to your wife as well, please. The National Livestock Reporting Service run by the MLA employs 28 officers to attend livestock sales, amongst other duties, and report the results to commercial radio stations and also to the ABC for broadcast generally the following morning. I find it very disappointing and I have received a lot of complaints. We used to get up of a morning and, at 20 to seven, we would have the rural report and they would give the market report for the day before. I know that a lot of farmers listened to it, a lot of graziers. Some, unfortunately, do not have internet. I know they are very disappointed. Have you had any feedback on the axing of this service?

Mr Scott : I had some correspondence on it the other day and I am seeking advice. At the moment the stock report is not included in the early rural report, which is—

Senator WILLIAMS: That is on at a quarter past six now.

Mr Scott : Yes, farmers are up early, as you know.

Senator WILLIAMS: I am well aware of that!

Mr Scott : At a broad level, with the program changes we have made this year, we have had very minimal audience response or complaints. The one specific issue, though, that has been raised has been about stock reports. If in fact there are significant movements in stock sales or significant news arises from them, then we cover that in the rural report and we cover it in the Country Hour. But this is an area we are looking at again. I think the feeling is, particularly when the volume of trade is very low in a regional area—is it meaningful detail? I understand that stock agents and others are keen for it to be there, but is it meaningful? Our regional division is getting advice on that and they are looking into that.

Senator WILLIAMS: Please do. Where I live is a big selling centre. For example, they have a Tuesday sale every second week—so they will be selling cattle at nine o'clock next Tuesday and sheep at one o'clock. The next morning we want to hear the reports when we turn the radio on. We get a lot of bad news on the radio, but the stock reports these days are very good news—record prices and so on. Why don't you survey your listeners? On Wednesday mornings on 2NZ, our local radio station, there is Brian Baldwin giving a report. I know a lot of people listen to the sales information and so on. This is their livelihoods, especially in a place like New England that is basically grazing country. Up at Walcha, Glen Innes, Armidale and the high country, there is no wheat growing there, just oats for a winter crop for the sheep. It is not as though it is farming country like Moree and down on the plains. I know people are really missing it. Can you do a survey of your listeners?

Mr Scott : Yes, we will look into it. We have had some correspondence and we have said we will look into it. I think one of the things you are pointing to is whether or not there is a one-size-fits-all approach for the whole country in this regard. That is what I think they were looking at. But where there are sales of scale and significance, we would want to be reporting them. But let me get some advice on that and come back to you on notice.

Senator WILLIAMS: Take the sheep sale next Tuesday back home. We hear about it on Country Hour, but that is 24 hours later. I did speak to Ms Reynolds about this, and she said it is news that is 16 or 18 hours old, but it is the first opportunity graziers have to hear that news, not to mention the other people involved—the butchers and so on who rely on buying the livestock. Have you had any complaints from the MLA on it?

Mr Scott : A member of parliament wrote to me about it last week. That is all I have seen, but I have not checked with Audience and Consumer Affairs. I know that is the one issue we have had audience feedback on out of the changes we made last year. Let me look into it. I will write back to you on it. If you put a question on notice of course we will respond to it.

Senator WILLIAMS: I appreciate that—and please seek feedback from your listeners. I think that would be a very good idea.

Senator McKENZIE: I wanted to thank you, Mr Scott, for all the work you have done for the ABC, and I wish you all the best for the future.

Mr Scott : Thank you.

Senator McKENZIE: I was going to jump in on Senator Williams's line of questioning. I have had constituents write to me about the ABC livestock reports being cut. I know we have often spoken in this committee about local radio and providing information for local communities. The Wagga, Shepparton, Barnawartha, Wangaratta and Corowa saleyards are incredibly important but are no longer reported at 6.55 am on the local broadcasts. Whilst the Country Hour reports are from the official NLRS reporters, those ones I mentioned were from local saleyards. It is the cost of a phone call. The stock agent calls in to the ABC and gives a report. Under the new structure, the producers might appreciate a bit of free local content.

Mr Scott : Fiona Reynolds, who runs our regional division, is looking at this for us. As I said, we were keen to continue reporting when it was news. When you have small volumes, there was a question as to the significance of it, but we want to pay attention to what our—

Senator McKENZIE: It is actually how people run their businesses. I know there might not be many eyes watching.

Mr Scott : No, the people who are involved in making these decisions have been involved in rural reporting for a long period of time, so we will put it to them again and see what they have to say, and we will look at what our audience feedback is. I understand some stock agents have been concerned. The question is whether our audiences have been—

Senator McKENZIE: No, I have had direct feedback from producers.

Mr Scott : Okay.

Senator McKENZIE: Obviously it may not be a huge segment of the audience of your breakfast programs, but that sort of information helps inform how they run their businesses.

Mr Scott : I am happy to look into it again.

Senator McKENZIE: In terms of audience and consumer affairs, on notice, can you provide to this committee any feedback that you have had around the cutting of the livestock reports.

Mr Scott : Sure.

Senator McKENZIE: Thank you. I just want you to walk me through the budget submission and your public commentary around seeking a greater amount of money for rural and regional service provision.

Mr Scott : Well, in my time at the ABC we have never released tri funding submissions.

Senator McKENZIE: I did not ask for that.

Mr Scott : Well, you asked for the detail of it.

Senator McKENZIE: I asked you to talk through your public comments about that.

Mr Scott : What I have said publicly, and what I am happy to say at this point, is that I can understand—and you have been at the forefront of some of this—that there has been significant debate around the level of local broadcasting that is taking place in regional and rural areas. As you would know, Senator, because we have canvassed it a lot in the last 12 months, when the $250 million funding cut came to the ABC, we protected our regional and rural areas. There were some changes within the portfolio, but we created the regional division and we did our very best to protect those parts of the operation. We have put in a submission to Ms Bishop's committee that outlines our commitment to regional and rural areas, and of course we are working on a submission to your committee—the work that you are doing. One thing we would say, though, is that of course we can do more in regional and rural areas if we have the resources to do that.

Senator McKENZIE: Mr Scott, you have been at the forefront of applying new technologies to broadcasting. You have been fabulous at that. Are you saying that, with new technologies and the adoption of technology, we cannot provide locally produced content at the same price? Aren't there efficiencies from the technological development?

Mr Scott : You sound a bit like a commercial television broadcaster, Senator.

Senator McKENZIE: I am just asking the questions.

Mr Scott : I would say it is a combination of both. Of course, I did notice that the Deputy Prime Minister talked about bringing back half-hour television bulletins to all our regional sites. We did a costing of that. It proved to be very significant. I do not think that is seriously in prospect. But can we create more content and distribute it through new technology? Yes, we can. I supposed the proposition I was putting to the government—I would be very interested to see how the government considers this—is: what public policy levers do the government have if in fact they are concerned at the dramatic cut of journalists and local content that is taking place because of what is happening in regional newspapers, regional radio and regional television? One thing the government can do is adequately fund the ABC for an increased investment in reporters on the ground, and then, of course, we would use the new technology to effectively be able to distribute that via broadband. So our proposition is for more than 100 additional staff in regional and rural areas.

Senator McKENZIE: How much will that cost?

Mr Scott : It would cost around $25 million to $30 million a year.

Senator McKENZIE: So they are not being paid Tony Jones wages.

Mr Scott : More local content that we can distribute online and more local content on radio. One of the things we have said in our submission is that we would make that raw feed available to all other media outlets if they wish to utilise it, so we could support other media outlets as well. So I would have thought that if you are really interested in local voices, local communities and local news then you would support a proposition for the ABC to be able to put more people on the ground to provide local broadcasting and local content, because that is the one sure lever—the one sure bet—that the government has to make a change in this environment.

Senator McKENZIE: Thank you for outlining that, Mr Scott.

Mr Scott : A pleasure.

Senator McKENZIE: I did not know the details.

Mr Scott : Yes.

Senator McKENZIE: Did you say $25 million?

Mr Scott : Yes, it is $25 million and it is up to $30 million in one year, but some of that is the setting up of the capacity.

Senator McKENZIE: Predominantly on people?

Mr Scott : On staff, yes.

Senator McKENZIE: We have canvassed this many times. When I asked the Parliamentary Library to split out from the local the radio budget the amount that the ABC spends on the provision of local radio to rural and regional communities, there was nothing in annual budgets, the PBS, Senate estimates or any other public document available that would actually give anybody in the community an understanding of how the public broadcaster prioritises rural and regional local radio. The only thing they could come up with, Mr Scott, was QON-44 of Senator McKenzie's back in February last year. You were able to, in answer to one of my questions on notice, come up with a grand total of the budget for ABC local radio. That was $24.644 million. That as a percentage of your entire budget really—

Mr Scott : It is not—

Senator McKENZIE: Well, this is your answer.

