Funding cuts to the ABC play perfectly into the hands of the national broadcaster’s management. By Mike Seccombe.

What Mark Scott is really doing with the ABC cuts

ABC managing director Mark Scott in Melbourne this week.
ABC managing director Mark Scott in Melbourne this week.

It’s probably no comfort to the 400 ABC staff who have lost or will soon lose their jobs, but things could have been worse.

Thanks to the lobbying efforts of ABC managing director Mark Scott and the receptiveness of Communications Minister Malcolm Turnbull, the national broadcaster has bought itself two years before things get really ugly, funding-wise.

At least that’s the way the ABC boss and his people are telling the story.

Says Scott: “The original plan that came out of ERC [the Expenditure Review Committee] had funding cuts hitting significantly this financial year and next financial year. And I warned the government that dramatic cuts this and next year would have had an even more immediate impact on content.”

And so last Wednesday when Turnbull announced a $254 million funding reduction over five years, beginning next July, on top of the $47 million “efficiency saving” imposed in the budget in May, he did the organisation one small favour.

He back-end loaded the cuts. Thus there will be no extra cut this financial year, with a $20 million cut in 2015-16, rising to $61 million in 2016-17; $55 million in 2017-18 and $68 million in 2018-19.

That made life just a little easier. For the ABC will have to make redundancy payments to all those people it must dispense with. The slow burn cuts at least give it a bit more financial room to come up with the money.

But it’s still a big whack, especially if you add in the government’s other budget decision, to cancel the ABC’s contract to provide news overseas through the Australia Network. That contract was worth about $220 million over 10 years. Its cancellation cost about 80 jobs.

Turnbull insists the cuts, excluding the Australia Network, average out to about 5 per cent a year over the five years.

“But it really builds up to be 8 or 9 per cent in those outer years,” says Scott.

1 . Why cut programs?

The government insists, on the basis of a review it commissioned from Peter Lewis, the former chief financial officer of one of the ABC’s commercial competitors, Seven West Media, that all those savings can be made through efficiencies and “back-office” savings. They insist the cuts, swingeing as they are, should not affect content.

So why, then, do we find the network chopping the budget of its flagship current affairs program, Four Corners? Why is the ABC’s Adelaide TV production studio to close? Why are overseas bureaus to be cut, restructured and in some cases closed? Why are the state-based 7.30 programs all over the country to be axed? Why are a handful of regional radio posts to be closed, the Foreign Correspondent program to be radically cut, local sports coverage scrapped, and numerous other radio and television programs to be chopped or, like Lateline, moved? Why, above all, are some 100 journalists, including some of the nation’s finest, being let go?

There are two reasons.

First, because things are nowhere near as simple as the government claims. In many cases efficiency measures inevitably damage content. For example, when the ABC flogs off its outside broadcast vans, it makes local sports coverage impossible. A structural efficiency measure equals a loss of content.

Second, because Mark Scott has used the opportunity to apply the dictum of Winston Churchill: Never let a good crisis go to waste.

“We’re going to try to find those [government mandated] savings through efficiencies and back-office savings,”
he says. “Separate to all that, we’re trying to save $20 million on content, and to reinvest that in online and mobile [services].”

And it is his determination to use the cover provided by the government cuts to affect changes he wanted to pursue anyway that has infuriated many in government, the broadcaster’s ideological enemies and commercial competitors.

2 . Abbott's broken promise

And what brilliant cover the government, particularly Prime Minister Tony Abbott, has provided. By his actions, Abbott has managed to turn a negative story about cuts to Australia’s most-trusted institution into a far more negative one about his integrity.

For more than a week, when the government might have been making the case for the necessity of budget austerity, given its straitened fiscal circumstances, most attention focused on whether Abbott was or was not a liar.

Even by the standards of this crisis-prone government it was a spectacular failure of tactics.

In a now-famous interview on SBS on the night before last year’s election, Abbott promised that, if he won, there would be “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS”.

And while the SBS interview has been the most-quoted of Abbott’s public promises not to cut the ABC, it was far from the only one. He used similar words on a number of other occasions, both before and after the election. The SBS promise was probably the most succinct, but it was certainly no one-off example of Abbott misspeaking.

Let’s leave aside the other areas in which Abbott also promised there would be no cuts, several of which are also questionable, to say the least.

His promise on the ABC was categorical, and it was broken. Not once but twice.

It was broken first in the May budget, when the ABC had $47 million lopped from it, and SBS lost $10.5 million, by way of those “efficiency savings” mentioned above.

Indeed, Treasurer Joe Hockey freely admitted this was a broken promise when he appeared on a post-budget episode of the ABC’s Q&A.

Hockey argued the government had not cut health, education or pensions, but “in relation to the ABC, I plead... plead guilty.

“…I’ve asked them to take a 1 per cent cut in the year ahead because, frankly, I couldn’t ask every other area of government to take a cut and the ABC not to,” said Hockey.

The promise was broken a second time last week when Turnbull announced the second, much larger round of cuts: $14.7 million for SBS and $207 million for the ABC.

