News

As yet another funding fight looms for the national broadcaster, the government has appointed three new members to the ABC board. By Rick Morton.

Is a former Murdoch executive the ABC’s next best hope?

Ita Buttrose, the ABC’s chair, addresses the National Press Club.
Credit: AAP / Lukas Coch

Ita Buttrose is not one to shrink from an argument.

On May 5, the chair of the Australian Broadcasting Corporation appeared for the second time this year at the National Press Club in Canberra – this time speaking on the subject of eye health and an ageing Australian population – and she performed with charming distinction.

Then, however, came the questions about the national broadcaster from the many journalists in the room. Specifically, where are the promised new board directors? Will the ABC’s funding be cut again by the government? Should it become a commercial operation? Would she comment on the Four Corners defamation case?

After demurring more than once, and only dropping hints at her personal frustration about the existential affairs ring-fencing the ABC, Buttrose gave the audience what it clearly wanted: some fight.

“The role of a public broadcaster in all countries is one that is very essential to democracy,” she said.

“In those countries that do not have a securely funded national broadcaster, democracy is not as robust as it is in Australia. And, you know, countries that do not have a well-funded public broadcaster often have examples of right-wing extremism as we saw in America when the mob stormed the Capitol.

“And what country in the world puts the least money into public broadcasting? The United States of America.”

The answer garnered her biggest applause of the day.

On the subject of board appointments, Buttrose said she was “concerned” that delays from government meant she could only just form a quorum after Vanessa Guthrie resigned part-way through her term in March this year.

The situation was only made more tenuous when one of the few remaining board members was attacked by a cow.

“I had no idea cows were so, so awful… she had terrible leg injuries,” Buttrose told the press club. “She’s back, she [the board member] is in full health, but you know, unexpected things can happen.”

On Monday this week, the federal minister for Communications, Paul Fletcher, announced the government’s appointments to the three vacant positions on the ABC board.

Of the new appointees, two are familiar names in the media, both recommended by the independent selection panel for the ABC board that was first established under the Rudd government.

These are former Channel Seven executive and current Australia Post director Mario D’Orazio, who joins alongside Peter Tonagh, a former News Corp executive who once led both the newspaper business and Foxtel.

Fletcher reportedly chose the third appointee, Fiona Balfour, himself – her name was not recommended by the independent selection panel.

Balfour has been a chief information officer at both Telstra and Qantas.

All three appointments have raised a few eyebrows. But in the wake of the very public melee involving former Australia Post chief executive Christine Holgate and the postal service’s board, the selection of Mario D’Orazio stands out.

“As far as I know, it’s very unusual to have someone serving on two or more government boards,” a senior media figure familiar with the ABC’s board tells The Saturday Paper.

D’Orazio is now on three government boards, including the Australia Council for the Arts. He was previously managing director of Channel Seven Perth before his retirement in 2019 but made his name in media as the founding executive producer of the hit tabloid news show Today Tonight.

D’Orazio was described by Christine Holgate in the parliamentary inquiry into Australia Post as a “personal friend of Minister [Matthias] Cormann”.

While the choice to appoint Peter Tonagh to the ABC board aroused some commentary for his links to News Corp, these have been dispelled internally.

“Peter is a very measured, intelligent guy,” one senior ABC source tells The Saturday Paper. “He’s not an ideologue, he’s not a conservative attack dog.”

The former News boss was recently part of a consortium that stepped in to rescue Australian Associated Press, and was instrumental in securing $15 million in this month’s federal budget for the struggling independent newswire.

However, before this appointment, his most recent interaction with the public broadcaster was a wide-ranging efficiency review that led to the controversial decision to fold the millennial-focused ABC Life into ABC Local.

As Buttrose told the Press Club, even as chair of the ABC, she has no sway over board appointments – they are entirely the purview of the government.

“You can speak to the minister, and you can speak to the chair of the judging panel, but at the end of the day you don’t have any say in who is appointed,” she said, adding: “Seeing as you’ve asked – and I did say this to the minister – I think that’s a mistake. I don’t know chairs of other companies who have no input into the composition of their board.

“Even though we are a Commonwealth entity, I do think the chair of all Commonwealth entities should have some input into who the directors are, because as chair you know where you need to plug up a few gaps, you know what you’re looking for. It doesn’t make any sense to me that the chair isn’t included in the decision-making.”

But there is little appetite in government for listening to those at the ABC. Last year, the broadcaster announced it would need to cut about 250 people from its roster to help meet an $84 million indexation funding freeze doled out over three years.

In the past five years, the total staff headcount has fallen by little more than 300 people. Despite 700 redundancies, or staff choosing to leave, the organisation has hired almost 400 people.