Mr Scott : But it was in answer to a specific question. I have been informed that this afternoon the ABC's submission to the House of Representatives standing committee looking into the importance of public and commercial broadcasting to rural and regional Australia carries a more detailed breakdown than that, and if you have been searching for the information you will be glad to see it.

Senator McKENZIE: Hopefully the library is onto it.

Mr Scott : The answer to that question on notice is absolutely correct. We have a regional division and that regional division has a budget of slightly in excess of $50 million. That is just people who are operating and working in the region. In addition to that of course, we spend $150 million transmitting our content on radio and television to regional areas and about a third of our total audience lies in regional areas taking advantage of national content that we produce. So as this report shows we spend about a third of our budget servicing people in regional and rural areas.

Senator McKENZIE: I asked a question about ABC local radio, and you and I have argued a lot when you claim the budget cuts are a result of your decisions as managing director and the board's decision on how to prioritise public money. My argument would be and will continue to be, as long as I am in this place, that as a recipient of public funds the ABC's role is to address shortfalls in markets. Where there are broadcasting gaps is where a public broadcaster should be, rather than, Mr Scott—

Mr Scott : But that is not a correct reading of the act.

Senator McKENZIE: again and again going up against the commercial breakfast shows. I would like to know how much your ABC 24 breakfast show is actually costed at, because that comes at a cost of the provision of services to rural and regional Australians.

Mr Scott : No.

Senator McKENZIE: Over a long period of time there has been a retraction.

Mr Scott : Firstly, on the retraction—

Senator McKENZIE: I want to know why you do not prioritise. Instead of coming to government asking for additional funds, why not prioritise what you are already given?

Senator Dastyari interjecting—

Senator McKENZIE: I look forward to your submission to my inquiry!

Mr Scott : We fulfil the requirement of the ABC Act. We take into account what the commercial operators deliver and there have been areas where we have walked away from what we have offered and we can point to those. But ABC News 24 is viewed by in excess of four million Australians per week, and nowhere in the ABC Act does it say that the ABC is to only offer services where commercial broadcasters do not offer services. In no way are we narrowly defined as a market failure broadcaster; although, we do operate in areas of market failure. I think the question would be: in what areas would you propose we cut ABC News breakfast and the top-rating talk radio programs in Perth, Brisbane and South Australia on local radio? I would say to you that hundreds of thousands of people enjoy and experience those programs every day. And if in fact that is your view, if you are saying cut ABC local radio in the capital cities and cut News 24, that may be your view, but that is not the view of the ABC board operating within the ABC Act.

Senator McKENZIE: Mr Scott, I am not suggesting you cut.

Mr Scott : So how are you proposing to—

Senator McKENZIE: At the moment, you are spending over $1 million on leases to foreign properties per annum. I am not saying cut—

Mr Scott : But 'international' is in our charter.

Senator McKENZIE: I am saying redistribute so that you more accurately reflect—

Mr Scott : Sorry, but what does 'redistribute' mean?

Senator McKENZIE: the needs and interests of all of Australia—

Mr Scott : With respect, 'redistribution'—

Senator McKENZIE: But when we go to ratings—

Mr Scott : Can I address the redistribution question, Senator?

Senator McKENZIE: Yes.

Mr Scott : Surely 'redistribution' means—unless there is a magic pudding that you are talking about—reducing and cutting in some areas so you can increase in others. Are you suggesting that redistribution does not include cutting some areas?

Senator McKENZIE: I would assume that ABC 24 and other areas of the business could actually still operate but maybe not with the level of celebrity that they currently operate on. But—

Mr Scott : So you would cut—

Senator McKENZIE: Excuse me! I am saying that they could operate at a lower proportion of the ABC's total budget in order to appropriately fund the provision of rural and regional services and local radio.

Mr Scott : I would say that ABC News 24 is extraordinarily productive and efficient given the volume of hours and hours of content that is produced from the budget that it operates; that ABC News Breakfast runs on the smell of an oil rag compared to the breakfast programs that are offered on the commercial networks and still finds a very significant audience; and that we do look to be as efficient and effective as we can be. In fact, we are meeting all the funding targets that were set for us under the department's efficiency review.

So I do not think we should be simplistic about this, Senator. If in fact we are looking to put more than 100 additional staff out into regional and rural areas, it is not easy to identify and find the money that would fund that. But, if it is important to the government and if it is important to you, Senator, and you are concerned at what commercial broadcasters—

Senator McKENZIE: I do not sit on the ERC, Mr Scott.

Mr Scott : If you did, Senator, I would hope that you would be speaking in strong and robust support for this submission. Fundamentally, the government can do nothing about the axing of journalists in regional newspapers, and the public policy levers around commercial radio and television in the bush are limited. The one thing the government can do—the one lever you do have—is to adequately fund the ABC to enhance services in regional areas, if that is a priority for the government.

Senator McKENZIE: I have some other questions on that exact topic that we will go to later. But you just mentioned ratings, and I wanted to ask how important ratings are to your identity and the success of the ABC.

Mr Scott : I think ratings matter but they are not the only things that matter.

Senator McKENZIE: They seem to be the only justification given—

Mr Scott : Not at all, Senator. We do a range of programing on the ABC that is very important to us that will never win the ratings. Radio National will never win the ratings, nor will Classic FM, not will running arts documentaries in primetime or religious documentaries in primetime. Ratings matter but that they are not the only things that matter. We take into account what commercial networks do. But, if you look in the ABC Act, it talks about the ABC doing programing of wider appeal and specialist interest. So, if we are looking to do a popular drama or a comedy, of course we are looking to get the biggest audience that we can for that. But there is a range of programing that we happily put to air under our charter that has nothing to do with ratings success.

Senator McKENZIE: But in terms of where the proportion of the spend goes, isn't it true to say that the ABC chooses to invest in products that rate highly?

Mr Scott : No. The most expensive national network that we run—much more expensive than any of the others—is Radio National. Radio National does not and will not win the ratings. We did a production with Opera Australia where we ran opera on ABC television for four nights in a row—a new Australian opera format; a very expensive production—and we knew that that would never win the ratings. I can give you countless examples of where we spend on programing that will never win the ratings. They are a priority for us.

Senator McKENZIE: As a proportion of the spend, that is not actually—

Mr Scott : I am happy to provide you with lots of details.

Senator McKENZIE: That is fine; you can spin it that.

Mr Scott : I am not spinning it.

Senator McKENZIE: How is it determined that both Horsham and Mildura would benefit from increased local content during peak listening times? How was that actually determined? Was that using ratings?

Mr Scott : These are on the changes that were brought about this year. We felt that they had a disproportionately lower level of local radio content emerging from those stations than elsewhere in the country, so we looked to bring them up somewhat.

Senator BACK: Mr Scott, you may recall my writing to you on 19 November—

Mr Scott : Yes.

Senator BACK: in which I complained to you about the bias of an ABC 7.30 program in relation to the Economics Committee hearing in Sydney the day before. You very kindly wrote back to me on 20 November to say that you had referred the matter. We met on 30 November at the delayed Senate estimates inquiry. I have not yet heard back from you, and I am just wondering if—

Mr Scott : Senator, I have advice that we responded to you on 11 December. So I will look to get a copy of that to you.

Senator BACK: Yes, that would be appreciated, thank you. If I have missed it—

Mr Scott : That is my advice, but I will follow that up.

Senator BACK: Thank you very much.

Senator DASTYARI: I am very conscious of time and of the fact that we already running well behind. There are some matters that I want to go over that I suspect Senator Ludlam may want to jump in on, so I am very happy for Senator Ludlam to jump in at certain points if he wants to. Mr Scott, there is a lot here that I perhaps will not have the opportunity to get to; we may as well not pussyfoot around the issue. Let's get straight to it: New Matilda has recently published a series of articles about the ABC's coverage of the NBN.

Mr Scott : Yes.

Senator DASTYARI: You are obviously well aware of this.

Mr Scott : I am.

Senator DASTYARI: I note that there was a series of questions from Senator McKenzie there. I think it is fair to summarise that your general answers seemed to be, 'we are acting in accordance with our charter and our act, and if people want to change the charter and act to put the focus on regional areas, that is a matter for the parliament'. I also want to note that Senator McKenzie is doing an inquiry, which sounds quite interesting, to see whether or not the act should change. That is a separate matter. But the idea of independence is at the heart of the charter and the act. Is that correct?

Mr Scott : Absolutely.

Senator DASTYARI: Perhaps rather than me throwing you a series of questions, why don't we just get to it?

Mr Scott : Sure. Do you want me to speak to the matter?

Senator DASTYARI: Yes, why don't you speak to the matter.