But Abbott was not prepared to do as his treasurer had done six months earlier and confess. For a week after the announcement of the cuts he simply dug in and refused to admit any promise had been broken.

As the days rolled by, his refusal to acknowledge reality became increasingly farcical, as did the efforts of his colleagues to explain away Abbott’s prevarication.

3 . Turnbull's dissembling

It is hard not to feel sympathy for Turnbull, for example, as he attempted to support his leader in an appearance on ABC’s 7.30 last week.

Usually the most urbane and articulate of parliamentarians, Turnbull was reduced to semi-coherence.

He maintained – incorrectly – that Abbott had made the commitment only “in one interview, I think the night before the election.

“But Joe Hockey and I had made it very clear on a number of ABC programs in fact that we-... that if there were going to be cuts across the board, as plainly there would have to be, across the board of government … then the ABC and SBS couldn’t be exempt.”

The interviewer, Leigh Sales, persisted: “…they [voters] shouldn’t have taken ‘no cuts’ as ‘no cuts’, they should have been parsing Mr Abbott’s comments and Mr Hockey’s comments and your comments to try to figure out exactly what that meant?”

“Well…” stammered Turnbull. “Well, look, you know, I mean, I’ve defended the prime minister on this today and earlier in the week. I think you’ve got to take his comments, which, look, I mean, what he said, he said, and, you know, it’s there, it’s on the record. But you’ve got to take that in context.”

That context apparently being that the government always intended to slash ABC funding.

And that, in the eyes of many in the media and the parliament, made the ABC cuts something more than just a broken promise.

A broken promise is not necessarily the same thing as a lie. Sometimes circumstances conspire to make a promise undeliverable, even though it was sincerely made.

For example, the previous Labor government made repeated promises to balance the budget, but repeatedly broke them because their revenue estimates proved to be way over optimistic. No doubt, though, they fervently wished they could have kept the promise.

Likewise, the current government promised a balanced budget in its first term. It now seems highly probable that promise will be broken, too, because revenues are still falling and because the government cannot get a lot of its proposed spending cuts through the senate. If it fails to balance the budget as promised, that will not mean the commitment was a lie.

But when a promise is made in the foreknowledge that it will be broken, then it becomes a lie.

Under questioning in parliament on Monday, Abbott avoided even acknowledging he had spoken the words in the SBS election-eve interview. He ducked and weaved, saying his government had “fundamentally kept faith with the Australian people”.

He said the government was simply applying to the ABC the same kind of “efficiency dividend” as it applied to other parts of the public sector.

That was not true either, as Turnbull subsequently admitted. The first funding cut, made at budget time, was an efficiency dividend.

The second, much larger cut was not. It was a matter of special treatment, in the negative sense, for Australia’s public broadcasters.

As the days rolled on, Abbott’s position looked increasingly indefensible, even to his own troops. Some began speaking openly about it. He came under pressure in the party room to stop denying the obvious.

And Abbott did finally concede he regretted his words to SBS. Too little, too late.

4 . Ideological background

There is a deep context to Abbott’s stubbornness. A substantial slice of the Liberal Party has always been unsympathetic to the ABC. Some object on the philosophical basis that government has no place owning media.

Many more are hostile for political reasons. In the neat summation of John Howard’s former chief-of-staff Grahame Morris, they see it as “our enemies talking to our friends”.

For decades conservative governments have tried to muzzle the ABC. They have cut funding, tried to stack the board and deluged management with complaints. Howard’s former communications minister Richard Alston was exceptional on the complaints front. Howard ultimately replaced him after it was realised the tactic was becoming counterproductive.

The problem is, most of the Australian public does not share the view that the ABC is biased against conservatives and even those who do detect a progressive bias still regard the institution highly. Depending on which opinion survey you look at, 80-85 per cent of people view it favourably.

Attitudes to the national broadcaster have always been a point of tension within conservative governments, too. Rural members, particularly Nationals, tend to be particularly sensitive because their constituents have limited sources of vital news and entertainment.

Commercial media operators also are inclined to resent their taxpayer-funded competitor.

The most strident of all is the Murdoch media empire. In its case, commercial and ideological opposition are tightly interwoven. It is the most persistent purveyor of commentary accusing the ABC of left-wing bias, which some might consider a bit rich given its own rather more apparent right-wing bias. At the 2013 federal election the Murdoch press ran a concerted campaign in support of the Abbott Coalition.

Abbott owes the Murdoch press, and it wants the ABC radically cut.

As for the Murdochs’ commercial opposition to public broadcasting, it goes way back to the 1930s when Rupert’s father, Sir Keith, used his considerable influence with the conservative Lyons government to nobble the new national broadcaster’s plans to set up its own news service.

In recent years the Murdoch media has been particularly exercised by the ABC’s move into online and mobile platforms for its content.

The reason would seem obvious. As print declines, publishers are keen to get people to pay for online content. They are naturally opposed to public broadcasters who deliver online news and entertainment free.

