Turnbull confirms broadcaster cuts, urges management change

By Jason Whittaker

November 19, 2014

Malcolm Turnbull will urge the ABC board to strip managing director Mark Scott of his self-imposed role as “editor-in-chief”, as he announced the budget cuts to both public broadcasters.

The Communications Minister confirmed the ABC budget will be slashed by $254 million over the next four years — or 2.6% of its $5.5 billion budget — while SBS will lose $25.2 million (1.7%) over the period.

Total savings to the budget — including the 1% “downpayment” already applied to the ABC — will amount to $308 million over the five years.

This figure includes additional advertising revenue from SBS — the government expects it will generate another $28.5 million over the period by allowing it to run more ads across the day, in a legislative change that will go before Parliament amid strong opposition from commercial networks.

Budget cuts detailed in Malcolm Turnbull's statement
Budget cuts detailed in Malcolm Turnbull’s statement

The broadcasters must now decide how they will make the savings; the ABC is expected to make announcements next week. Turnbull said in a speech this afternoon blaming the government for any programming changes would be “cowardly” as efficiencies can be found in back-office functions as identified in Peter Lewis’ efficiency report earlier this year.

“The ABC management know that they can meet these savings without reducing the resources available to programming — furthermore they know that the government and their board know too,” he said.

In a surprise announcement, Turnbull revealed he would also use a legislative right to offer “formal advice on operational and financial matters” to both boards. Turnbull will ask for:

  • An editor-in-chief to be appointed at the ABC, separate from the managing director and answering directly to the board;
  • An independent chief financial officer appointed, with responsibility for the resources and cost base of the ABC;
  • More transparency on budgets relating to charter obligations, “providing more granular detail”;
  • More co-operation between the ABC and SBS to maximise efficiency; and
  • The boards to set out each year steps taken to meet statutory obligations on ensuring accurate and impartial journalism standards.

“The government does not and should never have any control over the news and current affairs of the ABC or SBS. Mr [Russian President Vladimir] Putin’s model of media management is no more admirable than his foreign policy,” Turnbull said. “But their boards are responsible for their objectivity and accuracy. I have on occasions heard directors say ‘they do not want to get involved’. Well if they do not want to get involved they should resign.”

In a nod to long-time critics of the ABC’s editorial decisions, including from within his own party room, Turnbull says Scott doesn’t have the time to manage the ABC’s news content day-to-day and shouldn’t have the editor-in-chief title.

“It creates the impression that the managing director is directly in charge of ABC news and current affairs which he is not, and given the wide range of his responsibilities, could not be,” he said.

“The board should expect the head of news and current affairs, like the CFO, to report directly to the board as well as to the managing director thus enabling the board to discharge its statutory obligation referred to below.”

The CFO role is currently filled by chief operating officer David Pendleton. Turnbull says the ABC “should have a qualified CFO who reports directly to the board as well as the CEO and is fearlessly independent, ensuring that the management and board understand precisely where and how funds are being spent and what everything costs”.

“This advice must be considered by the boards but can, of course, be ignored,” he said of his recommendations. “Importantly it would be a very transparent way of providing advice to the broadcasters on matters that do not affect their independence.”

Turnbull said Prime Minister Tony Abbott’s pre-election pledge of “no cuts to the ABC and SBS” needs to be “understood in context”.

“Prior to the election many people, including competing media groups, urged the Coalition to take an axe to the ABC in order to curtail their on-air and online activities. Both [Treasurer] Joe Hockey and I made it quite clear we had no plans to make cuts of that nature at the public broadcasters — but if there were to be savings made across the board, the ABC and SBS could not expect to be exempt from the obligation to contribute by eliminating waste and inefficiencies.

“Unless you believe that Mr Abbott was, in that one line, intending to contradict and over rule the very careful statements of intention made by Mr Hockey and myself, his remarks can only be understood in the same context, which left open savings of a kind which would not diminish the effective resources the ABC and SBS had available to produce content.”

The cuts were immediately criticised by supporters of the broadcaster and the opposition. Labor leader Bill Shorten said Turnbull had “declared war” on the ABC and SBS.

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