The government’s powerful Expenditure Review Committee (ERC) has signed off on cuts of $200 million to $300 million over five years to the budgets of the ABC and SBS.

The magnitude of the cuts was suggested by Crikey in August. Yesterday, a report in Fairfax said the final decision had been reached by the ERC, and Crikey’s investigations this morning suggest that report was very much on the money. A cut of $300 million over five years, to use the upper end of what is being discussed, would strip $60 million from the budgets of the ABC and SBS per year for five years.

It’s likely the $60 million will be split into a $50 million cut from the ABC, and the rest from SBS. While most Crikey sources this morning declined to comment on the allocation of funding cuts between the two broadcasters, one SBS source said he understood the multicultural broadcaster would lose $50 million over five years ($10 million a year).

Asked about the funding issue this morning, an ABC spokesman told Crikey the ABC was “yet to receive formal notification of the size of any budget cut”. An SBS spokesperson said: “SBS has been advised of the nature of the funding cuts and awaits formal government announcement.” Both broadcasters have been involved in the budget cut process since January. While official confirmation has not come yet, Crikey understands both SBS and the ABC are aware of what kind of figures are being finalised.

An official announcement is expected within the next few weeks. The cuts have passed the ERC — which consists of the Prime Minister along with Treasurer Joe Hockey, Warren Truss, Matthias Cormann and Peter Dutton — and await only cabinet approval to move forward. Many within the government are likely to consider a $60 million yearly cut as insufficient, but it is expected to pass cabinet. Previously, there was pressure to cut the ABC by up to $100 million annually. Given this, some within the ABC were this morning saying the figure wasn’t quite as bad as it could have been — a $100 million cut would have “devastated” the national broadcaster.

But a $60 million cut is nonetheless significant. ABC sources were this morning estimating around 400 to 500 redundancies would be necessary to meet this budget reduction. At the absolute best, one said, cuts could be limited to 300 jobs. The broadcaster’s foreign bureaus are in the firing line, as has been reported in The Guardian, as is its production facility in South Australia — the last remaining TV production centre outside Sydney and Melbourne, which makes it especially vulnerable to centralisation cost-savings. “My heart weeps for South Australia — they’re gonna cop it,” an ABC source said this morning, expecting around 100 jobs could be cut out of Adelaide and the surrounding region.

Whether 300 or 500 jobs go will be up to the decisions of managing director Mark Scott and the ABC board. The organisation is in a period of significant restructuring, which is driven by both the budget cuts and by Scott’s desire to see the organisation adapt to ensure its relevance in the 21st century.

After a long period where ABC management was reluctant to make decisions without knowing the final budget cut, some cuts have been announced in recent weeks. News-satire show The Roast on ABC2 will not be returning in 2015, and the team behind Big Ideas on ABC1 also believes the show has been axed, despite management telling Crikey yesterday that no decision had been made. Some journalists at the broadcaster believe decisions, as yet unannounced, have also been made on the future of several other shows as well — the state editions of 7.30 are expected to be axed, as is late-night business show The Business. Meanwhile, at SBS, some staff are also being informed their shows will be scaled back in 2015.

The cuts to SBS are more complicated than the ones at the ABC, because a change is also expected to the way the multicultural broadcaster calculates its allowable advertising. Crikey understands the government will allow SBS to average out the ads it airs during the day, allowing it to air fewer in times of low demand and more in prime time. The revenue expected from this would be taken out of its total funding package. This change has infuriated the commercial broadcast sector, which believe it will lead to more competition for the fixed advertising pie.

Peter Fray

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