All these factors help explain why Tony Abbott is keen to slash the ABC, and equally keen to deny malicious intent.

And they help explain, too, why Mark Scott is dispensing with 100 journalists and sacrificing some content to help save $20 million for reinvestment in new technology.

“I have a view and the board has a view that if we do not invest in mobile and online we weaken the organisation in the medium and long term,” he says.

“[There are] those who argue we shouldn’t be in online, like some of our competitors deliberately do have a strategy that they want the ABC to be smaller, less relevant, less compelling and they want us to be weaker over time.

“And can I say I think the public would vehemently reject that.

“There is great support for iview, great support for our apps, news online through television and through streaming is getting nearly four million viewers a week. Twenty million plays a week on iview,” he says.

“The public has embraced the ABC’s digital services more than any other broadcaster and probably more than any other media outlet in the country.

“The public has decided they want the ABC to be online and mobile. And we cannot retreat,” says Scott.

It’s fair to say, on the basis of numerous conversations with ABC staff over recent days, that they overwhelmingly endorse Scott’s goal. But that is not to say they approve of his methods or that they are not concerned about the consequences for quality.

5 . Sackings

A lot of experience is going out the door. The evidence suggests Scott and his management team are moving to replace older, more expensive people with younger and cheaper ones.

And they are doing it in a way that is causing enormous resentment. Some staff whose jobs have disappeared are simply being tapped on the shoulder and told it’s time to go.

But most will have to compete in “pools” with others of similar seniority to hold onto their jobs. Staff are calling it the “Hunger Games” model.

In NSW, for example, six of 25 senior reporter positions will go. Those senior reporters will have to make the case to a selection panel as to why their personal “skill set” makes them of continued value to the organisation.

By way of contrast, only one of 11 junior reporter positions is being abolished.

It’s the same story with current affairs. Six of 33 senior positions are being cut, but just two of 22 juniors.

All up, says Scott, about 100 will be made redundant. In regard to the apparent skewing of the redundancies in favour of cheaper talent, he argues that 70-odd new people will be hired and many of them will be senior.

Another point of major contention with staff and their relevant unions is that no voluntary redundancies are being offered.

The clear implication is that the pool selection process is a farce, and that management already knows in most cases who they want to keep and who they want to let go.

“It’s about cutting the dead wood,” says one senior executive, frankly.

Scott, who is fluent in management-speak, puts it less bluntly.

“We have looked at what’s happened elsewhere in the media sector, we have consulted with big broadcasters around the world like CBC and the BBC, who have run voluntary redundancy schemes. If you simply let everyone go who wants to go, often you do not end up with a team remaining with the skill set you need.”

Furthermore, says Scott, his previous experience as an executive at Fairfax Media has taught that voluntary redundancies can also cause resentment if people apply and are not granted them.

The method of selection looks like being a continuing point of contention.

“We think they’re trying to impose a system which is contrary to the agreement. We’re getting advice,” says Christopher Warren, federal secretary of the journalists’ union, the Media Entertainment and Arts Alliance.

“It’s designed as a way individual managers can pick and choose who they want to keep.

“People are very upset about it. Even those who won’t lose their jobs.”

6 . Quality concerns

Then there are concerns about quality, perhaps most trenchantly expressed by Quentin Dempster, a former staff-elected director of the ABC, and the presenter of the NSW state edition of 7.30, which has been scrapped.

Dempster has written of his concerns that the restructuring planned by Scott to strengthen the ABC’s digital presence would “come at the expense of quality TV and radio programs and services”.

The changes, he said, were making the ABC more Sydney-centric, and that the loss of localism in programs such as his “leaves state politics, education, health, law, order, multi-party corruption and administration unexamined in that more influential format.

“The reduction in local radio news bulletins from 10 minutes to five will leave our audiences with hardly anything more than the headlines.”

He expressed concern that the more intelligent and specialised programming would suffer while more resources went out into “reactive coverage in a 24-hour news cycle”.

He called it “churnalism”.

Others share similar concerns. One board member, epidemiologist Fiona Stanley, also says she is concerned about
a potential dumbing down of content.

She notes that the board had pushed back against plans for more radical cuts to Radio National and other areas she described as “unapologetically elite”.

“I’m still unhappy about some of those decisions, and I’ll continue to talk about it,” Stanley says. “We will have another board meeting next week, and
I will take some of these issues up then.” She would not elaborate further.

The current staff-elected director and board member, Matt Peacock, who also will have to reapply for his position, was more graphic as he described the awkwardness of having to “march off of our little pool to sell our wares”.

“It’s bizarre and it’s unpleasant,” he says. “I’m fully behind Scott on that and so is the board. We’ve got to put more money into new platforms.

“But it’s still awful. It’s one in 10 jobs. That’s hard for any place and I think it’s been made massively harder because staff have been dangling in the breeze for the better part of a year.

“Really, it’s a bloodbath.”

This article was first published in the print edition of The Saturday Paper on November 29, 2014 as "What Mark Scott is really doing".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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