Mr Scott : I am aware of the coverage this has been given in New Matilda, but I do want to speak to the committee on it, so I am grateful for the question.

I want to make it very clear that at no time has the ABC sought to shape editorial decisions or coverage in any attempt to gain favour with politicians or political parties, and nor did it seek to gag Mr Ross. What we wanted to do was ensure that Mr Ross acted in compliance with the editorial policies as existed at the ABC. That is our responsibility as editorial managers; that is the requirement under the ABC Act. Now, I mean no ill will to Mr Ross and I do not want to be critical of him. He worked at the ABC for a considerable period of time. But there was a disagreement on the role that he wanted to play and the role that editorial management felt that he wanted to play, and a number of really quite unusual things happened. For example, Mr Ross published an 11,000 word treatise on the NBN—highly supportive of the Labor plan on NBN, highly critical of the coalition plan on NBN. But he published that piece without any upward referral to editorial management; as I understand it, without any editorial managers reading that or going through that with him. That is highly unusual. I cannot recall any time in 20-plus years of journalism experience where that would have happened. NBN, as we know, is a controversial matter of debate, and there will be a range of divergent views on the policy approaches developed by different parties. What we felt there was a responsibility to do was for a plurality of viewpoints and perspectives to be aired in the coverage. And yes, there were conversations with Mr Ross to that effect.

I am not going to get into the detail about the state of mind of someone furtively taping a conversation with a manager, nor am I going to get into New Matilda's legal responsibilities of publishing illegally that tape. But let me say that the manager involved, Mr Belsham, is a very, very experienced and credible and respected manager at the ABC—a very independent-minded gentleman. For a long time he ran Four Corners, and I believe that he acts with the utmost integrity. So the suggestion that a reporter was not just given free rein to do whatever they liked, but instead had to operate under editorial management and leadership to ensure that we complied with our editorial policies—I do not think that is unusual. And I think some of the depictions of it that I have read I think are unfair and inappropriate.

Senator DASTYARI: But, Mr Scott, the recordings themselves—and, again, New Matilda are big enough and bad enough and they can defend themselves; that is really a matter for them, and issues to do with Mr Ross are matters between him and the internals of the ABC. The allegation, which is a fairly serious one, is that the coverage of the NBN was skewed with a view towards political considerations. That is the allegation.

Mr Scott : There are a number of contentious areas. I can think of three in my time: Middle East coverage, one we have discussed here at length; climate change coverage—we have discussed that here as well; and also NBN coverage. We have a responsibility to cover that range of issues well, and what Mr Belsham was seeking to do, seeking to encourage Nick Ross to do, was to ensure that the full perspectives and the full range of perspectives were covered. You are right: if in fact we simply ran a one-sided coverage of this, then of course there would be issues that we would face. But that is not because of political pressure. There was no political pressure around this.

Senator DASTYARI: Then you are disputing this quote? This is the alleged conversation between Mr Ross and Mr Belsham in which—

Mr Scott : This is from the illegal transcript?

Senator DASTYARI: Sure, but you run a media company—

Mr Scott : I am just making sure I knew what you were quoting from. That is fine.

Senator DASTYARI: If we want to start going through every time Four Corners or whistleblowers—your entire Four Corners program is built, a lot of the time, on documents that have been obtained by questionable means.

Mr Scott : I was just checking what you were reading there.

CHAIR: Senator Dastyari, it is quite appropriate for Mr Scott to make sure that he understands what document you are quoting from. There is nothing inappropriate with that.

Senator DASTYARI: I perhaps misunderstood that Mr Scott was trying to taint what it was. How it was obtained does not change the veracity, whether or not it was true.

Mr Scott : Sure. What is the quote?

Senator DASTYARI: The quote is that, if Mr Ross's article is published:

… the Turnbull camp … are going to come down on me like a tonne of bricks.

Is that correct?

Mr Scott : That it would attract criticism from the Turnbull camp, or whatever you want to say—we do coverage all the time that attracts criticism; that is not the salient point. The salient point is: is our coverage fair and accurate and balanced and does it take into account the full range of principal relevant viewpoints around an issue? What Mr Belsham was seeking to do was to ensure that Mr Ross complied with the editorial policies which are about canvassing the range of viewpoints and perspectives. Mr Ross himself had a view, but it was not the responsibility of Mr Ross to simply tell his view; it was to report the range of views, and that is what Mr Belsham was encouraging him to do.

Senator DASTYARI: What you are saying is that you are comfortable with Mr Belsham telling Mr Ross that he cannot publish an article because 'the Turnbull camp will come down on us like a tonne of bricks'.

Mr Scott : No, because I have read it and I have read it in the full context, and others have read it too, and I must say it strikes me he was encouraging Nick Ross to be balanced and broad in his coverage, and Nick, I think, with the best will in the world and using his expertise, had come to a closed view on the matter.

Senator DASTYARI: Who is the term 'Turnbull camp'?

Mr Scott : I am not aware of it.

Senator DASTYARI: You have not heard that term used before?

Mr Scott : All I will say is this—

Senator DASTYARI: I think Senator Fifield ended up in that camp. He did not start there.

Mr Scott : The only thing I would say is: I do not want shock senators, but from time to time I do receive complaints about our coverage of contentious matters!

CHAIR: I do not think that is enough to shock us here on this side of the table.

Senator Fifield: From all sides of politics, you mean?

Mr Scott : From all sides of politics.

Senator Fifield: You could knock me over with a feather!

Senator DASTYARI: I think you are trying to dismiss what is a fairly serious allegation that has been made by one of your journalists.

Mr Scott : No, but I am trying to put it in some context. I must say, as I think the Prime Minister said the other day—his criticism of ABC's coverage—

Senator DASTYARI: We will get to that.

Mr Scott : His criticisms of ABC coverage were certainly well documented. I do not think there was anyone associated with the ABC that he did not have a bit of a shot at as far as NBN coverage—just like our Middle East coverage is criticised from time to time and our climate coverage is criticised from time to time.

Let me tell you how we deal with those tests, Senator. We deal with those tests by politely listening but ensuring that our content complies with the editorial policies. Does our content comply with the editorial policies, which go to a sense of a range of viewpoints and plurality, allowing our audience to make up their own mind. That is the safest way of dealing with political pressure—you are not dealing with political pressure; you are saying, 'Here are the policies, here are the guidelines, this is what we have to adhere to.' That was the issue in this case.

Senator DASTYARI: I think you are equating this with something that is wrong to equate it with. There has been criticism in this place from other senators of something like climate change coverage. Last estimates we had Senator Abetz—who, unfortunately, is not with us this week—who would no doubt be going on about your Middle East coverage, and has consistently. In those circumstances the debate has been an external assessment about whether what you have produced has been objective or not objective, and you have processes in place. The difference here is that you have a journalist within your own team working for the ABC making a fairly serious allegation that they were pressured or told or leaned on in the production of a story—that is the difference here. I do not care if it is about the NBN, climate change or Israel and Palestine; the issue here is whether your internal protocols were appropriate in that. That is the difference I am seeing here.

Mr Scott : With respect, Senator, I do not see a difference. Fundamentally, in contentious areas—or in all areas where our journalists exercise their editorial judgement—they have editorial managers who have responsibility to ensure that we are in compliance with our editorial standards and guidelines. It might well be—and, Senator, believe me, in my long experience, there are times when journalists are unhappy. They want a story to run a certain way and editors disagree with that. They have a certain judgement and editors come to another point of view. What Mr Belsham was doing was saying that he disagreed with the approach Mr Ross was taking, that he did not think it complied with our editorial guidelines and standards, and that there was a range of perspectives that needed to be brought to bear with the coverage. He was insisting that Mr Ross do that, and that Mr Ross, in a heartfelt way, had his own judgement on the rights and wrongs of this issue—which was fine and was pretty evident by his 11,000 piece piece—but that was not the role that he was employed to do. He is not an opinion commentator on this, Senator—

Senator DASTYARI: It was not an opinion piece. We can go to the details of the piece. I am trying to keep it above that and talk about the broader editorial issues.

Mr Scott : I appreciate that, but his role was to report and curate the range of views and the debate around this matter, and that is what he was being urged to do.

Senator DASTYARI: Since this has come out—and I might be behind in this—have you conducted an internal review or are you conducting an internal review?

Mr Scott : No. We were well aware of this matter. We have looked at the transcripts and news is across it, Mr Ross has left the organisation, we are confident around our editorial policies and we are confident in our editorial management, and I do not accept the sinister overtones that some have placed on that.

Senator DASTYARI: Is your answer no, you have not conducted an inquiry and do not intend to?

Mr Scott : Not since this transcript landed—we have read the transcript.

