Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on the Australian Broadcasting Corporation Amendment Bill 2006. This is a brief bill which has significant implications for the governance of the Australian Broadcasting Corporation. The bill gives effect to the announcement by Senator Coonan in March that the government would ‘restructure the ABC board’. The proposed restructure consists of just one measure—just the one—and that is the abolition of the position on the board that is held by a director elected by the ABC staff. So reform of the ABC board is nothing more than knocking off the ABC staff-elected position. This is a position that has been in place under Labor and coalition governments for the last 23 years.

The board of the ABC is a body charged with significant responsibilities. Any move to change its composition should be subjected to careful scrutiny. ABC directors are required to be the guardians and protectors of a national asset that has been built up by generations of Australians over more than 70 years. The board is charged with responsibility for ensuring that the ABC fulfils the charter given to it by this parliament. The board must retain the independence and integrity of the ABC. Importantly, it must also ensure that the gathering and presentation of news and information is accurate and impartial.

Labor believes that the parliament should maximise the likelihood that those appointed to be directors of the ABC are capable of fulfilling these duties. That is the fundamental principle that underlies Labor’s approach to this debate on the ABC staff-elected director. Labor’s starting point is to ask how the removal of this long established position will help the ABC board to meet its responsibilities under the act. Let us look at the government’s stated rationale for this legislation. The government argues that the staff-elected director is subject to a potential conflict of interest. It contends that staff-elected directors may feel obliged to represent the interests of the people who elected them, rather than to act in the best interests of the ABC.

Senator Coonan has stated that the staff-elected position is an anomaly among Australian government boards. Relying on the Uhrig report on the corporate governance of statutory authorities and officeholders conducted in 2003, the minister argued that representational appointments were not consistent with modern principles of corporate governance. Let us be perfectly clear—Uhrig’s corporate governance foray was a sham. He came up with proposals that run contrary to corporate governance principles adopted all around the world. He was the government’s hatchet man to deliver what the government wanted, and his appointment, the process of his inquiry and his report were a failure of corporate governance.

With the support of the minor parties, Labor moved to have these claims examined by the Senate Environment, Communications, Information Technology and the Arts Legislation Committee. Despite considerable public interest in the issue and a break between parliamentary sittings of more than five weeks, the government deigned to permit only one day of public hearings into the bill. While the inquiry was brief, it was long enough to expose the government’s failure to make a convincing case supporting the abolition of the staff-elected director.

This is a bill driven by extreme ideology and a desire to control the ABC, rather than any genuine concern to improve the ABC’s corporate governance. How can you take this government seriously? It wants the ABC to be its plaything. It is not interested in corporate governance; it just wants to be able to tell the ABC what to do. Submissions to the inquiry, many from concerned ABC viewers and listeners, overwhelmingly opposed the bill. The proposition that the staff-elected directors suffer from a conflict of interest was shown in the inquiry process to be without foundation.

Section 8 of the ABC Act is quite clear that the obligations of all directors are the same, regardless of whether they are elected by the staff or hand picked by the Prime Minister, Mr Howard. During the hearing the government failed to produce any evidence—not one skerrick—that staff-elected directors had failed to comply with their duties to the ABC. There are a range of provisions under the Commonwealth Authorities and Companies Act and the ABC Act that are available to discipline directors who breach their duties. While there have been rumours and unsubstantiated innuendo about leaking, there has not been one case in which the Commonwealth has sought to discipline a staff-elected director using these provisions.

The current and three previous staff-elected directors who appeared before the committee all showed a clear understanding that it is not the role of the staff-elected director to represent the ABC staff on the board. The committee heard of a number of instances which clearly demonstrated the priority that staff-elected directors have given to their responsibilities under the act. For example, in 2002 Kirsten Garrett opposed a lucrative exclusive deal between the ABC and Telstra because it would have allowed Telstra to influence ABC production decisions. In the mid-1990s, Quentin Dempster opposed backdoor sponsorship arrangements that contravened the ABC Act. In both cases, the staff-elected directors resisted proposals benefiting ABC staff because they came at the cost of undermining the independence of the ABC.

