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One for you... one, two for me - Minister Fletcher's ABC funding confidence trick

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The ministerial announcement this week, outlining ongoing funding for the ABC, was clearly pitched to convince voters of a ‘strong government commitment’ to supporting the national broadcaster. But as Alumni director Quentin Dempster explains, it’s more spin than substance. The Minister’s budget 'increase' is tiny when compared to more than half a billion dollars that's been cut from the ABC’s budget over the last eight years, rising to around $700 million when defunding of the ABC’s crucial international service is taken into account.

By Quentin Dempster /11 February 2022

One for you .. one, two for me. 

Communications Minister Paul Fletcher is trying to pull what amounts to a confidence trick on the Australian electorate over ABC funding.

By rolling three years of projected transmission and operational funding plus tied grants for regional news gathering into one impressive figure the minister’s announcement of an end to an indexation ‘pause’ was claimed to have finally addressed complaints that the ABC was being punitively defunded by the Coalition government.

“The evidence is clear: the Morrison government has provided strong and consistent support to the ABC,” Fletcher wrote in an article published in The Australian.

But the trick was soon exposed on social media by former ABC editorial standards director Alan Sunderland with a pocket money parable, by The Conversation’s Alexandra Wake of Journalism, RMIT University and Michael Ward of the University of Sydney. Crikey’s Bernard Keane and Glenn Dyer, and The New Daily’s finance commentator Michael Pascoe likewise concluded that the Minister’s announcement was pre-election political spin. The addition to the ABC’s budget, they point out, is trivial. 

Significantly, neither of the ABC’s mainstream media rivals, News Corp and Nine Entertainment, applied the necessary analytical rigour to test the Minister’s “evidence”. The operative words in the confidence trick are “the Morrison government”: they cover only the period from Morrison’s Liberal party room elevation from Treasurer to the prime ministership in August 2018.  

All the analysts and commentators I have mentioned looked at the history of ABC funding since Tony Abbott’s hand-on-heart promise in the 2013 election campaign: ”no cuts to the ABC or SBS”.

The Abbott Government’s first budget delivered by Treasurer Joe Hockey in 2014 reduced the ABC’s three-year appropriation effectively by 10 percent.   

If you want the ANAO audited figures go to the ABC’s formal answer to Budget Estimates (Environment and Communications) Question on Notice Number 100: “Funding reductions by government, including the return of capital, since 2014 have totalled $526m up to 2021-22, with the ongoing reduction to the indexed funding base in 2021-22 being $106 million per annum”. 

So that is $106 million per annum: gone. 

As a consequence of the 2014 Hockey defunding the ABC Board had to restructure and downsize the organisation, shedding staff, dumping programs, production, acquisitions and services.  

In 2014 then Foreign Minister Julie Bishop unilaterally terminated the ABC’s 10-year DFAT contract after just one year, worth just short of $200m over the remaining nine years, decimating the ABC’s multi-lingual broadcasting and online services in the Asia-Pacific region, and giving China a free go to win the hearts and minds of our neighbours. 

In 2018 the Turnbull Government with Treasurer Scott Morrison imposed what then Communications Minister Mitch Fifield described as an indexation “pause” for the next three years, said to be an incentive on the ABC to drive further “efficiencies”.

The pause, according to Budget Estimates, cost the ABC $83.749m from 2019 to 2022. The “efficiencies” were further reduction of programs, supply contracts and services. Australians might remember the institutional 7.45 am 15-minute radio news bulletin introduced by the full Majestic fanfare was discontinued as part of the ABC Board’s response. There were more repeats of British drama shows on prime time, and all TV production outside Sydney and Melbourne was terminated. Another 200 mostly experienced program-makers received long white termination envelopes. 

The ABC told Budget Estimates in answer to Question 100: “In addition to the cumulative reduction over the Triennium to 2021-22 of $83.7 million, the ongoing impact from mid-2022 is a reduction to the indexed funding base of $41.3 million per annum.  While indexation to base funding is forecast to return from 2022-23, there will be an ongoing impact on funding in the forward years from the indexation pause.”  Please note this, because herein lies the confidence trick. Ending Fifield’s indexation “pause” will apply from an already lowered base. 

Wake and Ward (The Conversation): “While ending the freeze means future ABC funding will take some account of inflation, it does not address the impact of the freeze itself from 2019. The ABC has said this is a problem. In answer to a Senate Estimates question in October 2021, the broadcaster said this would result in a funding shortfall of just over $40 million annually, which would continue to be felt in future years.