Senator DASTYARI: Who is 'we'?

Mr Scott : I have read it, I know other senior executives have read it and I know senior management in news have read it. Mr Belsham, who was not aware that his conversation had been taped when he was trying to counsel a staff member to perform to the standards that we have set, has read it as well, clearly.

Senator DASTYARI: Sorry?

Mr Scott : He has read the transcript as well, but he was not aware that it was there.

Senator DASTYARI: What was the test? If you are telling me that the test is whether or not Mr Belsham is comfortable with what he said—

Mr Scott : No. The director of news has read it, I have read it and others have read it.

Senator DASTYARI: How would an inquiry happen? How does this happen when you have these kinds of circumstances within an inquiry?

Mr Scott : We have not had an inquiry, Senator.

Senator DASTYARI: But I am asking why you have not had an inquiry.

Mr Scott : Because I am comfortable in Mr Belsham's judgement. I understood, and I had been briefed previously, about the debate around the coverage. I also knew of the decision, which was part of a broader ABC-wide decision, to end that website—we cut about 100 websites and that was one. I was aware that Mr Ross had left the organisation. I think our feeling is that there was a disagreement around this, Mr Ross has now left and I am not sure that there is a whole lot more investigate quite frankly.

Senator DASTYARI: Where I would disagree with you is: firstly, public broadcaster with public funding, and, secondly, when you have the seriousness of the allegations that have been made within the organisation. I accept that you cover news. News is contentious. People externally will be happy or unhappy with coverage and the use of the word, especially when it comes to passions on different issues that result in very different views, and that is what makes what you do so exciting, fantastic and brilliant, and also, at times, controversial. I accept that and that is why you have never had me come here and complain about coverage per se. The difference is that here you have a journalist—and yes, you are right, the recordings may or may not have been legal and they may or may not have been legally obtained but I think that is a secondary point. I think the ABC has run so many programs and shows based on whistleblower information—

Mr Scott : And I am not making a thing of that.

Senator DASTYARI: And, frankly, whether you agree with him or not, or you think he is right or wrong, clearly Mr Ross comes at this himself with the perspective of being a whistleblower. People can have different views on whistleblowers. Not all whistleblowers are correct—I accept that—but I tend to—

Mr Scott : I am not making any comment on Mr Ross personally.

Senator DASTYARI: If there is then one of your own journalists who comes to the conclusion or feels very strongly the need and who then releases tapes—which ends up resulting in senators and public confidence being questioned—I do not think it is an unreasonable request to say then isn't the best way of handling this to have an independent process? In the same way as when there were controversies regarding a matter like—I am going to pronounce his name wrong—the Q&A kind of scenario where the ABC turn around and say that they are a public broadcaster and, to misquote Caesar's wife, that they have to be 'purer than pure' and that public perception is so important, the best way of handling this is to place it in an independent process to give everybody confidence. I do not understand why that would be a bad thing to do.

Mr Scott : Let me just clarify one thing I said earlier, because I am constrained: there has been no subsequent review that has been commissioned since the release of the tape, but there had been internal processes underway prior to that, that I am not in a position to speak to. I think the trustees of the ABC's independence and editorial standards are matters for the ABC Board and, finally on this matter, the ABC Board will come to a judgement on it.

Senator DASTYARI: You said two separate things there Mr Scott, I just want to check with you. It sounds like what you are saying—and there may be a reason why you are being careful about what you are saying here—

Mr Scott : Yes.

Senator DASTYARI: I was not aware of this issue with Mr Ross until the New Matilda articles. You seem to be saying that you were aware of this well before then.

Mr Scott : Yes.

Senator DASTYARI: You are saying that you had conducted an internal process—

Mr Scott : No, I am not going to talk about the internal processes and I have my reasons for not detailing that. What I am saying to you is that on the subsequent publication of the New Matilda material, and everybody reading that transcript and some of the commentary that has emerged—particularly from New Matilda—since then, has the ABC set up a new inquiry into that matter? No, we have not. I read that transcript, I know Mr Belsham, I am confident that our standards are high, I am confident that he was seeking to encourage a staff member to fulfil the requirements of the editorial policies and I back Mr Belsham's judgement on it. Others will come to their own view on it and if the ABC Board wishes to pursue the matter with me then they will do that at an appropriate time.

Senator DASTYARI: I know Senator Ludlam wants to jump in and say a few things about this matter. There are quite a few specifics that we can go into—I am trying to keep it as a broader debate about independence—about who was who at the ABC at the time, about who your head of corporate affairs was and all those kinds of matters, we can get to that. But the broader point is, it seems, Mr Scott, you are saying that you are confident because of information that you have that the public does not have—

Mr Scott : No—

Senator DASTYARI: You are saying based on the fact that you have seen a full transcript, based on the fact that you know Mr Belsham, you know the work of Mr Belsham. I do not know Mr Belsham. He may have been outstanding—

Mr Scott : But I am exercising my editorial judgement about Mr Belsham, having worked with him now for the best part of 10 years. I know people read the New Matilda transcript and all that, but in 2013 Media Watch did a segment on Nick Ross and Media Watch said that the difference between advocacy and analysis—that is what he wrote about—is that Ross is an advocate, and it shows. So it is not a surprise to me when this is released that there is a debate over the role that Nick Ross wanted to play, the role that we wanted him to play, the role that we felt he had to play working as a journalist at the public broadcaster. It is a very different role to working as a technology blogger for a website. It is a different role.

Senator DASTYARI: Mr Scott, you have accepted that there has been public commentary about this.

Mr Scott : In some quarters. It is hardly been a dominant story.

Senator DASTYARI: Sure, but there has been. Will you accept that this relates to a former employee—

Mr Scott : Yes.

Senator DASTYARI: and that there is a former employee who has made what I would call fairly serious allegations regarding independence of the ABC when it comes to this particular matter?

Mr Scott : Yes.

Senator DASTYARI: I say 'fairly serious' because it goes to the heart of what the ABC is about, and that is independence. Mr Scott, you are saying that any decision about whether or not there would be an independent process to verify what has or has not happened can come about in two ways. One is that it can be initiated by you through you asking for some kind of internal review or process, which I assume you have as part of your HR systems. Is that correct?

Mr Scott : Yes, we have those processes.

Senator DASTYARI: And the other is it coming from the board above, which is what has happened—

Mr Scott : As they see fit, yes.

Senator DASTYARI: in the more kind of high-profile Zaky Mallah kind of situation.

Mr Scott : It does not all have to be high profile, but the board can get reviews on matters if they like, and they do from time to time.

Senator DASTYARI: And here is the bit I am not quite sure about, which seems kind of unclear. That internal HR review process—you say, 'I am not going to talk about it.'

Mr Scott : Correct.

Senator DASTYARI: That makes me wonder: does that mean there is or is not a process? Have you or have you not—

Mr Scott : There have been some processes underway internally. They are now complete. And I am advised that I am not in a position to speak about those matters.

Senator DASTYARI: On the basis of what?

Mr Scott : Legal advice.

Senator DASTYARI: But this is Senate estimates: none of this will be pending anything—

Mr Scott : There are laws that apply on complaints and review processes internally, and I am not going to speak on them further.

Senator DASTYARI: I am not quite sure what the basis for immunity is here. What is the public interest immunity test?

Mr Scott : I will have to take that on notice. I am telling you what I have been legally advised to tell you, and there is nothing more I can say on that matter.

Senator DASTYARI: I just want to put where we are right now—

Mr Scott : There are provisions that safeguard people who make complaints, and I respect those provisions.

Senator DASTYARI: But this is Senate estimates. You cannot come and say 'public interest immunity' and not say what the public interest immunity is and say, 'We'll just get back to you on what the immunity is.'

CHAIR: Senator Dastyari, Mr Scott is within his rights to take that on notice and consult further before he comes back with the answer to your question.

Senator DASTYARI: But he is not in a position to claim public interest immunity without stating the reason for the public interest immunity.

CHAIR: But that is what I am saying. He is absolutely entitled to take that on notice and come back with an answer.

Senator DASTYARI: What is it that he is taking on notice?

Mr Scott : I am taking on notice the advice I have and the detail I can provide you with.

Senator DASTYARI: They are two different things, because you cannot take on notice what is public interest immunity—is that correct, Chair?

CHAIR: I understand Mr Scott is saying he is taking a question on notice to actually consult on why it is that he is making a claim of public interest immunity, and he will come back and advise.

Senator DASTYARI: No, that cannot be what Mr Scott is saying. Mr Scott can take on notice the questions: was there an internal investigation; was there an internal review; what was the outcome of that internal investigation; and what was the outcome of the internal review? And I will put a few more on. When did it begin? When did it end?