What’s changed, ABC staff tell The Saturday Paper, is the depth of the talent. The new staff are young, relatively inexperienced and much cheaper. And there is only so much that can be done with so much less.

The ABC’s current three-year funding cycle is due to end in July 2022.

Then all bets are off.

 

Peter Tonagh has never worked at the ABC, but he does bring some studious knowledge to the new directorship.

Tapped by the Turnbull government in mid-2018 to head up its efficiency review of the ABC and SBS, he and former Australian Communications and Media Authority acting chair Richard Bean spent nearly a year looking into every part of both organisations.

They handed in their report in March 2019, but the Coalition refused to release it for another 15 months.

Finally, it was published without fanfare on the communications department’s website just hours after the ABC’s managing director, David Anderson, announced a dramatic restructure of the broadcaster.

“The minister left it in the bottom drawer for ages and ages and ages, and the reason they didn’t want to release it was because Peter Tonagh did a very good job,” a senior ABC figure says.

“His overall conclusion was that we cannot maintain the current level of service with the budget we have: it’s just not possible.”

The review explicitly excluded the possibility of merging the two broadcasters, which has been championed by some Coalition party room members. Ultimately though, it did recommend the sharing of back-office staff, and one day even a state-of-the-art broadcast facility.

“It is likely that the ABC will require one-off funding in the short term and that the benefits will be realised only in the longer term,” Tonagh and Bean wrote in the review.

“A clear view of the intended planning trajectory and expected benefits will be required to justify this funding. For example, the ABC is likely to require funding support for its modernisation investments and any funding request should be justified with a clear case for return on investment.”

Not quite what the government was looking for, perhaps. Certainly, there is a flank within the broadcaster that hopes Tonagh may be the organisation’s best hope of securing more reasonable funding for the next “triennium”.

The ABC is expected to start negotiations for the new funding cycle next month. These will be headed up by Buttrose as board chair and managing director Anderson.

There is much at stake; the first signs of the outcome will likely be contained in the midyear economic update in December.

In June last year, The Saturday Paper revealed the federal government had commissioned a $220,000 research project – since awarded to the Queensland University of Technology – to examine news media business models, specifically asking for an examination of the “impact” of publicly funded broadcasters on commercial operators.

This is a common refrain from News Corp and other commercial media companies: that the existence of the ABC makes it harder for others to make money out of the news business.

The Department of Infrastructure, Transport, Regional Development and Communications said at the time the findings of the research project were not intended for public release, but nevertheless would “be used as an input to inform policy advice and decision-making in relation to the news and media sectors”.

Since the report was commissioned a year ago, some things have shifted in the media landscape.

Google and Facebook, for example, have entered agreements with commercial outlets such as News Corp, Nine newspapers and Guardian Australia to pay for news content displayed on their platforms. The ABC is still in negotiations with the tech giants for a similar agreement. (Editor’s note: Schwartz Media, owner of The Saturday Paper, is also currently engaged in negotiations with Google and Facebook.)

Some inside the ABC are wary about what will happen if, or when, the public broadcaster strikes a deal with the tech giants.

“There is a concern that some in the Coalition party room will use that as an argument to say, ‘Well, we can cut that amount of money from the ABC,’ ” a senior figure at the national broadcaster says.

There was no change in the recent federal budget to the ABC’s funding. But no confirmation, either, that the additional $44 million grant over three years for “enhanced news gathering” would be extended beyond mid-2022.

Staff expect that it will be renewed, as it has been twice already by the Coalition government, but as Buttrose told the Press Club earlier this month, “one can always be surprised”.

Speed on such issues has not been a hallmark of this government.

When the board positions were finally announced on Monday, ABC leaders were expecting a decision on the deputy chair as well. Since Kirstin Ferguson left at the end of her term last year, the public broadcaster has had only an acting deputy chair in Peter Lewis, who was similarly elevated to the ABC board after conducting his own efficiency review in 2014.

This deputy chair appointment, like the rest of the board, is the sole preserve of Communications Minister Fletcher.

Responding to questions from this newspaper, his office said the government will “move” to appoint a deputy. There is, however, no time line.

In the meantime, the new board directors have significant work ahead of them. It could be a former Murdoch executive is the broadcaster’s next best hope.

This article was first published in the print edition of The Saturday Paper on May 22, 2021 as "Is a former Murdoch executive the ABC’s next best hope?".

A free press is one you pay for. In the short term, the economic fallout from coronavirus has taken about a third of our revenue. We will survive this crisis, but we need the support of readers. Now is the time to subscribe.

Rick Morton is The Saturday Paper’s senior reporter.