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Nov 21, 2006

Leaked KPMG report: ABC efficient but underfunded

It arrived in the proverbial plain brown wrapper – confirmation that the Federal Government is starving the Australian Broadcasting Corporation. Crikey has received a copy of an ABC Board briefing on the crucial KPMG review of the ABC’s funding.

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It arrived in the proverbial plain brown wrapper – confirmation that the Federal Government is starving the Australian Broadcasting Corporation.

Crikey has received a copy of an ABC Board briefing on the crucial KPMG review of the ABC’s funding. It shows the ABC needs an extra $125.8 million in core funding over the next three years just to maintain its present operations.

Click for larger image

The Federal Government’s response in the last budget was maintenance of core funding in real terms, plus $88.2 million over three years in new funding. In other words, there is a $37 million shortfall – and that’s before any planning for new services, or for the extra programs demanded by the lifting of restrictions on the ABC2 digital channel

The KPMG report, described by the ABC as the most comprehensive external performance review in decades, was commissioned by the Federal Government last year after a request from the ABC Board. The Minister for Communications, Senator Helen Coonan, refused to release the report but said it had been “a useful exercise” and “very influential” in getting more funding in the budget.

But obviously not influential enough.

The KPMG report said “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”.

After comparing the ABC to Australian commercial broadcasters and public broadcasters overseas, KPMG concluded “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.”

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. Now we know why.

The Board summary of the KPMG report was leaked earlier this year to Graeme Thomson, who manages ABC matters for the Community and Public Sector Union. Thomson told Crikey yesterday that when the document arrived – in a plain brown envelope and without covering note or details of the source – he assumed it was an attempt to “set up” staff elected director Ramona Koval, who had been accused of leaking in the past.

The position of staff elected director was abolished a few months later. “I don’t think it was Ramona who gave it to me,” says Thomson. “Because I was suspicious I was being set up I basically sat on the document, but made references to having it.”

Koval yesterday vigorously denied being the source of the leak to Thomson. “It didn’t come from me,” she said. I believe her.

So who did the leaking? Some speculate that it might be senior ABC management. After all, the report endorses the stewardship of Russell Balding, just before he left the job.

The gist of the KPMG Report has come out before, but Coonan’s office dismissed the information as unreliable. We now know it was, literally, on the money.

The other revealing thing about the document is that it is only two pages long – and this is apparently all the information that went to the Board. The KPMG report was done for Government, and it seems even the Board was not trusted with the full contents.

The ABC Chairman Donald McDonald welcomed the last Federal Budget outcome as the best for the ABC in 20 years – which it was. But the previous 20 years had been particularly grim.

Now we know that behind the supposed generosity lies a Government that budgeted for starvation and decline.

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