Senator Fifield: And, if there is a claim of public interest immunity, that will be made at a subsequent time with the reason, if there is.

Senator DASTYARI: Yes.

CHAIR: Just to confirm, Mr Scott, you are taking the question on notice so you can further consider any issues of public interest immunity before you come back with a response to the question?

Mr Scott : That is correct.

Senator DASTYARI: But you are not claiming public interest immunity?

Mr Scott : No, I am going to take the question on notice.

Senator DASTYARI: That is the difference. I have a bit more on this.

CHAIR: No, I will come back to you, Senator Dastyari, thank you.

Senator LUDLAM: Senator Back wanted a very quick intervention.

CHAIR: Senator Back. Yes, if you have a very quick question.

Senator BACK: With regard to your suggestion of the letter from 11 December, my staff have checked and we cannot find anything in the correspondence scans, the mail log or the email inbox. I would be appreciative—

Mr Scott : If only Australia Post were still to come, we could have put it to them. We will get it to you.

Senator BACK: Would you do that?

Mr Scott : Yes, indeed.

Senator BACK: Thank you very much.

CHAIR: Senator Ludlam on this issue, and I will come back to you for more questions later.

Senator LUDLAM: That is great. I appreciate that. I think it makes sense to dwell here while we are here. Thank you for your answers thus far, Mr Scott. I am interested to know why you would refer to the initial 21 February article 'The vast differences between the NBN and the Coalition's alternative', the 11,000-word article—I have a copy of it here—that I guess might have started this particular ball rolling, as a treatise. Why would you not just refer to it as an article?

Mr Scott : There are two elements of it that I think are noteworthy, frankly. In my experience at the ABC, I can never recall when we have ever published anything at 11,000 words, at a factor of many times longer than anything else we have ever published. It is unprecedented in its scale.

Senator LUDLAM: Okay, so it was long.

Mr Scott : Very, very long. In my newspaper publishing experience, I think 5,000 or 8,000 words was the longest we ever published in print. So it is a very long piece. The second thing is that, given the nature of the piece, the fact that it was not upwardly referred and that it was not discussed with any of his line managers—as I understand and as I was told, they did not even know it was coming—again is most unusual and not in keeping with the usual processes that would have been in place around this. Mr Ross—despite his experience and his heartfelt views and the genuineness of his analysis—works in an editorial process, and the editorial process does have in it issues of upward referral and editorial line management. That is why I referred to it in that way.

Senator LUDLAM: You also referred to Mr Ross's article—I think twice thus as far—as heartfelt, as though it is a rather emotional piece of reporting. There are hundreds of references in here and it is actually a remarkably well-referenced and quite factual—indeed forensic—document which others in the tech press, and certainly I as a participant in the public debate, found immensely valuable, and it keeps getting referred to as though it is some sort of vanity posting.

Mr Scott : I think it is fair to say—and I think he has made no secret of it—that Mr Ross did not always have a happy time at the ABC. I could take a view here that was critical of the way he approached some of these things. Those two matters that I just raised with you, particularly having posted it without the upward referral, are quite a serious matter editorially. But I do not want to have a go at Mr Ross on all of that, and I am saying that I believe he was genuine and serious minded in his approach. The challenge we had was: did his approach lead us to coverage that was compliant with our editorial policies? It is not simply a case of 'on the one hand or on the other hand', and it is not simply a case of false balance. It is around the principal, relevant viewpoints and the range of perspectives around this contentious matter. Whilst there are some who are very supportive of that piece, there are others who are critical of it—

Senator LUDLAM: Such as the opposition communications spokesman.

Mr Scott : Yes, but others as well. As Media Watch found—and that was Media Watch's perspective—he was an advocate. That is not the role that our journalists are meant to play.

Senator LUDLAM: You have spoken a couple of times about editorial balance. In my reading of the transcript—again, I want to acknowledge that New Matilda and, I think, Crikey are among the only two outlets that have picked this up—Mr Belsham is not, on balance, critiquing Mr Ross. He is saying: 'You need to provide us with some insurance. You need to go out and write a hit piece on Stephen Conroy and the Labor Party NBN model.' That is what I find most dissonant. I am not referring to the vastly different article of February. We are referring to the second article on whether Australia's copper network is fit for purpose. In the transcript that dates back to May 2013, you can see Mr Ross is being schooled by Mr Belsham in an article that will not be published until after the election, after it ceases to be of any value to people who are trying to make judgement calls about the relative merits of one policy or another. Mr Ross is not being told that the article is out of balance. Mr Belsham actually says he likes the latest piece and would like to publish it. Then he advises Mr Ross to go out and write a hit piece on the alternative. That is remarkable.

Mr Scott : I have heard a lot of colourful language in newsrooms. That is not particularly colourful. I think he is saying that there was clearly, if you had been following it, significant debate around the policies brought forward by both sides. There were issues like the growing debate between the relative costs of the different programs, the delay of the NBN, technical issues around nbn co's delivery speed to homes, the return of public investment, the economic modelling and the absence of an economic benefits strategy around the NBN. These are all very relevant issues. I do not think it was inappropriate for Mr Belsham to encourage Mr Ross to go and interrogate those matters. It goes to completeness of the coverage.

Senator LUDLAM: Mr Ross had written some quite critical stuff in the past about the Labor NBN model. But I do find it extraordinary that he is being schooled about a piece that his editor says he quite likes. Mr Belsham says:

We’ve got to give you some kind of insurance policy …

He says that, otherwise:

… the Turnbull camp and my superiors are going to come down on me like a tonne of bricks …

What the hell has that got to do with editorial balance?

Mr Scott : I think it is to do with the completeness of the coverage. Mr Belsham thought there were some merits in that piece. But what are the other angles? What are the other perspectives that we need to bring to bear to provide completeness of coverage? I think—

Senator LUDLAM: Insurance implies a political calculation.

Senator DASTYARI: That is not what he said.

Senator LUDLAM: Insurance implies—

CHAIR: Senator Dastyari, Senator Ludlum has the call.

Mr Scott : As I read that piece, I understood exactly what Mr Belsham was saying.

Senator LUDLAM: I think we all understand what he was saying.

Mr Scott : I think he was saying that the coverage was not complete or comprehensive. But I am not sure that Mr Ross shared that view. Mr Ross thought he had written what needed to be written on the matter. As an editor, I can tell you that we send journalists out to find new and different angles on stories to make sure we tell the full and complete story. Therefore, I do not find it that surprising, and I certainly do not find it sinister. It goes back to the issue that was raised about whether there was political pressure. There was political criticism. I get political criticism all the time around coverage. It does not equate to pressure. It does not equate to pressure on journalists—

Senator LUDLAM: He said:

… the Turnbull camp and my superiors are going to come down on me like a tonne of bricks …

CHAIR: Senator Ludlam, let Mr Scott finish his answer.

Mr Scott : The defence that comes to bear comes with us delivering on our editorial policies and delivers on the charter.

Senator LUDLAM: I put to you that you have not delivered on your editorial policies in this instance. Has Mr Turnbull, while either in opposition or in government, approached you directly about the ABC's—

Mr Scott : I am not sure about 'directly', but he certainly did mention it from time to time. If you really want me to document the number of times that politicians have mentioned or complained to me about coverage, it would be a long list of names—

Senator LUDLAM: My name would be on that list.

Mr Scott : Senator Back is always very cordial. However, not everyone is as cordial as the good senator!

Senator LUDLAM: My name would be on that list as well, Mr Scott. I am aware of that.

Mr Scott : Of course, and so can I say that—

Senator LUDLAM: I am trying to keep it to the subject

Mr Scott : It is just par for the course.

Senator LUDLAM: No, this is something a little different. Unlike the usual par for the course, we have some insight in this case about some of the conversations that occur internally to try to take the political heat off the ABC. And that is rare.

Mr Scott : The political heat comes off the ABC, and the defence that I can run here is that we are delivering within our editorial policies. If we are delivering the principal relevant perspectives and if we are delivering complete coverage then that is the defence. If, in fact, we cannot demonstrate that then there will be consequences, no matter who is in power and no matter what the committees are. The defence is that we meet the editorial requirements, and that is what we are looking to do.

Senator LUDLAM: Now I think we are getting close. In your view, why was that second piece, 'NBN alternative: Is Australia's copper network fit for purpose?' withheld? Mr Ross is of the view, on the basis of the evidence that he spent a fair bit of time going over, that it is not. He goes through material that came to one of the Senate standing committees. It was a fair bit of research. Why was that piece held up from publication—

Mr Scott : I would have to check. I do not have advice on that.

Senator LUDLAM: That is what this whole question hinges on. It is that piece that was ready to run in May—

Mr Scott : I can take that on notice. I am sorry, I do not have the detail on that chronology.

