Ramifications continue from the ABC’s Federal Budget allocation and the consequent decision to cut the ABC’s two digital TV channels.

In the latest moves: ABC Managing Director Russell Balding got a grilling at this week’s Senate Estimates Committee hearing; Communications Minister Alston wrote to the ABC requesting an investigation into Iraq war coverage; and the opposition accused the government of declaring war on the ABC.

Here are details:

THE LETTER –

In his letter to the ABC Senator Alston listed 60 instances where he thought ABC reporters had been “openly critical of the US-led coalition” and had not followed their journalistic obligations to be neutral because they had been “infected” by the views of the Head of Current Affairs. He particularly mentioned ABC Radio’s AM program.

“It is of considerable concern that the ABC’s director of news and current affairs Max Uechtritz is reported to have admitted to a session on the lessons learned from the war in Afghanistan at the News World Asia Conference in August 2002 that in hindsight the ABC was guilty of slanting its reporting towards the US campaign.”

In a media statement Senator Alston said: “My letter includes a comprehensive analysis of AM’s coverage of the conflict from its commencement to the fall of Baghdad, and refers to more than sixty examples where it appears that appropriate journalistic standards may not have been upheld.”

Examples of what Senator Alston considers bias and a beat-up in AM programming can
be found by clicking
here.

At the earlier Estimates Committee hearing the topic was also raised:

Senator SANTORO — I would like to canvass some issues of balance in the ABC’s news and current
affairs presentation. I need to say at the outset that I do so with some reluctance, because I believe that the
ABC is an invaluable public asset and its services are generally first-class. ABC broadcasting is, of course, an
essential medium for Australians. But, in recent times, I believe there have been some instances where
objectivity has been lost, to a considerable extent. I would like to get your views on that from your
perspective, which, of course, is effectively the perspective of the editor-in-chief of the ABC. I particularly
want to refer to some comments made by the ABC’s Director of News and Current Affairs, Max Uechtritz, at the second annual Newsworld Asia conference in Singapore last August. He said at that conference that, in
hindsight, the ABC was guilty of slanting its reporting of the Afghanistan conflict towards the United States
view of international military operations there against the Taliban and al-Qaeda. I would like to ask you
whether it is true that Mr Uechtritz told the conference, ‘We now know for certain that only three things in life
are certain: death, taxes and the fact that the military are lying bastards.’ Are you aware of that comment?

Mr Balding — No, I do not believe I am.

Senator SANTORO — He also said, at the same conference, ‘The lessons of war? So much technology, so
many outlets, so much ignorance.’ I would like to ask you whether you agree with Mr Uechtritz’s comments,
including the one about the military being lying bastards. Do you consider that this is an appropriate comment
for Mr Uechtritz to be making on behalf of the ABC?

THE RESPONSES –

Opposition Communications Spokesman Lindsay Tanner said: “John Howard and Richard Alston have declared open war on the ABC. John Howard is now trying to turn the ABC into the propaganda arm of the Liberal party. This is a dark day for Australian democracy.”

Friends of the ABC spokesperson Terry Laider said: “Senator Alston’s incorrigible behaviour is giving the job of Minister for Communications a new title, Minister for Propaganda. It has become impossible not to suspect the motives of a Minster and his government who attack the independence of the national broadcaster at every opportunity – cut its funds, complain about its coverage and stack its board with people they perceive as their supporters.”

”It is inappropriate that the Minister responsible for maintaining the ABC’s independence continuously attempts to bully the broadcaster into the Government’s way of thinking. On any occasions he has a grievance about ABC coverage, Senator Alston, like all other citizens, is entitled to take his complaint through established mechanisms. These procedures allow allegations of bias to be considered and dealt with on their merit.”

On ABC Radio’s Media Report (Thursday 29 May) Russell Balding and Senator Alston spoke to host Gerald Tooth. Russell Balding maintained that the ABC had not mis-managed its budget in initiating new services, whcih were now being cut. He said that the triennial fuinding submission clearly said that the ABC had worked hard to find funds within its allocations to begin extra services such as ABC Kids, Fly TV, ABC Online and NewsRadio, but that the recent budget subsmission had flagged that more funds were requried to maintain them into the future. Without the funds there woudl have to be cuts – the first of which were the digital TV channels.

