Turnbull confirms ABC, SBS funding cuts.

Malcolm Turnbull is in Adelaide formally announcing further funding cuts to ABC and SBS.

Including the cuts announced in the May budget, public broadcasters will lose $308m over 5 years.

Further cuts today include :

ABC cuts will total $254m over 5 years.

SBS will be cut by $25.2m over 5 years.

SBS will be allowed to increase advertising in primetime from 5 mins to up to 10 minutes in “flexible” arrangements, but not increase its total overall.

The cuts follow the recommendations of the Lewis Report, in identifying savings that would not impact Programming.

Turnbull said the Lewis Report identified areas to make savings including broadcasters working together and modernising technologies and acknowledged both ABC and SBS have found ways to save efficiencies in the past.

“It is the responsibility of any new government to look carefully at a range of activities that the taxpayers fund and ask the tough questions,” he said.

“It’s clear that there is a great opportunity for (ABC and SBS) to modernise their businesses without reducing the resources they have for Programming.”

“Decisions regarding which efficiencies will be implemented and when are matters for the ABC and the SBS Boards.”

The Lewis Report identified 5 areas  where significant efficiencies and savings could be achieved:

1. Working together—efficiencies from greater operational cooperation between the ABC and SBS, while preserving their separate and unique programming identities.
2. Harnessing new technologies—efficiencies gained from using the latest technologies in the businesses and retiring older technology.
3. Modernising the business—efficiencies from better alignment of the national broadcasters with the wider broadcasting and content production sector, in keeping with contemporary business practice.
4. Improved resource allocation—efficiencies from better matching supply and demand in service delivery.
5. Financial transparency and governance—is the level of transparency of financial and operational decision-making adequate for the Parliament and taxpayers?

But he steered clear of the government interfering in Programming decisions.

“At one point even the beloved Peppa Pig was said to be facing the axe. Apparently we were going to take on the 3 years of Australia and their mothers.

“And then when that strained credulity, Tony Jones and Lateline were substituted for the pig only to be followed by the Stateline versions of 7:30 on Friday evenings.

“The savings I am announcing today are not of the scale that requires any particular change to Programming.

“All of the savings can be found within operational efficiencies of the kind canvassed in the Lewis efficiency study.”

“Everyone can’t have their favourite programme in the schedule at 7:30 on ABC1. Broadcasters have to make choices.”

He said the government should not be blamed for ABC management spending.

“ABC management know they can meet these savings without the resources available to Programming being reduced. Furthermore they know that the government and their Board, know too.”

He said SBS would increase by $8-$9m in ad revenue, though other observers said it was “too conservative.” The Lewis Report estimated a maximum of $20m increase under new arrangements. Changes to SBS advertising will require legislation to be put to Parliament in the first quarter of 2015.

Turnbull also raised future issues for discussion with ABC:

“For reasons I frankly do not understand, the ABC does not have a chief independent financial officer,” he noted.

“Equally I propose to put to the Board that the role of Editor in Chief no loner be combined with the role of Managing Director.

“The Board should expect the Head of News and Current Affairs, like the CFO report directly to the Board as well as to the Managing Director, thus enabling the Board to discharge its very important statutory obligation about News I will come to in a moment.”

He subsequently referred to section 8 of the ABC Act about accurate an impartial News reporting and objective journalism.

“ABC and SBS Boards are responsible for their objectivity and accuracy. I have on occasions heard Directors say they don’t want to get involved. Well, if they don’t want to get involved they should resign.”

Turnbull said if ABC management did not think they could find 5% of savings they were “selling themselves short and letting down the people of whose resources and trust they are the custodians.”

Turnbull said Tony Abbott’s remarks prior to the election were in the context of Liberal party statements that savings would still be identified for broadcasters.

Full Turnbull speech here

Today Education Minister Christopher Pyne has also launched a petition at change.org to pressure ABC not to shut down TV production in his home town of Adelaide.

STATEMENT FROM SBS MANAGING DIRECTOR MICHAEL EBEID:

SBS is already an extremely lean organisation and the funding cut of $53.7 million over five years announced by the Australian Government today, whilst anticipated, is sizeable and will naturally be felt by our organisation.

The Government will provide $287 million to SBS in 2014-15 which represents 75 per cent of our organisation’s total funding, with 25 per cent generated from our own commercial revenues. SBS operates on one fifth of the average budget of the other free-to-air broadcasters.

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.

SBS’s dedicated role to reflect the changing face of our nation is our point of difference in the Australian media. It is SBS’s unique insights and links to multicultural communities that means we are perfectly positioned to help shape a cohesive multicultural future, and to explore and celebrate what it means to be Australian today.

Through the ABC and SBS Efficiency Study, the SBS Board and I have sought to demonstrate SBS is lean and agile, with creative employees that are, by necessity, highly-skilled at delivering on our Charter obligations, on very tight budgets.

Ordinarily, SBS is funded within a triennial model and this cut has come in the middle of that cycle which is disappointing, as our preferred outcome would have been to retain the stability the triennial model provides, given our long-term supplier agreements.

I note Minister Turnbull’s announcement of his intention to introduce legislation to Parliament in 2015 to amend the SBS Act 1991 which would enable SBS to use its current 120 minutes per day of advertising differently, by allowing it to average the minutes to a maximum of 10 minutes per hour instead of five minutes per hour.

As the Government has identified public broadcasting as an area it will cut funding, should this legislative proposal pass Parliament, it could allow SBS to earn back in the order of $20-30 million of the Government’s funding cuts over five years through additional advertising revenue.

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.

Some of these measures include transmission and distribution efficiencies, work flow and operational initiatives, a freeze on executive salaries and a number of other smaller efficiency initiatives we will be exploring through our internal planning processes.

SBS’s focus and my personal commitment as Managing Director, has and continues to be on securing funding to put into more Australian content for our audiences and to meet our Charter.

SBS continues to ensure a focus on being well-prepared to use our modest resources to invest in initiatives that best equip us to maximise our contributions to the Australian community.

Friends of the ABC have undertaken a phone campaign asking people who appreciate the ABC to call Coalition politicians.

“The community simply doesn’t believe Minister Turnbull’s claim that cuts to the ABC are to achieve efficiency. The Government still hasn’t released the results of the ABC efficiency investigation undertaken when the Coalition was last in office. Leaks from that report revealed the public broadcaster was seriously underfunded,” said Glenys Stradijot, ABC Friends National spokesperson.

“Inadequate funding of the ABC over many years is already resulting in a loss of breadth, depth and innovation in some areas. Audiences outside NSW are acutely aware of the loss of local programming that has resulted from the ABC’s increased centralisation in Sydney for so-called efficiency.

“A further $50 million annual cut would not be a small cut in the context of the ABC’s existing budget and the job the community expects its national broadcaster to do.

“The Phone a Coalition Politician campaign is for a day. However, the Government can be assured there will be more to come if its cuts to the ABC proceed.”

This post updates.