As I stated earlier, the government has relied on the flawed Uhrig review and its warnings against representational appointments to government boards to support the changes contained in the bill. The Senate should also be aware, however, that Mr Uhrig did not examine governance arrangements at the ABC. He did not interview the chairman of the ABC, nor did he interview any past or present directors of the ABC. In fact, the terms of reference for the review required Mr Uhrig to focus on government agencies with:

... critical business relationships.

Organisations like the Australian Taxation Office, the ACCC, APRA, ASIC, the Reserve Bank, the Health Insurance Commission and Centrelink were specifically named in the terms of reference. These are very different entities to the ABC. The ABC is a unique institution. The governance arrangements of the ABC should be based upon its special needs. As Professor Bartos from the National Institute of Governance told the Senate inquiry:

In governance terms, the choice of model to be adopted for a public sector body should not be static or formulaic, but be driven by the objectives of the organisation concerned.

There is no reason to expect that a template developed for agencies like the tax office or Centrelink will be appropriate for the national broadcaster.

Labor believes there is a strong case for retaining the staff-elected director position on the ABC board. Since its inception, this position has always been occupied by experienced public broadcasters. The evidence received by the Senate committee demonstrated that staff-elected directors have brought considerable experience in public broadcasting to the deliberations of the board. This is expertise that has been in short supply on the ABC board in the last decade. Since 1996, the government has repeatedly sought to fill board vacancies with its conservative cronies.

Last Friday, Quentin Dempster was elected to succeed Ramona Koval as the next staff-elected director on the ABC board. Mr Dempster has more than 20 years experience as a broadcaster working in the ABC. He has an Order of Australia for his services to the media. In addition, Mr Dempster already has experience on the ABC board, having served as a staff-elected director for four years in the 1990s. It is difficult to imagine a candidate with a more suitable CV to join the ABC board. If this bill passes, however, Mr Dempster will not be permitted to take up his recently elected position.

Why is the government so desperate to stop this happening? Why is this bill being rushed through the parliament? The answer may lie in the fact that Mr Dempster has been strongly critical of proposals to commercialise the ABC’s growing broadband content. While the ABC Act prohibits advertising on television and radio, this restriction does not apply to the internet. The minister has already stated her view that the introduction of advertising is a matter for the board. Abolishing the staff-elected position would remove a strong opponent to such changes. Of course, the commercialisation of internet content would not be in the interests of the ABC; it would undermine the ABC’s editorial independence. The ABC’s digital content creators must be free to produce material without worrying about offending the sponsors of the ABC website. The parliament should not lightly silence the voice of a strong defender of ABC independence.

Labor believes that the abolition of a staff-elected director’s position will have a significant detrimental impact on the effectiveness of the ABC board and undermine public perceptions of its independence. The staff-elected directors have a unique insight into ABC operations. They can play a key role in assisting the board to hold ABC management to account. One adverse consequence of the bill that the Senate is considering today is that the actions of the ABC management will receive less scrutiny than they did yesterday.

Senators can search for a sustainable policy justification for abolishing the staff-elected director, but they will search in vain. The truth is that this bill is not about improving the ABC’s corporate governance; it is just a further attempt by the government to undermine the independence of the ABC. The staff-elected position is just one position out of a possible nine on the ABC board. However, it is the only position that is beyond Prime Minister John Howard’s capacity to influence or control. That is why he has decided it has to go. Some Liberals understand the dangers of the government’s proposal. They also understand the real motivation for this bill. In March, former leader of the Liberal Party John Hewson wrote in the Australian Financial Review:

... the Government’s recent decision to stop staff electing a director of the ABC board is a churlish, pyrrhic victory for some of the ideologically-based antagonists in the Liberal Party and some of their sympathetic business mates.

John Hewson has called it as it is. He goes on to say:

It is clearly against the best interests of the institution and the listening and viewing public.

This is not the Labor Party, the unions or the Friends of the ABC making these comments; this is the former leader of the Liberal Party. Dr Hewson has been on a few boards in his time. He might know something about the key requirements of good corporate governance. I hope that there are some Liberal senators who will reflect on John Hewson’s comments and stop and think about where the government is going with these proposals.