THE ESTIMATES COMMITTEE –

During a long hearing session ABC Managing Director Russell Balding faced questioning about why the ABC could not find funds for the axed digital TV channels but could pay significant amounts for other things, such as presenters salaries. Here is some of what was said:

Senator CONROY — Mr Balding… could you now advise the committee what are the implications for the ABC’s programs and services, given that the government rejected your funding bid.

Mr Balding — Senator… without additional funding for content we are unable to sustain
our current level of output. On budget night I said that the government had decided to reject our funding request in the full knowledge that it would have a negative effect on ABC programming and that the ABC must now assess its position. I said that hard decisions now had to be made, having regard to the funding made
available to us.

We have now made the first of those difficult decisions. This morning the ABC will be issuing
a media statement advising that we have decided to close our digital multichannels—that is Fly TV and ABC Kids. Senator, we regret having to make this decision but we were left with basically no other option. As we speak, consultation is taking place with affected staff over their future employment and ABC staff and management are also being advised of the decision. The consultation process with the unions will also commence today. Furthermore, this will not be the only implication of the rejection of our bid for additional funding. We will have to make other difficult decisions over the next two months so as to ensure that the ABC continues to operate within the funding levels provided to it by government.

Senator CONROY — How many staff will lose their jobs in the closing of the digital?

Mr Balding—There are about 35 or 38 staff that are impacted by this decision. As to the precise numbers
that may lose their jobs, I am not in a position to say precisely at the moment. You will understand we have yet
to go through the full consultation process with the unions, so I am not in a position to say precisely at this
stage until that consultation process has been completed.

Senator CONROY — Now this was the brave new world: digital. You are withdrawing from it completely?

Mr Balding—In respect of the multichannels, yes. We have no further option other than to withdraw from it. We do not have the source of funding to keep those channels going.

Senator CONROY — Are you in a position to give us a broad outline of the areas which are likely to be affected by the other cuts you have flagged?

Mr Balding — Not at this stage…

Senator CONROY — What sort of money are you looking to save now?

Mr Balding — Closing the multichannels will save us approximately $7 million, but there are still areas in which we need to save. We are working our way through those…

Senator CONROY — Do you have a target of the savings you have to make in other areas? …

Mr Balding — We could be talking in the order of $20 million to $25 million plus…

80
Senator CONROY — Minister, do you think this is a reasonable outcome?
Senator Alston — We have only very recently been made aware of this decision, which I understand was
made by the board last Thursday. I am not aware whether the board examined any other options, but it would
seem to us that, given that funding is available until the end of June, the board had an opportunity to have a
close look at any other areas which they felt they might need to explore—if they do find it necessary to seek
other sources of funding. As far as the government is concerned, we have maintained funding in real terms.
Over the next three years, the ABC will receive over $2.1 billion. As the ABC constantly remind us, we do not,
in normal circumstances, earmark funding. In fact, when we gave the ABC funds for the national interest
initiative, as they call it, we did that on the basis that it would be available for regional programming and
funding. Having received the money, the ABC made it clear that it was entirely a matter for its discretion but
ultimately agreed that most of the funds would be committed to regional areas.

The ABC clearly has discretion as to how it spends its funds. That means that, if it has a serious
commitment to digital television, it has the option to pursue that further, as have the BBC, for example. The
BBC have taken the view that the world is going digital, that that is an area in which they need to get heavily
involved and they have made it a top priority. As I understand it, when the ABC first embarked on Fly and
Kids back in the second half of 2001, it did that off its own bat—in other words, the ABC did not consult us
about the decision, it did not seek funding from us and it did not seek commitments at that time or make it
clear whether that commitment was only temporary, if that were the case at the time. What seems to have
happened is that it has decided that this is an area for which it would like more funding and, funding levels
having been maintained, the ABC has taken the opportunity to cut this back. That is the ABC’s decision. As I
say, if it has not examined other options, it would seem strange that there is no other area in which the ABC
could have sought additional funding if digital is in fact a priority.

Senator CONROY — Perhaps, given you were in the next room, you did not hear Mr Balding’s earlier
answer. He indicated that they are still looking for possibly as much as $25 million in a whole range of other areas.

