Aussie pubcasters hit by $250m cuts

Australian public broadcasters ABC and SBS will see their government funding chopped by A$254m (US$219m) and A$53.7m respectively over the next five years, the country’s communications minister has announced.

The long-awaited announcement on the extent of government cutbacks was made in a bullish speech by Malcolm Turnbull on Wednesday.

ABC is having its budget cut by 4% from A$5.5bn over four years to A$5.2bn. This will be made up of a A$20m cut in 2015/16, rising to A$61m in 2016/17, A$55m in 2017/18 and A$68m in 2018/19.

The pubcaster has previously said cuts of this size would lead to significant job cuts and threaten its international operations. However, Turnbull said the broadcaster’s programming and output shouldn’t be affected.

“After working closely with the broadcasters for the last eight or nine months it is clear that there is a great opportunity for them to modernise their businesses without reducing the resources they have available for programming,” said Turnbull.

“This is what productivity is all about: getting the same, or ideally, a bigger bang for a smaller buck.

“We all expect a lot from our national broadcasters. We have every right to – projected expenditure of A$6.6bn over the next five years, after the proposed savings I’ve outlined today, represents a significant commitment by taxpayers to these two organisations by any reasonable measure.”

However, in response, ABC MD Mark Scott pointed out that the cuts come on top of those levied a year ago, amounting to more than 5%.

Scott said: “The ABC is planning its cost-saving measures on this schedule. The 5% cut comes on top of a 3% 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% annual cut.

“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 that would impact on the kinds of content we can make and offer.”

SBS is also facing a A$53.7m cut, although the rules on the amount of advertising it can air have been relaxed to allow up to 10 minutes per hour as long as it maintains its average of five minutes in every 60 during the day. Turnbull estimates that will boost the broadcaster’s revenue by A$28.2m.

SBS MD Michael Ebeid said: “SBS is already an extremely lean organisation and the funding cut of A$53.7m over five years announced by the Australian government today, whilst anticipated, is sizeable and will naturally be felt by our organisation.

“National efforts to unify Australia’s diverse communities go directly to the reason SBS was established, and it is at a time when our social cohesion is being tested that having a multicultural broadcaster is more important than ever.”

Hamish McLennan, executive chairman and CEO at commercial rival Network Ten, also hit back at the plans, accusing the government of trying to create a fourth free-to-air network by stealth and forcing the commercial industry to pick up the tab for SBS’s funding.

“Today’s announcement that commercial broadcasters will be funding SBS budget cuts is very concerning and a damaging move by a government that says it is pro-business. The government is clearly creating a fourth free-to-air network by stealth.

“This government is clearly unwilling to tackle the difficult decisions when it comes to the ABC and SBS, instead making commercial businesses and their shareholders foot the bill for the public broadcasters’ ongoing inefficiencies.”