This legislation is simply the latest instalment in the government’s decade long ideological crusade against the ABC. In its first budget in 1996, the government slashed ABC funding. These funds have never been fully restored. Today, the ABC has $51 million less in real terms to make programs than when John Howard came to office. Is it any wonder that, last year, the ABC was only able to broadcast 13 hours of locally produced drama? This is a national disgrace.

The extent to which the ABC has been underfunded was recently exposed when a draft version of the government’s own KPMG funding adequacy and efficiency report was leaked to the media. Let us be clear. The government brought in an outside audit company to have a look at the ABC and the claims that they were underfunded. KPMG found that the ABC needs an extra $125 million over the next three years just to maintain existing services. Tonight’s budget provides an opportunity to restore adequate funding to the ABC. The government is sitting on a surplus that some estimate to be more than $17 billion. The fact that the minister will not release the KPMG report, however, does not bode well. It suggests that the government wants to continue to hide the impact of its ideologically motivated funding squeeze on the ABC. Australians are increasingly realising that this is an arrogant government. They have almost total control of the parliament and they are increasingly intent on using that power to pursue ideological obsessions that are not shared by ordinary Australians.

The government is convinced that the ABC is plagued by left-wing bias, so it dispatches its stooges and cronies to the board to keep it in line. The Australian people do not share the government’s warped views. According to research conducted by Newspoll, 82 per cent of people believe that the ABC is balanced and even handed when reporting news and current affairs. That leaves 18 per cent; I guess they must all live on the other side of the chamber.

Labor does believe that the ABC board is in need of genuine reform. There is public concern about the ABC’s corporate governance, but it does not relate to the staff-elected director. After a decade of the Howard government, there is now a clear conservative bias in the board. Reforms are needed to strengthen public confidence in the independence of the ABC board.

There was a time when the Prime Minister claimed to understand the importance of an independent ABC. Back in 1995 he railed against appointments made by the Keating government. Back then, he lectured: ‘You not only must have a board that is completely politically neutral but it must be seen to be neutral.’ That was said by John Howard, the current Prime Minister of Australia. It would be interesting to hear how the Prime Minister thinks his appointments of conservative spear throwers like Michael Kroger, Ron Brunton and Janet Albrechtsen measure up against this criterion. What incredible hypocrisy!

John Howard was right back in 1995, but in this area, as in so many others, he has failed to live up to the principles he espoused in opposition. The current appointments process lacks transparency and is too politicised. Under current arrangements, the names of candidates are taken by the minister for communications to cabinet, but that is about all the public know about the process. How do people apply to fill a board vacancy? Is it simply a matter of having a Liberal Party membership form? What criteria are used to assess candidates? Do you have to be a member of the right club? Does it help if you have donated money to the Liberal Party? Clearly, that is what the Reserve Bank board process has been. It certainly seems to help if you have been a conservative cultural warrior.

Labor believes that there needs to be real reform of the appointments process to guarantee the independence of the ABC board and the expertise of its members. Since 2003, Labor has supported an independent merits based appointments process for ABC and SBS board vacancies. The process is based on the so-called Nolan rules that were developed in the UK and govern appointments to the BBC. Appointments to the ABC board must be open and transparent. Vacancies should be publicly advertised. There should be clear merit based selection criteria.

Labor’s policy provides for an independent selection panel to undertake a proper shortlist selection process. In stark contrast to current arrangements, the selection of the shortlist would be independent of the minister. Under Labor’s model, the minister would be free to nominate someone not on the list, but there would be a political price to pay. The minister would be required to table in parliament a formal statement of the reasons for selecting a candidate who was not on the shortlist. The publicity surrounding such a move makes it extremely unlikely that any government would pursue this option. I have to say, though, that on the form of this government, it would be prepared to be so arrogant that it would do it, anyway.

Labor’s policy would not exclude people previously involved in politics from serving on the ABC board. It would ensure, however, that they had the skills to do the job. (Time expired)