Senator MACKAY — How does that represent no funding change in real terms? …

Senator CONROY — I was just about to make that very point. Minister, you have indicated that you have
maintained their real level of funding, but if you want them to expand into a new area the only way they can
do that is by cutting something else, unless you increase their funding on a real basis…

Senator Alston—The parliament permitted the ABC and SBS to multichannel, and the ABC took a
unilateral decision that they would do that. They did not come to us at that time and say, ‘We’d like to do it but
we can’t afford to do it,’ or ‘We’ll only do it for a short term, on the condition that you give us extra funding.’
They did it off their own bat. Presumably, they regarded it as a high priority. That is what having $700-odd
million a year enables you to do, and in fact should require you to do—decide how you spend a very
considerable sum of taxpayers’ money. You do it by determining your own priorities. Having determined their
own priorities, one would have thought that they would have had an ongoing ability to do that. They have
indicated to us in recent times that these channels were funded from a series of one-off cuts. But, as I
understand it, the department has sought additional information from the ABC in relation to those matters in
order to assess them but that information has not yet been provided.

So the starting point is that, if the ABC have a very significant sum of taxpayers’ funds over which they
have entire discretion, it is a matter for them as to how they allocate those funds. If they regard digital as very
important then, by definition, that means that other things may be less important. I think we are all used to the
ABC saying that they do not have a spare cent, that they are pared to the bone, that there is never any
opportunity for efficiency savings, but if the ABC think that they do need to source more funds from
somewhere then you would have thought the appropriate approach would be for the board to have—

Senator CONROY — You keep raising this question of ‘other sources of funding’. Where would they be?
What suggestions do you have?

Senator Alston — What they have said is they sourced the original channels from a number of areas which
were on a one-off basis. If they now believe that they need to find more funds from somewhere in order to
maintain digital channelling, multichannelling, then I would have thought the appropriate course would have
been for the board to have embarked upon an examination of their options, rather than simply deciding to cut
these channels.

Senator CONROY — You are the champion of multichannelling and digital. This has a high priority that
you have given it personally.

Senator Alston — It is not a manner of me personally—

Senator CONROY — You are the minister in charge of it.

Senator Alston — The government have a view on the future of digital television, and as a result we have
provided very significant additional funding to the ABC, enabling them to get into a digital environment. That,
combined with the legislative capacity to multichannel, presumably led to the ABC making their own decision
to go down this path. They did that when they had effectively the same level of funds that they have now. So
to turn around now and say, ‘We no longer have the funds,’ is saying, ‘We have chosen to put other things as
higher priorities than digital television,’ which is not the position they took when they went down this path in
the first instance…

Senator CONROY — So it is Mr Balding’s fault—is that what you are saying?

Senator Alston — No, I am just saying that Mr Balding was intimately involved in these decisions. He
knows where the moneys came from.

Senator CONROY — We will go to Mr Balding in just a second.

Senator Alston — I am saying that from the government’s point of view we were not approached back in
2001 on the basis that ‘We would like to launch these channels but we haven’t got the money.’ We were not
asked: ‘If we do launch than, will you give us a commitment now or later?’ They simply did it. I can
understand them doing it and I commend them for doing it, because they presumably took the view, which we
take, that the world is inevitably going digital and the sooner you get in there, the better. If this is an
opportunity for the ABC to differentiate their product from the commercials, who are not allowed to
multichannel, then good luck to them. The SBS took the same view. In other words, they have taken a firstmover
advantage. They saw this as a high priority and they were prepared, without even discussing it with the
government, to find the money to fund it. But they have not done this this time around.

Senator CONROY — You are saying that they should not have done this; therefore, they should have done
something else.

Senator Alston — No, what I am saying to you is that around 18 months ago they had the ability to do that,
and they did. They went away and they said, ‘We want to do this—we want to launch two channels. Find a
way of doing it.’ Mr Balding now says, ‘We found a series of one-off cuts in order to fund it.’ That is perfectly
appropriate. That is what we say you have the capacity to do when you have a very significant budget over
which you claim you have total discretion. I am saying that, if you had the ability to do that then, you have the
ability to do that now…

Senator CONROY — Should they dump Play School?

