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Our national public broadcaster is both efficient and much appreciated

By Glenn Withers - posted Tuesday, 19 August 2003

Broadcasting is a key sector in our society, not only economically but culturally, socially and politically. The sector is undergoing massive technological and regulatory change, which forces a reconsideration of the place of public broadcasting in the mix. The Australian Broadcasting Corporation (ABC) has always played a central role in the evolution of Australian broadcasting. The changes in relevant technology and the broadcasting environment point to a future role that is at least as important.

There is value to be derived from maintaining within the Australian broadcasting system a national sector that is publicly owned and funded, politically independent and fully accountable. Public ownership brings a distinct difference to the broadcasting system, with national broadcasters required and able to provide comprehensive, innovative programs not influenced by commercial imperatives.

No matter how much programming nor how many new delivery systems new technology facilitates in the broadcasting sector, private provision is profit-derived and driven. New technologies can be harnessed to provide more programs and services but more outlets and activities in themselves will not necessarily provide sufficient diversity, innovation, credibility, regional impact or Australian content for the public interest to be met. This is because commercial broadcast services will still be driven by profit incentives. The pervasive and persuasive nature of broadcasting makes a major national public broadcasting presence even more essential in an increasingly globalised broadcasting world in which audiences are likely to be more fragmented.


For national public broadcasting to fulfil its role effectively in these circumstances there will need to be appropriate access to the full range of production and delivery technologies. This will enable national broadcasters to achieve sufficient scale and scope to be able to participate alongside commercial broadcasters and datacasters in both traditional and new media. It will also be essential that there be provision of statutory status to allow political independence, combined with accountability to Parliament, and on specific matters, to the Auditor-General, the Ombudsman [in relation to administrative matters], Administrative Appeals Tribunal, the ABA [in relation to complaints covered by the Code of Practice] and under FOI and other relevant legislation.

There must be a guarantee of funding sufficient to ensure the national public broadcaster is able provide an innovative and comprehensive package of services, including traditional and new services, to citizens from its free-to-air radio and television networks and its online service. This will ensure that the public broadcaster is free to innovate, and also, importantly, will ensure that pricing mechanisms different from the commercial system continue.

Efficiency: Costs Of Provision

When assessing efficiency, prejudice can sometimes play as great a role as fact. Indeed, there is a not-uncommon view that public providers by definition must be more inefficient, more bureaucratic and less innovative than private firms. Yet this is manifestly wrong in the case of Australian national public broadcasting.

Over a period of four decades, ABC radio cost has declined consistently relative to the commercial radio sector. It is not surprising that the ABC should have some economies not available to commercial radio, eg not needing to maintain marketing advertising departments. But the downward trend in relative ABC cost, not just its lower level, is an important observation.

If attention is switched to television, the ratio of ABC expenditure per average television broadcast hour compared to equivalent commercial expenditure averaged across the three networks shows a downward trend in relation to costs.

An alternative benchmark is cost per station. If this calculation is done for the television networks, the comparative results for the ABC vs the commercial networks are as follows for 1998: ABC: $26.18m per station; Ten: $46.39m per station; Seven: $83.21m per station; Nine: $88.59m per station.


Other measures available for television similarly confirm this cheaper provision by the national public broadcaster. One further such alternative measure is total expenditure per employee. In 1997 this was $149k per employee for the ABC and $313.3k for commercial broadcasters.

There is an overall consistency across the range of all of these indicators discussed, despite individual problems with any one such performance indicator.

While the ABC's efficient performance relative to commercial broadcasters is in part explained by the absence of advertising transaction costs and by the requirement to respond to a reduced parliamentary appropriation, it can also be explained by the Corporation's own strategies. For example, the "One ABC" policy begun in 1996/97 was directed at, among other things, better control of costs of corporate management. Similarly, substantial new "contestability" initiatives were introduced into the ABC in the later 1980s to enhance production costs comparison.

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Article edited by Jenny Ostini.
If you'd like to be a volunteer editor too, click here.

This is an edited version of an article first published in Southern Review vol 35 no 1 2002.

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About the Author

Professor Glenn Withers is Executive Director of the Graduate Public Policy Program, Research School of Social Sciences at the Australian National University.

Related Links
Australian Broadcasting Authority
Australian Broadcasting Corporation
Australian Bureau of Statistics
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