Senator LUDLAM: You are aware of the article that I am referring to?

Mr Scott : Yes, I have seen that article.

Senator LUDLAM: It is the one that is referred to in the tape recording—not the first one that caused Media Watch and The Australian and the News Corp press to go on one of their character assassination ventures. It is the one that is being schooled on in this recorded conversation in May. That piece was held up for six months; it was not published until about a fortnight after the election.

Mr Scott : I will come back to you on that, Senator.

Senator LUDLAM: I would appreciate that.

Senator MADIGAN: Mr Scott, does the ABC have a policy, or a general editorial directive, on how it reports on renewable energy matters?

Mr Scott : Not a specific policy on that matter, but we have editorial policies that apply to how we cover any and all editorial matters. I am happy to provide you with a copy of those editorial policies, and they are posted online.

Senator MADIGAN: I would appreciate that. In 2011 the ABC's 7.30 Report aired a Quill Award-winning investigation by Cheryl Hall into the problems being reported at the Waubra Wind Farm in Victoria. A constituent of mine telephoned Cheryl Hall to thank her for her quality reporting. She said, 'I'm glad someone thinks so. I've just received a directive that we are not to present renewables in a bad light.' I ask you again: does the ABC have a general editorial directive or policy on—

Mr Scott : No, they do not. There is no policy and there are no guidelines on the covering of renewables. We cover that as we do under our editorial policies. And I can tell you that I do not recall the program, and I have never heard that statement made before.

Senator MADIGAN: So Cheryl Hall has it wrong and my constituent has it wrong?

Mr Scott : Senator, you are relaying something that is second hand there. I am saying that I have never heard it before. We would need to go and check these matters and so I cannot possibly comment on them.

Senator DASTYARI: You made reference to what the Prime Minister said publicly, I believe, in question time:

… I have on several occasions complained very publicly and openly about the ABC's coverage of the NBN issue, in particular and most notably in the lead-up to the last election where I felt the ABC's coverage of the issue was very poor and lacked balance. I said so publicly, and I have said nothing privately that I have not said publicly.

Are you aware of that comment? You made reference to it.

Mr Scott : Yes.

Senator DASTYARI: Am I reading this right, that it is saying that the former minister, who is now the Prime Minister, spoke to you about this matter privately?

Mr Scott : Yes, Senator.

Senator DASTYARI: As the shadow communications minister? You and he had a direct discussion regarding Mr Ross—

Mr Scott : No. I cannot recall specific conversations about Mr Ross. The main thing I recall about Mr Turnbull's criticism of the ABC was that he thought we should have used our foreign correspondents more around a range of policy matters to do international comparisons of big issues in the lead-up to the last election. And he could not work out why we did not use them that way.

Senator DASTYARI: But that is not what—

Mr Scott : You asked me what he talked with me about. I am saying that my recollection of him—and I believe he said the same thing to other people at the ABC—was that he felt that we did not get enough into the deeper policy substance around the NBN and that he felt that we should have used our international correspondents more. I do not recall a conversation with Mr Turnbull about Mr Ross.

Senator DASTYARI: Do you recall conversations with Mr Turnbull where he said to you that ABC's coverage of the issue was very poor and lacked balance?

Mr Scott : I certainly remember him being critical of the coverage.

Senator DASTYARI: On the issue of balance?

Mr Scott : No, my recollection of it more was that he felt that we should have done more and more in-depth. That is my recollection.

Senator DASTYARI: These are the Prime Minister's words, not mine: 'I felt the ABC's coverage of the issue was very poor and lacked balance.'

Mr Scott : Well, he certainly thought it was poor. I do not recall the balance thing in particular. But he was critical of it when he met some senior executives after he became Prime Minister. I think he was critical of it in public statements. I think he may even have been critical of it in here.

Senator DASTYARI: I am not talking about post-election analysis here, when he was the minister. I am using his words: 'most notably, in the lead-up to the last election'.

Mr Scott : I remember in the lead-up to the last election he did suggest that we use our foreign correspondents more to cover the NBN and other issues. We did little bits at seven o'clock. That was my main recollection of him. But I must say, overwhelmingly my discussions with him were not to do with NBN coverage.

Senator DASTYARI: Did you ever have a discussion with him regarding Mr Ross?

Mr Scott : Not that I can recall.

Senator DASTYARI: Did you ever have a discussion with the ABC's head of corporate affairs at the time, Ms Sally Cray, about Mr Ross and the coverage of the NBN?

Mr Scott : I do not recall conversations with her about that. I would not really talk with her about content issues too much.

Senator DASTYARI: What would you talk to Ms Cray about?

Mr Scott : There were a lot of corporate issues.

Senator DASTYARI: She was head of corporate affairs—correct?

Mr Scott : Yes, she was.

Mr Millett : I should correct that. I was head of corporate affairs. Sally worked for me. She was head of media relations.

Senator DASTYARI: PR. I am using the term PR; you call it media relations.

Mr Millett : You can call it PR.

Senator DASTYARI: She was head of media relations.

Mr Millett : I will check on the exact title, because we have shifted a bit over the times. That was the main role.

Senator DASTYARI: That was always her job, wasn't it?

Mr Millett : That was her main role.

Mr Scott : That was always her job.

Mr Millett : That was her only role at the ABC.

Senator DASTYARI: Prior to coming to the ABC she came from Mr Turnbull's office?

Mr Scott : Yes, that is right. Actually, I think she had left Mr Turnbull's office when we recruited her.

Senator DASTYARI: And then after the election she went from there to Mr Turnbull's office—is that correct?

Mr Millett : That is correct.

Senator DASTYARI: So Mr Turnbull's current private secretary, his employee of some seven or eight years, was head of ABC PR?

Mr Scott : Yes, and she did an outstanding job. We urged her not to return to this place, but she did not follow my counsel.

Senator DASTYARI: There is madness amongst us all. But she had that role during the period and the events referred to by Mr Ross—correct?

Mr Scott : She was certainly working at the ABC at the time in the lead-up to the election, yes.

Senator DASTYARI: 'The Turnbull camp will come down on us like a tonne of bricks.' You have obviously read that a couple of times and you are well aware of it. Do you interpret that as meaning an internal squad within the ABC or external pressure?

Mr Scott : I never interpreted it as a squad within the ABC. I imagined it was Mr Turnbull, his policy adviser and his media people who worked for him. That is how I interpreted it.

Senator DASTYARI: So you interpreted that as meaning a reference to the office?

Mr Scott : We talk about the office. We would regularly talk about the Conroy office, the Turnbull office, the Abbott office. That is how we would often talk about politicians. The Fifield office—fine bunch they are.

Senator DASTYARI: Has there ever been a review of your overall NBN coverage?

Mr Scott : No, we have not done a review of that. Of course the board now has commissioned six or seven—six, I think—independent reviews of different content and programs. Q&A was one of those, of course. It is certainly within the board's remit to decide that they want to look at NBN coverage. That is not to say that internally within the news division they might not have looked at how we covered that. But when you talk about the kind of board that Ray Martin and Shaun Brown did for us, no, we have not done a specific one on NBN.

Senator DASTYARI: Sure. But, Mr Scott, that is the 'extreme'—my word not yours—where you have brought in Ray Martin and—

Mr Scott : No, we are doing four a year and we do them on big issues. So we do one on the budget, we did one on the free trade agreement and we did one of the higher education reforms. We do them on big, substantive issues. I do not think it is extreme at all; it is just part of the work that we are now doing as part of the accountability.

Senator DASTYARI: Okay. But you are saying that would be a decision for the board.

Mr Scott : Yes, the board commissions those.

Senator DASTYARI: But you are saying you also have internal processes to do those kinds of reviews, or, no, not on content?

Mr Scott : From time to time—it is not as structured and formal as the board ones, which happen externally. But they will look at programs and program coverage from time to time.

Senator DASTYARI: Does the board come to you for advice on whether it is a warranted or necessary—

Mr Scott : I am a member of the board, so I am open to the discussions. But final decisions on what to do are made by the board.

Senator DASTYARI: Has there been a discussion at board level about doing a review of NBN coverage?

Mr Scott : I do not want to talk too much about board processes, but it is on a longer list of issues that we might get to at some point.

Senator DASTYARI: Do you feel that that has changed as a result—

Mr Scott : That will be a matter for the board's discussion.

Senator DASTYARI: When is the next board meeting?

Mr Scott : That is Thursday.

Senator DASTYARI: Thursday, so the day after tomorrow?

Mr Scott : How serendipitous; yes, the day after tomorrow. It is a big week for us.

Senator DASTYARI: So the day after tomorrow the board will meet and the board can make a decision about whether—

Mr Scott : That does not necessarily follow. They commission four a year. There are some that are returning and I cannot say whether the board is commissioning another review at this board meeting.