Senator Alston — Hang on—business say, ‘This is what we’ve got available. We have to decide what we
do: do we go offshore, do we stay domestic, do we expand, do we outsource?’ There is a whole raft of
decisions that have to be made when you are operating in a commercial environment.

Senator CONROY — What should they cut then? Nominate something…

Senator Alston — I do not respond to non-requests. If the ABC had come to us and said, ‘We cannot
multichannel without additional funding,’ then we would have had a request in front of us, which would have
meant that we would have had to decide, effectively, whether they got into the business. They did not do that.
No doubt they said to themselves: ‘We are allowed to multichannel. The commercials aren’t. This is a big
opportunity for us; this is a high priority. We will therefore find a way of making it happen,’ and they sent
someone away to find a way of doing it. We are now told that this was through a series of one-off cuts. All
right? …

Senator MACKAY — You are saying, ‘Don’t blame me, I’m only the minister.’

Senator Alston — I am just explaining the facts to you. You can put your political spin on it…

Senator MACKAY — Mr Balding, what is your attitude towards what the minister is saying?
Mr Balding — I would like to clarify a couple of matters for the record. I did allude to our 2000-03 triennial
funding request to government, which did ask for digital content that was for the multichannels. Back as early
as September last year, when I addressed the Melbourne Press Club, I think I made it fairly clear that the
continuation of ABC programs and services was under threat, notwithstanding the multichannels being one of
those initiatives, as the senator has outlined. Furthermore, in response to a question from Senator Lundy at the
November supplementary estimates hearing, I made it very clear then that the multichannels had been
provided from one-off sources of funding and that there was no currently identified ongoing source of funding
to maintain those channels beyond the end of the financial year. On page 4 of the summary of our triennial
funding submission, which was made public, I made it very clear that if we did not receive funding for
multichannels they would be under threat. I quote from the summary:

The ABC multichannels, ABC Kids and FLY, were established in 2001 to demonstrate the new programming and
delivery models made possible by the transition to digital television. In demonstrating the concept, the multichannels
reflected ABC commitment to leadership and innovation in the emerging digital environment. However, they have also
been funded on a non-recurrent basis and cannot be sustained without a new on-going source of funds…

Senator CONROY — I will move on. Mr Balding, the ABC made a bid for enhanced regional radio
broadcasting of radio services like NewsRadio, Triple J and Classic FM in around 60 regional communities
from Cairns to Burnie, Port Lincoln to Lithgow, Ballarat to Bairnsdale, and Alice Springs to Kalgoorlie and
Broome. Given that the government rejected this bid, what chances do those regional centres now have of
getting these additional radio services which are enjoyed by Australians in major cities?

Mr Balding — Our triennial funding submission was all about opportunities. It was an opportunity to
accelerate the take-up of digital, and we have discussed that foregone opportunity. It was also an opportunity
to increase Australian content on television and to assist the Australian television industry. That opportunity
has been foregone. It was also an opportunity to extend the reach of NewsRadio and Triple J to population
centres greater than 10,000 and address what I believe is the current inequity of access to ABC programs and
services. I believe this initiative was supported by this committee. Unfortunately, the ABC will not be in a
position to implement those initiatives. We will have to shelve plans to extend those services to regional
Australia—and that is covering some 59 regional communities for NewsRadio and 16 regional communities
for Triple J.

I would like to say I don’t give up. I have already commenced preparation of a budget submission for the
next financial year. I view the triennial funding outcome as a minimum level of funding for the ABC over the
next three years. If cabvarchar(15) decide to look at other issues in respect of the ABC prior to next year’s budget, the
ABC will be in a position to respond and will be able to provide any required information to cabvarchar(15) along
those lines…

Senator MACKAY — Are you prepared to countenance revisiting the ABC’s budget over the course of the
next financial year?

Senator Alston — Triennial funding is given on the basis that that is the amount of funding the ABC needs
to continue to maintain its activities.

Senator MACKAY — Is the answer no?

Senator Alston — If it decides that it has other priorities, it has an ability during that triennial period to
reallocate resources to some areas and to cut them back from other areas. They have always had the ability to
do that. They continue to do that.

