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07 May 2008

ABC funding - the scary statistics

ABC funding. Let's take a second to look at what's really going on there.

I wrote to Kevin Rudd about this, and if you want to see his response click here.

Over the last 12 years, things have gone from OK, to bad, to worse for the ABC in terms of funding. For an idea of just how bad it is... let's look at some figures:

[NB: Some of the details of the requirements for the ABC's funding have changed since these facts were compiled for the original letter, but the bulk of the facts remain true and pertinent to the situation at the ABC]
  • The Howard government cut 12%, or $55m from the ABC in the 1997 budget, and it has waited until just this last budget for any increase from that level at all.
  • "8c per day per person" was the quoted cost of the running the ABC in the reign of David Hill as MD - over 10 years ago. It was quoted in order to prove how little the ABC actually cost to run. Today that figure is below 5.5c per day. Budget cut backs and population growth have reduced this figure significantly - but that's before inflation is taken into account. 5.5c is worth much less now than it was in the 1990's. In fact 5.5c is worth only 3.9c in 1996's currency, and so funding for the ABC has dropped by more than 51% in real terms since then - yes that's right! More than 51%.
  • Over the same period through which its real funding has dropped by more than 51% (1996 - 2007) the ABC has been required to maintain it's output for 4 national and 60 regional radio stations and a TV station, and numerous other pursuits in its charter - while also being required to expand it's output for a whole new TV station, it's hugely popular website and more recently its podcasts and its 40 ABC shops.
  • The ABC's broadcasts of internally generated new content has fallen from 103 hours to 13 hours annually in just four years.
  • Based on 2003-04 figures, the ABC TV's annual budget of $400m is less than a third of the Nine Network's $1.3bn, 40% of Seven's $1bn and 58% of Ten's $686m.
  • A recent report was commissioned by the government from KPMG. They were asked to assess whether the ABC was efficiently run and whether or not any more efficiencies could be found. It was quoted as saying "The ABC provides a high volume of outputs and quality relative to the level of funding it receives... the ABC appears to be a broadly efficient organisation." and "even with indexation we do not believe the ABC could sustain its present range, quantity and mix of outputs at its present level of funding". The report suggested that small efficiency gains could be made by reducing staff by 5% in the legal, archiving, library and Human Resources areas. Reviews of the legal department and HR are presently underway. SO - in other words - YES! The ABC is efficient, NO! the ABC cannot find any real efficiency increases in its current state and NO! The ABC cannot continue the way it is currently being funded.
  • To take the ABC up to the minimum amount quoted by KPMG as required to maintain current standards (which are already well below historic standards) would mean increasing the ABC's funding by another $37m on top of the recent increase - to a total of approx. $900m. However this still doesn't take into account the recent requirement for the ABC to spend 25% of its total operating budget on New Media and Digital Services - this would require an extra increase of $300m to a total of $1.2bn - just to maintain output [ED - These details have changed since compilation of these facts for the letter to Kevin Rudd, NG]. And FINALLY, if we are to ever get back to the (apparently cheap) days of "8c per day per person" in today's money it would take an increase of the ABC budget to $1.8bn… not too bad when you consider it is running 2 TV stations, 4 national and 60 regional radio stations, an internationally recognised News service, an enormous and popular web site and podcasting service and a chain of retail stores (and also remember that the Nine Network spends $1.3bn on one TV station alone).
Again - see here, for Kevin's response to these statistics.

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