“Our research also factors in the ABC’s loss of the ten-year Australia Network contract in 2014. This resulted in a reduction in funding of $186 million, which is represented across the balance of the contract term. 

“Certainly, the ABC does continue to do some international broadcasting, particularly in the Pacific, but it is no longer the dominant broadcaster in the region it once was. Restoring and even boosting the funding that was given to the Australia Network would go some way to improving Australia’s standing in the Indo-Pacific region.

“We found the total lost funding continues to accumulate at well over $100 million annually through 2024-25. In other words, if the government truly wanted to restore the ABC’s funding, it would need to increase its budget by at least 10% annually.”

Since the 2018 boilover (in which then ABC MD Michelle Guthrie was terminated by her dissatisfied Board, and days later Chairman Justin Milne was forced to resign), new Chair Ita Buttrose and new MD David Anderson had been asking for future funding certainty following the Morrison government’s re-election. 

Perhaps this best explains Buttrose’s relieved response to Fletcher’s announcement: “I am delighted with the Government’s decision to commit $3.3 billion over the next three years to the ABC”.

Up until that announcement Buttrose and her Board had no idea of future funding beyond June 30 this year. Buttrose and Fletcher have had a hostile relationship. In December 2020 the Minister wrote a threatening letter clearly implying she and her Board had breached the ABC Act in allowing the broadcast of the Four Corners program “Inside The Canberra Bubble”. The program and other consequent ABC coverage of ‘the Porter affair’ provoked Liberal power broker Michael Kroger to denounce Buttrose, claiming she had lost control of the ABC and demanding her resignation. The ABC, claimed Kroger, was “throwing acid in the face of the Liberal Party”. 

Buttrose stood her ground and hit back in November last year with probably the strongest statement yet delivered by an ABC chair, that the ABC was being subjected to intimidation and interference over its complaints-handling process.

Buttrose, her Board and management are now waiting to see Fletcher’s “announceable” committed to tabulation in Treasurer Josh Frydenberg’s federal budget on March 29. 

Australians are entitled to be deeply sceptical about all this. The Coalition now has a demonstrated pattern of dishonouring pre-election promises. John Howard in 1996 promised to maintain ABC funding, then immediately dishonoured that commitment on coming to government. Likewise, Tony Abbott in 2013. 

Sorry to be cynical, but given this pattern it can be expected that the Coalition’s current commitment will dematerialise if it is re-elected in 2022 and, under cover of a whole-of-government deficit reduction strategy by Cabinet’s Expenditure Review Committee, the ABC appropriation will be further cut.

That is the realpolitik here.

We can all expect hostilities to resume if the Coalition is re-elected.

Portentously Minister Fletcher has issued a “Statement of Expectations” to accompany his future funding promise. He plans to set up a new “National Broadcasting Reporting Framework” to be overseen by the regulator, the Australian Communications and Media Authority. All content providers, including streaming services, national, commercial and subscription broadcasters will be required to report exactly on the content they produce by genre category. Unlike the commercial TV networks, Nine, Seven and Ten, the global video streamers have no legislated and mandated content quotas. Neither does the ABC.  

Content quotas would remove the current independent discretion of the ABC to allocate resources as the board sees fit in meeting its ABC Act obligation to provide comprehensive services to the Australian public. 

Fletcher wrote: “I have asked the ABC to include in its future annual reports a range of metrics regarding its delivery of rural and regional activities, including the number of ABC staff employed in rural and regional Australia”.  On its face this seems reasonable, but will be resisted by the ABC if it leads to legislated quotas on the ABC and any government-directed deployment of staff.

The ABC could be further wedged and weakened through Fletcher’s “Statement of Expectations” particularly as the trickle of extra money will not cover ever increasing production costs in the years ahead.  

At the moment the Albanese Labor Party and Shadow Minister Michelle Rowland have publicly committed to restoration of the indexation pause money and five years of budgeted funding certainty but with only a promise of a review of ABC funding to meet future content needs.  

This is hardly adequate given the destructive defunding of the ABC over the last nine years. The ALP has been more prominent in its support for the ABC since the 2019 election and recently has been calling on the public for donations based on this ABC support.  

After the 2019-20 climate change bushfires and the COVID pandemic elevated the public’s reliance on and regard for the ABC, the ABC’s survival is now clearly a major election issue.

And as the 2022 election campaign unfolds into an intense battle for marginal seats Australians are entitled to ask all candidates if they support the full restoration and enhancement of funding for Australia’s most trusted institution. 

* Quentin Dempster is a journalist, broadcaster and author, and a director of ABC Alumni Limited. 

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