Senator MACKAY — From the government’s perspective, are you ruling out revisiting the issue of ABC
funding during the triennium?

Senator Alston—I have said to you for the record that on a one-off basis we have given them $72 odd million.

Senator MACKAY — So you could revisit it? Is that right?

Senator Alston — That demonstrates that where there are resources it is possible. You can smirk and scorn
as much as you like, but the fact is that there are a lot of very serious additional commitments in this budget
that made it very difficult—and the ABC knew that. The ABC knew that it was whistling in the wind from the
outset because you had commitments to Iraq, ongoing commitments to East Timor, the drought—all sorts of
areas—that made life very difficult for people seeking additional funds. Like a number of other claimants, the
ABC put in a wish list, but it knew that it was not the best of years. Given that we have a good track record of
enabling the roll-out of new services, I think it understood that very well.

Senator CONROY — I refer to the national interest initiative program which loses funding in the last year
of the triennium 2005-06. What are the implications for the 10,000 hours of regional programming and 50 or
more regional jobs that are associated with that programming? Will this programming and these jobs have to
be axed?

Mr Balding — You are right, the funding for that runs out in the last year of the triennium. We are
disappointed the government has chosen not to renew the national interest initiative funding as part of this
year’s budget. In the event that that funding is not renewed, all those initiatives provided from the program
would be under extreme pressure.

Those initiatives include 50 new full-time equivalent positions producing
10,000 additional hours per year of radio programs in regional Australia; two new regional radio stations about
to be opened up—one in Ballarat in Victoria and one in Wagin in Western Australia; a regional radio
production fund, which was set up to showcase regional talent, the strength of and external content from
regional Australia; and also the reintroduction of weekend television news services in the ACT and in the
Northern Territory. We have two years left of that funding source. Until we revisit that, those programs and
issues will continue.

Senator CONROY — You made a bid for local television services in North Queensland, to be based in
Townsville?

Mr Balding — Correct.

Senator CONROY — What chance does this service have of proceeding now that the government has
rejected the funding?

Mr Balding — This is another opportunity that has been put aside. We would not be in position to proceed
with that. We were looking to use that as the basis for the initial roll-out of a greater regional television
presence throughout Australia. We saw Far North Queensland as an opportunity due to a number of factors.
First of all, we have television studio facilities there that have not been used for quite some time—effectively,
that studio up in Townsville was put in mothballs. We saw it as an opportunity to upgrade that facility and use
it to roll out a regional television news service. Second, it was due to the withdrawal of the commercial
television news service from regional Australia…

Senator LUNDY — Can you rule out cuts for ABC Online?

Mr Balding — No. I am sorry, I am not in a position to rule out cuts, other than in respect of those programs
and initiatives funded under the national interest funding…

Senator SANTORO — In relation to the programs mentioned here this morning, particularly in your answer
to the opening question from Senator Conroy, am I correct in saying that the Kids and Fly digital channels are
basically projects that were funded by what could be described as ‘slack and fat’ in the budget over the last
couple of years?

Mr Balding — No, Senator, I would not describe it that way. The ABC’s budget is not slack and it is not fat.
We were able to identify what we called a ‘one-off’ source of funding—that is, funding that is made available
only in one particular year or in two particular years. It is not ongoing funding. We chose to apply that to those
initiatives. I would definitely not describe the ABC’s budget as fat or slack.

Senator SANTORO — By that I obviously meant, as the minister has been suggesting in some of his
answers to questions from the opposition, that the ABC is indeed very capable of coming up with savings. I
refer particularly to your triennial submission where it openly states:
Through continuing efficiency improvements since 1996-97, the ABC reduced Corporate support costs from 13% to 8%
of total costs.
I commend the ABC on that, and so when I refer to ‘slack and fat’ it is not meant to be in any way an insulting
or condescending description. They are achieved obviously as a result of good management effort. But you
just answered the question by saying that it is was a one-off savings or funding source. If that is the case do
you regard it as responsible for the ABC to use what are one-offs under expenditures, or indeed savings or
efficiencies achieved through some good management action, to fund projects such as Kids and Fly when in
fact there is no guarantee of ongoing funding for these projects? Do you think it is responsible to do that?

