Malcolm Turnbull confirms ABC and SBS cuts to total $308m over five years

Malcolm Turnbull Communications Minister Malcolm Turnbull has revealed the extent of funding cuts to the ABC and SBS, telling a forum in Adelaide this lunchtime “the SBS and ABC will emerge from this process much stronger”.

Both organisations will lose a combined $308m over the next five years, with SBS contributing $53.7m of that, and the ABC the rest, but Turnbull insisted the government will not “direct the organisations on operational matters” and allow them to decide where to make the cuts.

The cuts to the ABC are in line with those flagged by Media Watch host Paul Barry on Monday night’s show, which he said would lead to between 4-500 job losses and closure of some operations. Yesterday Education Minister Christopher Pyne started a petition to save a production unit in South Australia threatened with closure.

SBS managing director Michael Ebeid said the cuts “whilst anticipated, is sizeable and will naturally be felt by our organisation”, while ABC managing director Mark Scott warned it would “impact on the kinds of content we can make and offer”.

The SBS will get $287m in funding in 2014-15, 75 per cent of its total funding, with the organisation tasked to raise revenues through advertising, with Turnbull saying the governmemt will allow it to reallocate its limit of 120 minutes of advertising per day, with a maximum of 10 minutes per hour rather than five minutes per hour, allowing it to make more cash from primetime programming.

Ebeid said the changes would allow it to “earn back in the order of $20-30 million of the Government’s funding cuts over five years through additional advertising revenue.”

Speaking today Turnbull said: “A commercial network’s KPIs are its profitability. The ABC’s KPIs set out by its charter are much more subjective.All this makes it much harder to run the public broadcaster. There simply isn’t the relentless need to innovate and cut costs as there are at the private sector.”

But he did acknowledge both ABC and SBS have been “leaders” in innovation, with SBS a “master at doing more with less”, adding “with the right leadership the SBS and ABC will emerge from this process much stronger.”

Turnbull said both organisations should be “as transparent as a public listed company” to avoid suspicion of political bias, arguing the ABC’s role of editor-in-chief should be separated from the role of managing director, currently held by Mark Scott.

He also said the “promise” from Tony Abbott on the eve of last year’s election he would not cut the broadcasters should be taken in the context of his pledge prior not to savagely cut the organisations.

In a statement Ebeid said: “In an environment where public broadcasting is under pressure and SBS is operating in a highly competitive media market, the ability to generate more of our own revenue helps us to secure the future sustainability of the organisation, without compromising our content.

“The Charter is at the heart of our organisation and the content we commission. I am confident and committed that should this legislation pass Parliament, SBS would only implement additional advertising in programs and timeslots where the advertising return could genuinely aid our ability to invest in more Australian content.

“SBS continuously and aggressively pursues efficiencies to reinvest in underfunded activities such as digital services and local Australian content. To that end, as part of our ongoing program identifying efficiencies, we were already and are, implementing back-of-house measures which will largely help to absorb this funding cut, net of additional revenues. ”

ABC boss Scott said the cuts will rise progressively from $20m in 2015/16 to $68m in 2018/19. And he warned that content could suffer.

“The funding cuts ramp up over time, as the Government has allocated no funding for the cost of inevitable redundancies, which will need to be covered by the ABC from its current allocation and asset base,” he said.

“The ABC is planning its cost-saving measures on this schedule. The 5 per cent cut, which begins to apply from next year,  comes on top of a 3 per cent reduction in funding through the termination of the Australia Network work contract and the efficiency cut imposed in the May budget. As the cuts ramp up, the ABC faces an 8 per cent annual cut.

As I have stated previously, in its response to funding cuts the ABC will seek to serve audiences and protect content wherever possible. As we have in the past, we will look to find efficiencies in our operations and support services.

“I note, however, that there are clear examples in the efficiency report commissioned by the Department of Communications which would impact on the kinds of content we can make and offer.”

Scott said the ABC Executive will finalise the steps needed to make the savings required over the next few days.

“Ultimately, decisions regarding how the funding is allocated, the shape of the services the ABC delivers, and how the ABC is managed and organised, rest with the independent ABC Board,” he added.

Alex Hayes


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