Ideas@TheCentre – The Centre for Independent Studies


Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Forget ABC bias, its crowding out that's the problem

07 February 2014

cowan-simon The Recent weeks have seen an intensification of claims that the majority of presenters at the ABC are left leaning and that as a result the ABC is biased. This debate around bias at the ABC is actually a diversion.

While the ABC could do more to ensure it has prominent presenters of all political persuasions, all ABC journalists and presenters with which I've been involved during media appearances on the national broadcaster take the obligation to present balanced coverage seriously.

The real issues that a review of public broadcasting in Australia should address are twofold: what needs ABC and SBS are fulfilling; and, whether ABC and SBS are duplicating or crowding out providers who would otherwise be meeting those needs.

Currently ABC's mission under its Charter is to 'provide … comprehensive broadcasting services' and while it must also 'take account of' commercial broadcasters, in practice that doesn't limit the ABC's broadcast scope.

Collectively ABC and SBS operate seven television channels, seven national radio stations, 15 digital radio stations, more than 50 local radio stations, two international broadcasters, two catch-up platforms and two news and current affairs websites.

Given the overlap between services provided by the ABC and SBS, there is a strong case for consolidating them into one entity (or closing SBS altogether), however this is only part of the issue. Many of the services provided by ABC and SBS compete not only with each other but also with commercial providers, exacerbating the well-publicised challenges confronting news media outlets.

A good example is online news and opinion. Around the world, tight margins are leading many media companies to introduce paywalls, including Australian publishers such as Fairfax, News Limited and Crikey.

On top of the challenges of the global media environment, Australian media providers face the difficulty of competing with free online access to the ABC News 24 network.

The unforgiving nature of that challenge is clear. In recent times we have seen the closure of The Punch as well as the troubles of Fairfax and the Global Mail, among others.

One potential solution involves changing the ABC charter so instead of providing comprehensive broadcasting services itself, the ABC's task would be to ensure there are no gaps in the commercial broadcasting landscape (especially via the ABC's online platforms).

This would ensure continuity of many ABC services highly regarded by the community (i.e rural and regional coverage, detailed analysis of government policy, and in-depth investigative journalism). Savings could come from a reduction in duplicative broadcasts (such as reducing the 28 hours of children's broadcasting provided each day).

In an environment of increasingly scarce resources, we cannot afford to cordon off a $1 billion government expenditure. However, any review of public broadcasting would be better off focusing on value for money for taxpayers rather than ensuring the best media coverage for the government.

Simon Cowan is a Research Fellow at The Centre for Independent Studies.

Put charities commission on backburner

07 February 2014

helen-rittelmeyer The New Zealand Charity Commission was in operation for half a decade before the NZ government decided it wasn't providing value for money and abolished it. In the UK, the Charity Commission for England and Wales has stuck around for decades despite multiple reports declaring it is not providing value for money – the latest such report was released just this week by the Parliamentary Accounts Committee and deemed the commission 'not fit for purpose.'

Compared with those countries, Australia is lucky. We can abandon our experiment with this failed model of charity regulation after just one year.

The Australian Charities and Not-for-Profits Commission (ACNC) was created by the Gillard government in December 2012 to reduce red tape, enhance public trust in charities, and police fraud and wrongdoing in the sector.

So far, the ACNC has not made significant progress on these goals, and the international record of charities commissions suggests that future success is unlikely. On public trust, for example, it is noteworthy that in early 2013 Australians already rated charities more trustworthy than Federal Parliament, the High Court, or the ABC. More importantly, trust levels in Australia were approximately the same as in England and much higher than in New Zealand, both of which had charities commissions at the time.

On red tape reduction, the ACNC has so far failed to obtain the cooperation of the state governments of NSW and Victoria. Considering the large portion of the charity sector's regulatory burden that state governments represent, no serious effort to reduce red tape can proceed without those governments' cooperation.

Donors must be able to give to charities with confidence. Fortunately, the kind of oversight that gives donors confidence can now be conducted without added layers of red tape.

Wealthy philanthropists, who represent an increasingly important segment of Australia's charitable donation market, usually conduct their own research. They review a charity's finances and operations, and after their donation has been spent, they evaluate what kind of 'social return on investment' the charity was able to achieve.

For small household donors who may not have the means to conduct extensive research on their own behalf, a new resource has emerged: online charity evaluators. These sites compile information about charities – statistical data as well as more holistic information – and then organise this information in a way that is accessible to the average non-specialist who just wants to write a cheque to a good cause.

It is vitally important to preserve the separation between the institutions of civil society and government. Abolishing the ACNC is the first step in preserving charities' independence and returning their regulatory burden to a reasonable level.

Helen Rittelmeyer is a Policy Analyst at The Centre for Independent Studies and author of Independent Charities, Independent Regulators, released this week.

Balancing the budget

07 February 2014

robert-carling The holidays are over, the Commission of Audit is about to report, and it is time for the Abbott government to go into battle with the budget deficit. While the task is daunting, it needs to be kept in perspective.

The best available measure of the budget deficit is Treasury's estimate revealed in the Mid-Year Economic and Fiscal Outlook (MYEFO) in December. The MYEFO tells us there is a structural deficit of 3 – 4% of GDP in 2013-14, which under current spending and tax policies will shrink to a little under 2% of GDP over the next three years, and then gradually to around 1% of GDP in the early 2020s.

The structural budget result is the deficit or surplus remaining after the temporary effects of economic booms and slumps are stripped out. Although the government talks about achieving a surplus, a structural surplus is neither necessary nor desirable; a structural balance between spending and revenue is the appropriate target, which means that the actual budget result will swing between deficit and surplus depending on cyclical conditions.

Clearly a fiscal adjustment (reduction in the structural deficit by reducing spending and/or raising revenue) is needed at this time. One of the key questions for fiscal policy is the time frame for achieving that adjustment. Reaching structural balance over three years would require an adjustment of a little less than 2% of GDP spread over that period; achieving it over seven years would require only 1% of GDP.

The attraction to politicians of a longer-term target is obvious, but there are too many uncertainties and political risks over a seven year horizon. An adjustment of 2% of GDP over three years seems about right. That represents around $30 billion a year in 2013-14 terms. Although this sounds huge, it is comparable to adjustments made in Australia in the mid-80s and mid-90s.

All of the adjustment could and should be achieved by reducing Commonwealth spending as a share of GDP, which has rarely been higher than it is now. Carving 2% of GDP out of Commonwealth spending over three years would be consistent with the CIS' TARGET30 campaign, which highlights the benefits of reducing government expenditure at all levels of government to no more than 30% of GDP over ten years. This would not just allow budgets to be balanced; it would also create room for sustainable tax reduction.

Robert Carling is a Senior Fellow at The Centre for Independent Studies.