Mr Balding—It was done on the basis that this was a new technology, a new initiative. As the minister
outlined, the parliament set up the necessary legislative framework to enable the ABC to multichannel. The
ABC chose at the time to identify that one-off source of funds as a proof of concept to demonstrate the
benefits, to demonstrate the new programs and services, that could be available through this new digital
technology. The ABC was also keen to assist with the acceleration of the take-up of digital. It was always done
on the basis that it was a one-off source of funding only and that if we could not secure additional funding
from government then the ABC board would have to have a very hard look at the continuation of those
services in the very short term. Since I have been managing director I have made that very clear publicly on a
number of occasions.

Senator SANTORO — In commending you for undertaking new initiatives and programs, and projects such
as Kids and Fly digitals, do you think it is fair for the government to be blamed, as has been suggested this
morning, for a decision which was made by the board to not give that program priority by, for example,
seeking new savings through new efficiencies? Do you think it is fair for the government to be blamed, as has
been the case this morning, for a decision which was made by the board on Thursday—as I understand from
what has been said this morning—of which the minister was made aware some time after that?

Mr Balding — The board has a number of other difficult decisions to make. Unfortunately, it does not stop
here with this decision, but I reiterate that the board, in its triennial funding submission to government, made it
very clear that, without additional funding, these channels could not be sustained.

Senator SANTORO — But they are basically decisions that have been made by the ABC board independent
of government.

Mr Balding — Correct…

Senator SANTORO — Mr Balding, I want to ask you a few specific questions and you may want to take
these on notice. How many staff at the ABC are currently paid $100,000 or more per year? Also, how many
staff at the ABC were paid $75,000 or more per year in 1996?

Mr Balding — I will take that on notice.

Senator SANTORO — In addition, how many journalistic staff at the ABC are currently paid $75,000 or
more per year, and how many journalistic staff at the ABC were paid $50,000 or more in 1996?

Mr Balding — I will take that on notice.

Senator SANTORO — I now want to ask specific questions in relation to a particular presenter at the ABC.
Is it true that Indira Naidoo, the presenter of the occasional five to 10-minute ABC TV program Feedback, is
paid a salary of more than $250,000—$256,000 to be exact? With mandatory built-in salary on-costs, this
would be a cost to the ABC of more than $300,000. Is that right?

Mr Balding — I will take that on notice.

Senator SANTORO — Is it also true that each week you fly Ms Naidoo from Sydney to Adelaide to record
the program in Adelaide? What does that cost? Is it business class travel? And what other costs are incurred to
enable Ms Naidoo to present the program?

Mr Balding — I will take that on notice…

Senator CHERRY — I understand that the special initiatives funding, which you have discussed with
Senator Santoro, runs out in two years. Could you explain what the impact of having a cut-off date in two
years time will have on your trying to run those initiatives?

Mr Balding — A similar question was asked, and I attempted to address it. The ABC would need some
advance notice if that program were not to be renewed, because it has significant employment implications
where you need to identify the wind-down costs, and if there are any exiting costs or redundancy costs we
would need to factor them into considerations prior to the cessation of the actual funding itself. We will be
putting a submission to government again in respect of seeking the renewal of that, but we need advice before
midnight on 30 June of the funding year in which it ceases.

Senator CHERRY — How many staff have been employed under that initiative funding?

Mr Balding — I do not know the precise number, but with one particular initiative there were 50 new
program makers. In respect of regional radio, there are other initiatives that have staffing implications. The
new Business Breakfast program, which comes out on television five mornings a week, has, obviously, staff
implications.

Senator CHERRY — Does your budget include worst-case contingency funding for redundancies for those
programs being closed down in two years?

Mr Balding — We have put an amount of funds aside, notional at this stage. If we were given advance
notice that the program was not to continue, I would fund any exit cost out of the national initiatives program…

Other questions at the Estimates included:

· Why an incorrect claim on the Four Corners program on April 15, 2002, that electric cattle prods were used in detention centres, was not rectified;

· Why the ABC did not refer to the Australia Institute as “left-wing” but always called the Institute of Public Affairs a “right-wing think-tank”.

The full transcript of the Senate Estimates Hearing can be found at the link below.