The ABC: from correcting market failure to causing it

This is where the argument gets trickier. References can be made to the provision of quality and pluralistic journalism; to fostering a sense of national identity; to promoting 'soft diplomacy' (noted above); to educating the public; and to assisting with emergency relief efforts. Underwriting innovation and training can be added to the mix. The trouble with this reasoning is that it is all very amorphous - there is no reason why private provided broadcasting (and online) services cannot make similar contributions, although there is a distinct possibility, given the generosity of taxpayer funding of the ABC, that many of these services are crowded out.

In truth, the areas of market failure are shrinking and the rationale for a large, taxpayer-funded public broadcasting organisation like the ABC is shrinking at the same rate. We now have pay-TV, with the Sky News channel predating ABC News 24 by many years. This raises the tricky issue of the justification for The Drum website on which I write. Getting outsiders to write opinionated drivel is one thing – a waste of some money but not much else – but to allow public policy commentary by the ABC's preeminent and supposedly impartial journalists – the ones that quiz our political leaders on an almost daily basis – is another thing altogether.

Now we can find out what Fran thinks about the NBN (she's in favour) or what Barrie thinks about Tony Abbott's recent performance (not good). So when these journalists interview our politicians, we can cross-reference their views on the topics being discussed. How does this square with any definition of impartial and unbiased journalism to which the taxpayer is forced to commit funds?

So here is the rub: the market failure case for funding the ABC is disappearing. In fact, the recent expansive nature of the ABC – all those television stations, radio stations and online offerings – is actually squeezing activity that would otherwise be undertaken by the private sector. From partly correcting market failure, the ABC is now causing it. We are now dealing with a case of unfair competition and wasted taxpayer funds. Were it not for the ABC, there would be much greater private provision of quality, serious and genuinely pluralistic journalism which appeals to the university-educated cohort of the population.

The ABC now needs to take a leaf out of the BBC's book and to wind back its areas of activities. In response to budgetary cuts and a freeze on licence fees, the BBC is shrinking. The BBC World Service is significantly refocusing its areas of interest and cutting its staff by 25 per cent, BBC Online is also narrowing its offerings and cutting its workforce and there are significant job cuts in the BBC itself. Some staff members are being relocated out of London to Salford.

Also following the BBC example, some serious analysis of political bias in the presentation of material by the ABC is in order. An internal report commissioned by the BBC in 2007 found evidence of pervasive liberal bias within the broadcaster, describing the eschewal of Euroscepticism and immigration as examples of topics that were perceived to be "off- limits in terms of a liberal-minded comfort zone." Indeed, writing in The New Statesman last year, the Director-General of the BBC conceded that the organisation had been guilty of "massive bias to the left".

In this new media age and in these straitened fiscal times, the case for the continuation of the ABC in its current form is very weak. The fact that many members of the public enjoy the output of the ABC and trust the veracity of its news and current affairs reportage are really neither here nor there. Many people would enjoy free wine; this does not constitute a case for taxpayer funding of wine.

The future involves a redrafted Charter, a narrower focus on areas which will always be under-provided by the private sector and significantly reduced taxpayer funding.