Senator DASTYARI: No. What I am saying is you have a board meeting on Thursday and at that board meeting, the board can decide, should it choose to—and it can choose to neither of these two things—have a specific look at the entire Nick Ross matter and the matters raised by Nick Ross—

Mr Scott : If they chose to.

Senator DASTYARI: And it could also decide, should it choose to, to have a review into the overall coverage of the NBN, which is the broader issue that has been touched on by Mr Ross.

Mr Scott : Or they might choose another topic or they may choose that they have enough in the pipeline at the moment. What they have regularly done, though, up to this point, is pick a period of time and look at coverage for a period of time. So we look at higher education coverage over six months and we look at the free trade over several months, so we have all the relevant material on the matter. We have done many, many stories on the NBN, so I would think it is highly unlikely that we will go back and look at years and years of NBN coverage. But we will take a snapshot.

Senator DASTYARI: There appear to be two separate purposes why the board would do this and why it has done it in the past. One is for general good practice of auditing. Every once in a while you pick a section, you audit it for the purposes of making sure there is coverage and transparency. One is a standalone audit for the purpose of good governance and the another is to address what may or may not, in the opinion of the board, be a community concern. So the Zaky Mallah matter—

Mr Scott : No, you are wrong. The Q&A review was commissioned prior to the Zaky Mallah event. We had decided that we would do Q&A. It was a big program, big audiences—

Senator DASTYARI: Controversial topics, understandable.

Mr Scott : generating significant debate and so we took a look at it and we decided to look at six months of programming.

Senator DASTYARI: Then that review ended up looking, in part, at the specifics around that event?

Mr Scott : No, it did not look at that event.

CHAIR: Senator Dastyari, if I could intervene for a moment. I will bring you back to your comments to me as chair at the very beginning of this hearing today, expressing your desire to be succinct so that you could afford your colleague maximum time this evening. I am very comfortable about how we use our time today, but I would point out we have got an afternoon tea break shortly and we have at least another 20 minutes from other senators who have questions for Mr Scott. I bring that to your attention because that will put us an hour and a half behind schedule, and I know there are a lot of questions for the people who have been waiting very patiently here from the arts community. As is your right, you can take the time you want with Mr Scott, but I remind you of your offer this morning.

Senator DASTYARI: Chair, you have been incredibly gracious.

Senator Fifield: We just have the cultural institutions waiting.

Senator DASTYARI: I have a lot more questions on this matter, Mr Scott. I will attempt to place them all on notice. I will just go through and see if there are one or two others that I want to ask on this. Otherwise, there is quite a bit to place on notice. But I do note that it seems to be we are getting to the conclusion of—the broader-issue answer that Mr Scott appears to be giving, which I think is where we are at, is that these are now matters that the board may or may not choose to take up on Thursday.

Mr Scott : I will just simply add to that: I want to put on the record my respect for Bruce Belsham—

Senator DASTYARI: What about respect for Mr Ross?

Mr Scott : I have already made comments about Mr Ross. But I want to put on the record my respect for Mr Belsham, who I think is an unfortunate victim in these circumstances. I believe he is an executive of great integrity who has served the ABC with distinction for many years. His time as executive producer of Four Corners was absolutely innovative and outstanding. I think it is very important that his reputation not be hurt in this matter. I endorse his judgement and I believe he has done a strong job in his role—a strong role.

Senator DASTYARI: I think we are at a point where—I think I made my point that there should be an independent review and an independent investigation into this matter, but I think that point has been made.

CHAIR: I think your particular perspective has been well noted by the committee and by Mr Scott, so thank you, Senator Dastyari. Now, you have a follow-up question, Senator Ludlam, on this.

Senator LUDLAM: Just one. It will relate then to reporting of these matters. This might be in the nature of the snake eating its own tail. There has been almost no reporting—in fact, maybe none—apart from New Matilda and Crikey, and one piece in the Daily Tele attacking New Matilda; nothing from the ABC about this. You have clearly disputed what is occurring, but you would not deny, I hope, that they are, at least, serious allegations. How do you handle reporting where the ABC itself is the subject?

Mr Scott : It is a good question. I believe that, if you look at our history, we report robustly on ourselves. The toughest interviews I have ever had have been at the hands of ABC journalists. For all of—

Senator Fifield: Have you been on an ABC interview?

Mr Scott : I do—from time to time.

Senator LUDLAM: Don't take the bait.

Mr Scott : Selective! On this matter, that is just a matter for the editorial judgement of our news team. I had no discussions with anyone around this matter, but I do think it is noteworthy that people followed this matter closely, including those outlets that are not always favourable towards the ABC, and people have come to their own judgement over those.

Senator LUDLAM: Let's just take off the table—I think what you are implying is there has not been any kind of directive go out editorially not to cover it.

Mr Scott : Absolutely not.

Senator LUDLAM: So your entire cohort—maybe 2,000 journalists—have just decided unanimously that there is no public interest in reporting what is going on here.

Mr Scott : Can I say: it does not work like that.

Senator LUDLAM: Well, nothing has been reported.

Mr Scott : It is not, contrary to some critics, a great collective where everyone does their own thing. Editorial judgement is made by our senior editorial managers. They decide what is newsworthy—those who run current affairs programs and radio and those who make decisions as to what goes online and what goes in news bulletins. Editorial judgements are made, and editorial adjustments have been made on this. But none of that has been referred up to me. I have been privy to no conversation around any of this coverage at all.

Senator LUDLAM: All right. I will just leave it there. I will come back with some other stuff a bit later.

Senator McKENZIE: I have a line of questioning that I look forward to pursuing with you when we start our inquiries into the Australian Broadcasting Corporation Amendment (Rural and Regional Advocacy) Bill over the next coming months. We will see if it gets some coverage on your variety of media.

Going back to our earlier conversation about your funding bid to increase the funding to the ABC from the government, specifically around provision of services to rural and regional Australia, doesn't that actually just simply mask the fact that for the past decade, Mr Scott, there has been a retraction of not only financial resourcing out of provision of services to rural and regional Australia but, indeed, people, human capital, out of the regions, consolidated into Ultimo, which we have traversed many, many times?

Mr Scott : It depends a little bit by your definition of regional. There is no doubt that we have closed down regional television studios in the capital cities. My question to you would be: do you think Adelaide or Perth are regional in your definition of 'regional'? If that is the case, then, yes, we have—

Senator McKENZIE: I have asked several times and I get either no answer or, like today, 25 of my questions on notice arrived after this hearing had started. That is absolute disrespect to the Senate process. Senator Ludlam and I were here prior to Christmas, we wished you and your staff a Merry Christmas, and asked, 'Would getting the QONs in on time be a problem?' 'Not at all, Senators, not at all.' Yet months later finally I get answers to my questions on notice which means that I am unable to prosecute them, so I will be looking forward to the inquiries to do that.

Mr Scott : Can I respond to that. We did send them off at the end of January. They were returned to our office with further queries from the department last Monday and then we turned them around as quickly as could. So, Senator, we did have them in by mid to late January, so we can look at that.

Senator McKENZIE: I will pursue that elsewhere.

CHAIR: I will also pursue that, Mr Scott. You may or may not have heard that I had a talk to the secretary this morning about the extreme tardiness of the whole communications portfolio with questions on notice, and she is endeavouring to fix the system within the department. Can you clarify for me that we had the hearing on 30 November, by my records, and they were due to the committee by 27 January, so that is quite a generous time. When did you have all of your questions into the department.

Mr Scott : On 28 January. We missed that by a day.

CHAIR: No, they were due to us by then, not through the department.

Mr Scott : We had them to the department on 28 January and then there were further questions that emerged from that. We received the questions on 11 December.

CHAIR: I will address that again with the secretary because clearly that does not give the department time. If you have already got them a day late to the department, it does not give them enough time to go through their processes and get them to the committee on time. Thank you.

Senator McKENZIE: Could the ABC please provide me on notice, unless you have the figures here,—and I would love to have the figures—over the last decade the trend of staff employed in local radio outside of capital cities, the proportion of your overall budget spent on local radio service provision outside of capital cities and the minutes of local content aired by local radio outside of capital cities? I asked this question on notice and it was just under three per cent of your total operating budget that was set aside for the provision of local radio services outside of capital cities, which I would argue is not enough, so I would to, as you say, flesh that out over time.

Mr Scott : You are excluding transmission, clearly, in that?

Senator McKENZIE: Yes.

Mr Scott : You do not think transmission is a cost of a rural service?

