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In real terms, the ABC is still going backwards

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Dave Sharma, the Liberal federal member for Wentworth in Sydney’s Eastern Suburbs, is fighting for his political survival against independent candidate Allegra Spender, who supports a well-funded ABC. In a recent election leaflet, Sharma claims that he has ‘helped secure a record increase in funding for the ABC’. With the help of former ABC executive Michael Ward (now at the University of Sydney), ABC Alumni chair Jonathan Holmes has been looking at the figures in the federal budget. Far from a record increase, writes Jonathan, it’s likely that the ABC will be worse off, in real terms, than it is now.

By Jonathan Holmes / 31 March 2022

The figures, when you look at them closely, are stark.

The ABC’s operational budget for this financial year, 2021-22, including the Enhanced Newsgathering Fund of $15m, is just over $880m.  [A further $200m, give or take, goes to the entities that provide transmission services for the ABC’s signal, and doesn’t affect its output.]

According to the ABC’s Portfolio Budget Statement in the budget papers (p.130), that operational funding will grow by about $5.6m in 2022-23, $17.9m in 2023-24, and $14.4m in 2024-25.

As Michael Ward points out, that’s an increase of 0.7% in the first year, 2.0% in the second, and 1.6% in the third.  

Yet the Consumer Price Index (CPI) has grown by 3.5% this financial year, and is projected to increase at least as much next year.   

So how is a 0.7% increase ‘indexation’?

Well, taxpayer-funded entities like the ABC are not indexed to the CPI but to a different measure, a weighted average cost index used by the Department of Finance, which generally produces lower increases than the CPI.

But the ABC’s expenses – wages, travel costs, equipment purchases, and all the other goods and services it buys – are likely to increase by at least as much as the CPI, and perhaps more.

So in real terms, in all likelihood, the ABC will be worse off in three years’ time than it is now.

And remember, the indexation was ‘paused’ for three years, from July 2018 to the end of June this year. So the new indexation is being applied to a substantially lower operational budget than the ABC would have had without the pause.  

On top of that, cuts to the ABC’s budget since the Abbott government’s 2014 budget have cost it, in the intervening years, well over half a billion dollars.  If we factor in the abrupt ending of the contract to provide the Australia Network to our Pacific and Asian neighbours, that cumulative shortfall increases to over $700m.

The Coalition is certainly not proposing to remedy any part of this. Nor, despite its welcome promise to fund the ABC on a 5-year rather than a 3-year basis, has the Labor Party. Five-year funding is all very well – and it’s something ABC Alumni has been calling for – but only if it’s adequate funding.  

The promise of inadequate funding for five years rather than three is hardly a major advance.

As things stand, we can’t see the ABC being able to extend its services.  Weekly state-based current affairs? The restoration of Lateline? More Australian drama, better and more relevant Australian documentaries?  Dream on. 

As for that claim about a ‘record increase’ – well hardly.  

Michael Ward points out that in 2009, the Rudd government increased the ABC’s budget by $136m over three years, to pay for more drama and children’s programs. And it added an additional $30m for regional broadband hubs – with indexation on top of those increases.

The Hawke government increased the ABC’s funding by $55m in 1984, and a further $84m in 1985 – way more than the current government’s promised increase of $87m over three years, even in nominal dollars. In real terms, given the value of the 1984 dollar, the Hawke numbers dwarf the current ‘record increase’.

Fact: thirty years ago, ABC funding represented 0.4% of total government spending. Today, it represents a mere 0.14%.  And for that, the public gets vastly more – more television channels, more radio channels, a cornucopia of online offerings – than it did in 1992.

ABC Alumni and its allies need to push Labor to promise better, and do better, than the Coalition’s measly ‘record increase’ – which turns out to be a real decrease – in funding for our crucial national broadcaster.

NOTE: For comprehensive figures on ABC funding over the decades, see the appendix by Michael Ward to the just-published book by Matthew Ricketson and Patrick Mullins, Who Needs the ABC? The Alumni’s review by Greg Wilesmith is here.

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