The Minister for Communications, Malcolm Turnbull, has announced an efficiency study of the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS).
The terms of the reference for the study are shown below. They specifically exclude all matters relating to the broadcasters’ charters, editorial policies, advertising and program quality.
The study will be conducted by the Department of Communications, assisted by Peter Lewis, the former Chief Financial Officer of Seven West Media Limited. The study is required to be completed by April, prior to the May Budget.
A brief statement from the Managing Director of the ABC, Mark Scott, says: “The ABC has constantly reviewed its operations to deliver the best and most efficient return to Australian audiences. We have been in consultation with the Minister and will work with the Department and Mr Lewis on this new study.”
- Watch Turnbull interviewed on SBS (4m)
Statement from Malcolm Turnbull, Minister for Communications.
ABC and SBS Efficiency Study
The Department of Communications will conduct a study of the efficiency of the operations of the Australian Broadcasting Corporation and the Special Broadcasting Service. Mr Peter Lewis, formerly Chief Financial Officer of Seven West Media Limited, will assist the Department in this work.
It is a routine responsibility of the Minister to ensure that the ABC and SBS use public resources as efficiently as possible. Over time Parliament has broadened the Charter responsibilities of the ABC and SBS. But the means by which these responsibilities are delivered, resources are allocated and priorities determined is at the discretion of the national broadcasters’ boards and managements – with varying levels of transparency to the Government of cost drivers or scope for efficiencies.
The study will examine costs for the day-to-day operations which deliver ABC and SBS programs, products and services, and propose options to increase efficiency and reduce expense. The objective is to ensure ABC and SBS fulfil their Charter responsibilities at least cost to the community, and keep pace with rapidly changing practices in the broadcasting sector.
It will not review the terms of the national broadcasters’ Charters, or editorial and programming decisions. In other words the study will not review the content of what is broadcast, but rather the cost of delivering that content and the operations that support it.
The study is being conducted with the full co-operation and assistance of ABC and SBS, which have both volunteered representatives to work on the team to be overseen by Mr Lewis. The ABC and SBS have welcomed the study as a useful and timely addition to their routine internal processes to identify efficiencies.
Terms of Reference for the ABC and SBS Efficiency Study.
ABC and SBS Efficiency Study– Terms of Reference
The Study
The national broadcasters, ABC and SBS, receive $1.2 billion in funding a year from the Australian Government. It is a routine responsibility of all Government authorities to use taxpayers’ funds as efficiently as possible and to strive for operational improvements, and the broadcasters are no exception.
Parliament has agreed over time to a broad range of responsibilities for the ABC and SBS which are incorporated into their respective Charters. The delivery against those Charter responsibilities, relative priorities and resource allocation are largely at the discretion of the ABC and SBS Board and management. There is limited transparency to the Australian public, the Government and the Parliament of the breakdown of costs of delivering the ABC and SBS Charter responsibilities and whether these could be more efficiently delivered by the national broadcasters.
This study will seek to clarify these costs, provide options for more efficient delivery of services (based on current practice in Australian broadcasting), identify risks and any impediments to change and assist the national broadcasters to continue to deliver their Charter responsibilities in ways that minimise costs and maximise benefits for the Australian community.
The study will focus on the costs of inputs—that is the ‘back of house’ day-to-day operational and financial operations, structures and processes applied to delivering ABC and SBS programs, products and services. It is not a study of the quality of the national broadcasters’ programs, products and services, or the responsibilities set out in their Charters but of the efficiency of the delivery of those services to the Australian public.
Scope
The Department of Communications will conduct the study and will be assisted by Mr Peter Lewis, formerly Chief Financial Officer of Seven West Media Limited. ABC and SBS personnel will also form part of the study’s secretariat. It will focus on all ABC and SBS activities, other than those specifically specified as out of scope below, including:
- Television
- Radio (Analog and Digital)
- International services
- Digital services including online and catch-up TV
- Production—including facilities
- Advertising (SBS only)
- Enterprises/retail services
- Corporate overheads
- Asset management and capital expenses.
The study will not be limited to looking at these activities separately, and could also look at outputs on a cross-platform basis i.e. delivery of news and current affairs across TV, radio and digital, where useful.
Out of Scope
- Transmission costs, which will be the subject of separate advice to Government;
- Changes to the ABC and SBS Charters;
- Editorial policies of the national broadcasters;
- Allowing advertising on the ABC;
- Quality of programs/products delivered by the broadcasters.
Terms of reference
The study will provide an objective assessment of the efficiency of the ABC and SBS in delivering their services. The study will:
- identify the real current and expected future costs of each output of the ABC and the SBS (as set out in Scope above);
- test those costs against better practice broadcasting operational models and practices and quantify differences;
- identify the options available to the broadcasters to improve efficiencies and the benefits and risks of such options;
- identify any impediments to implementation of such options—this analysis may go to operational, governance, structural, financial and cultural issues within each organisation;
- develop an ‘ideal cost-base’ for the national broadcasters and compare this with current cost base.
The study will also identify options to improve:
- transparency of the costs of national broadcasting services to maintain confidence in their expenditure of public funds;
- the processes and systems for decision-making across different genres, platforms and priorities; and
- operational governance and management practices/processes of the national broadcasters including ways of enhancing the efficient and transparent management of the organisations.
Without further limiting its scope, the study should:
- Consider the return on investment of the public funding for the national broadcasters, including in terms of audience or other usage;
- Analyse costs at the level of services (eg ABC1, ABC2, Radio National etc); platform (television, radio, online); audience brands (eg ABC 4 Kids, or News); program genre; and in relation to specific Tied Funding such as the National Interest Initiative;
- Provide breakdowns of these costs in States and regions, and by audience or user demographic; and
- Quantify, as far as possible, the costs of operating at locations across Australia.
In undertaking the task, the study will have regard to:
- The ABC and SBS Charters, legislated obligations and editorial and operational independence from government;
- Ratings, audience reach and other relevant audience measures for the ABC and SBS programming;
- Changing audience demand, particularly increasing use of catch-up and online services;
- The role of ABC and SBS in provision of emergency services information;
- The geographic spread of services and infrastructure, their importance to communities compared to the costs of maintenance; and
- The relative importance/performance of the ABC and SBS compared to other broadcasting services in local markets.
The report arising from the study will be provided to the Minister and the Chairs of the ABC and SBS on completion.
Timeframe
The project will commence in February 2014 and deliver its final report in April 2014.
Statement from Mark Scott, Managing Director of the ABC.
The ABC has constantly reviewed its operations to deliver the best and most efficient return to Australian audiences. We have been in consultation with the Minister and will work with the Department and Mr Lewis on this new study.