Senator McKENZIE: I base my questions on the answer to the question on notice, so if I could get the trend over the last 10 years, that would be fabulous, because it is very hard to find that data publicly. Mr Scott, I would like your opinions on transmission costs and transmission service arrangements. Does the ABC have a transmission service arrangement with Regional Broadcasting Australia Holdings?

Mr Pendleton : Who were you referring to?

Senator McKENZIE: Regional Broadcasting Australia Holdings?

Mr Pendleton : No.

Senator McKENZIE: No? Do we use any of their infrastructure to broadcast?

Mr Pendleton : A number of the ABC's services are carried by RBAH as a result of the switchover.

Senator McKENZIE: Does the ABC contribute to the maintenance of that infrastructure at all?

Mr Pendleton : No, it does not, Senator.

Senator McKENZIE: When you say 'a number', how many?

Mr Pendleton : I believe there are about 80 or 81.

Senator McKENZIE: Is it 86?

Mr Pendleton : I thought it was 81.

Senator McKENZIE: Okay. I will not split hairs about five base stations. What is your usual arrangement with having to share that sort of infrastructure?

Mr Pendleton : My recollection of those services is that they are black spots that emerged as a result of the switchover to digital television. That should have been picked up as VAST services, and it is my understanding, although the ABC is not a party to any of this, that a deal was done with RBAH and the department whereby RBAH would provide services and carry the ABC and SBS on those services.

Senator McKENZIE: How long for?

Mr Pendleton : I do not know, but I think indefinitely.

Senator McKENZIE: Do you know how much regional broadcasters have to pay to access that infrastructure?

Mr Pendleton : RBAH has written to us outlining the claims. I think our share of it, between us and SBS, is $1.2 million per annum. They are asserting that the ABC and SBS need to contribute towards this. Given the infrastructure that was put into place, it was not a number of transmitters, it was just a single unit that was applied into each of these black spots, of which the ABC, SBS and all other services are on. I do not know how they have come to that number. As I said, we are not a party to the deal that was done or to the arrangement to not allow VAST services into these black spots. It was a deal done with RBAH.

Senator McKENZIE: Do you understand that there are concerns amongst regional broadcasters, given that it almost looks like the ABC is getting a free ride into these communities?

Mr Pendleton : We are concerned as well, given that these black spots should have been VAST infills, in which case all the broadcasters would have received the same coverage within these areas. With the agreement to allow RBAH to put re-transmitters into these locations, so long as we are all in the same location we do not disagree with it.

Senator McKENZIE: On notice, that $1.2 million request by RBAH, could you let us know what discussions have been had within the organisation about whether you are going to pay for that?

Mr Pendleton : We have written to the department about it, Senator.

Senator McKENZIE: Thank you. Finally—and not a Dastyari 'finally'—the 1996-97 annual report saw rural and regional Australia as a significant priority of the ABC. It had a budget of $600 million and a significantly greater service provision to rural and regional Australia at the time, I would argue, than now. We talked about simplistic approaches to budgeting. I would argue that in a constrained fiscal environment such as we are in at the moment, both you as an organisation and we as a nation, that the simplistic view would be to just throw money at something rather than actually choosing to target the very precious resources of the taxpayers. Wouldn't you argue that, since 1996 to now, that is 10 years, the huge explosion of technology, the changing in processes and human capacity, indeed, means that we can find those efficiencies within the organisation?

Mr Scott : Of course we have.

Senator McKENZIE: That is the non-simplistic reaction.

Mr Scott : Of course we have, Senator. I would say to you that, if you go back to 1996, two very significant funding cuts have happened since then. The volume of content that the ABC is producing to rural and regional Australia has vastly increased. ABC News 24—

Senator McKENZIE: Could you, on notice, provide the minutes increasing the local content?

Mr Scott : Senator, if you look at what we produce now, available in every Australian home including rural and regional Australia, ABC News 24, ABC3, all the programming that is available in iView, the host of news services that we are now streaming—

Senator McKENZIE: Mr Scott, I am not talking increasing content. No-one would argue that. I am arguing about locally relevant, locally produced content. In 1996 with a budget almost half of what you have now—

Mr Scott : Are you saying we are not servicing those areas?

Senator McKENZIE: I am not saying that at all. What I am saying is that there has been a trend over time to focus the resources of the organisation to elsewhere other than service provision of essential services to rural and regional Australia.

Mr Scott : We do not actually have to be living in the area to service the area, Senator. That is not the only way to provide the service.

Senator McKENZIE: I think there is a huge argument around understanding a community, reporting on a community and reporting in a community—a very different context.

CHAIR: Thank you very much, Senator McKenzie. Senator Ludlam. For the benefit of Mr Scott, Senator Ludlam is the last questioner. We will take afternoon tea a bit late and then we will come back and move onto the next program.

Mr Scott : The arts community is waiting.

Senator LUDLAM: They are waiting, and we do not like keeping them waiting.

CHAIR: Very patiently, thank you.

Senator LUDLAM: They have had a rough year. This is the last bracket. I add my comments, Mr Scott, to those of my colleagues earlier. We have had our run-ins across the table, as I guess many of us have, over the last few years, but I do not think that anybody anywhere would say that you were not always firmly in the corner of the ABC, so thanks for your time at the helm.

Mr Scott : Thank you.

Senator LUDLAM: I wish you well in whatever comes next. I have a couple of questions that follow up on some work that Senator Milne did three or four years ago. It is around comparing the 2012-13 financial year figures with those for 2013-14 and then 2014-15. I am looking for whether or not there has been a continued reduction in the content budget for ABC TV; and, if so, what the amounts are for each year. You might want to take that on notice.

Mr Scott : We will take that on notice.

Senator LUDLAM: If you can speak to trend, I would appreciate that.

Mr Scott : Yes, we will take that on notice.

Senator LUDLAM: Can you at least give us some comments on trend?

Mr Scott : Well, yes, we did pull some money out of television last year, on the back of the budget cuts, because we needed to invest more in digital. I think, if you take the long view of television, certainly, we put more money into drama and, certainly, we put more money into children's television; but, in the last few years, there has been some consolidation.

Senator LUDLAM: Okay. I guess I was not looking at the long-run trend—more just since the 2012-13 financial year, which was what Senator Milne asked about previously. Have there been specific reductions since then in the budgets for drama, children's programming or documentaries?

Mr Scott : Yes. We can give you the breakdown on notice.

Senator LUDLAM: All right, if you are able to. You spoke of budget cuts; that does not come as any surprise. Was the other factor that you mentioned the shift to digital?

Mr Scott : It is one of the challenges we face. At the moment, one of things we are trying to prioritise is investment in iview. What we want to do around iview is deliver a better service, including some original content, and so we are taking some television money and investing it in iview original content—and that may be money that was once available for traditional broadcast programming and may often get a second window around that. Part of our challenge is that we want to hold our investment in radio and television as best we can and at the same time increase the digital opportunities, and our audience expects all of that. They still want radio and television—

Senator LUDLAM: Sure.

Mr Scott : but of course they want increased digital content and services.

Senator LUDLAM: While budgets are going down. So are you forecasting reductions in the content budget for ABC TV and, in particular, for those three line items—drama, children's programming and documentaries—going forward?

Mr Scott : The budget was cut a little bit at the beginning of this year as part of $20 million we took out of content to reinvest in digital. They are looking to work their budgets effectively, and one of things that we are hopeful that we can do, while still maintaining editorial control and responsibility, say, around drama projects, is that through enlisting the right kinds of partners we might be able to make our drama budgets go further. So we are still working through the full impact of some of these changes on air.

Senator LUDLAM: All right. That sounds like a bit of a foreboding, actually. Do you expect further cuts in ABC TV's commissioning budget, then?

Mr Scott : What we are asking all divisions to do is try and find efficiencies so that we can reinvest that in content. We want less spent in the back office and more spent on what our audiences can experience. There are some questions about funding that expires in this budget and that we are putting in new bids for. But we are trying to protect content budgets as best we can.

Senator LUDLAM: All right. My final question, which I think probably should go on notice as well, is whether, for each of the financial years from 2010-11 to 2015-16 forecast, a breakdown can be provided of expenditure incurred and hours produced of commissioned, produced and broadcast Australian programming? So there are three separate categories.

Mr Scott : Yes. We will get that detail for you on notice.

Senator LUDLAM: I think you provided some of the earlier stuff to us before. But, if we can get that six-year series, that would be greatly appreciated. Thanks again for your time.

Mr Scott : Okay.

CHAIR: There being no further questions for the ABC, Mr Scott, thank you very much and, again, good luck. Thank you for your service to the ABC and good luck for the future.

Mr Scott : Thank you.

CHAIR: The committee will now suspend for afternoon tea and resume with the Australia Council for the Arts.

Proceedings suspended from 15:29 to 15:44