I'm sitting here upsetting myself with numbers.
Not just because I'm terrible at numbers, but because these numbers represent so much.
Quibble all you like about my priorities, tell me that 5% isn't much, that this government has cut other programs by more in the last year, and that commercial media organisations have lost more in the last ten… but I happen to be passionate about the ABC. I care about its work and its people. I care about what it can do that other organisations can't or won't. I care that it is a crucial part of Australian culture, expression, and democracy.
These are back-of-the-envelope calculations based purely on public sources. Don't depend on them for policy (or career) planning.
A 1% efficiency dividend announced in the May 2014 budget as a "down payment" on further cuts.
An effective cut of about 2% due to the cancellation of the Australia Network contract by DFAT, announced in the May 2014 budget.
A cut of about 5% over 5 years, finally announced last week, which completes the "down payment".
The 1% efficiency dividend was a 2014-15 budget measure, structured over 4 years. That's $35 million over 4 years.
The Australia Network was cancelled 1 year into a 10 year contract. It was given 90 days from the budget, but ultimately closed in late September 2014. Transition costs were underfunded by about $5 million, affecting the 2014-15 bottom line. There's $11 million listed in the 2014-15 budget for the Australia Network, but that's the wind-up.
The 4.6% cut is structured over 5 years, from $0 in 2014-15 to $68 million in 2018-19. But that 4.6% becomes about 5.1% when implementation costs are included, and they are generally most costly at the beginning of a transition (read: redundancies, cancelling contracts). It's highly likely that, much like the Australia Network transition, the government's estimate is lower than the actual cost of implementation, which will further affect the 2014-15 bottom line.
How does the ABC spend its money?
Here's some fast facts on how the ABC budget is spent, from the 2014 Annual Report.
Over 80% of government funding is spent on non-transmission related activities.
33.9% is spent on Television Programs Produced (including News)
18.8% is spent on Radio Broadcast (including News)
About 47% of government funding is spent on employees.
The ABC employed 5444 people, or the full-time equivalent of 4679 people
65% of ABC employees were directly involved in content making
51% of ABC employees work in NSW
22.48% of employees work in News
21.57% of employees work in Radio
19.58% of employees work in Resources
7.67% of employees work in Television
What efficiencies did the Lewis review identify?
The only practical information that we have about the Lewis review is that it identified about $59 million in potential annual recurrent savings, and it would cost more than $76 million to implement them. That's a rubbery figure, because those findings were never meant to be tallied up in the first place.
But it gives us an impression of the findings versus quantum of cuts. Over five years:
Lewis review, total: $219 million ($59 million each year, minus $76 million implementation costs)
Turnbull cuts, total: $295 million ($254 million over five years, plus estimated $41 million implementation costs… and there'll probably be more)
Again, it has to be stated that the Lewis review findings were not meant to be tallied like this. Without public access to the report, it's hard to say what a more realistic combination of the findings might look like, apart from "less than that".
But clearly, the Lewis review findings are insufficient numerical or political cover for the government's cuts.
Claims and counter-claims
Communications Minister Malcolm Turnbull claims that the Lewis review identified enough potential cuts to "back office" spending that ABC management would have no reason to cut programs. Indeed, he would like voters to blame management, not the government, if there are any cuts to programs.
On the other hand, Managing Director Mark Scott claims it's not that simple, that cuts to "back office" spending have an impact on the kind of content you can make.
For example, if you close a regional newsroom because you can't fund the supporting headcount, you are less likely to cover stories in that region, or covering them may be more expensive.
Another example is the Lewis review suggestion to abandon Digital Radio. That's going to save 2% of transmission costs (so about 0.38% of total budget), of which any savings go directly back to government anyway!
But if you don't spend any money on digital radio transmission, there's less incentive to invest in digital radio content like Double J. It would still be available via digital television and online streaming, but you can see the broader context of what might naively be regarded as "just back office" or "just infrastructure" cuts.
Which brings us to an important point: The only way Malcolm Turnbull's percentages add up is if his cuts apply to the total government funding of the ABC, including transmission costs. But those transmission costs are unlikely to change much, and as noted above, any savings there are owed to the government anyway.
So the 5% cut disproportionately affects the 80% of ABC expenditure not related to transmission, making it closer to a 6% cut (on average, over 5 years) on the things you care about, like people and programs, and everything that supports them.
To put this in context, CSIRO is suffering a 3% cut. The ABC is taking something closer to an 8% cut. Every agency has to do its fair share, right? No wonder so many people regard the ABC cuts as a punitive, political act.
How might the Turnbull cuts be distributed?
Until management proposals become public some time after 11am tomorrow morning, the most we have is rumours and the knowledge that cuts can't be distributed equally.
For instance, you can't just say, "Let's take that 6% out of People & Learning!" It represents 1.42% of employees and definitely less than 6% of expenditure of an organisation that is… shall we say… somewhat human resources challenged.
When it comes to content, consider television. It represents 7.67% of employees, but 33.9% of expenditure. How likely is it that there'll be a one-to-one relationship between those figures? Highly unlikely. The ratio between people and production is just so varied. "Redfern Now" has significant production costs, but the related ABC salaries support many other external productions. NewsCaff has a different balance.
It's also unlikely that you'd be able to cut half an employee, half a program, half a regional office, or half a newsroom. As a result, cuts tend to be more (for want of a better word)… coarse.
Cutting 6% of staff and production costs for one program might simply make it unviable, at least in its current state. It may be more appropriate to make substantial changes in one place, so that you can make smaller changes elsewhere.
That said, there's a lot of things we know won't be cut. Everything announced for the 2015 television slate, for example. That's all bedded down, production costs spent, etc., although they may suffer on the promotion front.
But the easiest, most politically palatable thing to cut is that which no one will miss: Development of new programs. It's great that the 2015 slate looks so good. What of 2016? What will we never see?
Early Monday morning, many ABC employees will discover the personal impact of these cuts. At 11am, staff around the country will watch an internal briefing by Mark Scott to find out management's cost-cutting proposals.
Although it has been called an all-hands briefing, it won't be everyone.
There'll be someone sitting behind the News 24 desk, and in the News 24 control room.
There'll be someone sitting behind a microphone and another behind a sound desk in every radio station around the country.
There'll be someone making sure that everything's on air, that all the automated control systems are working, and that web sites are online.
There'll be sleep to recover after working a shift that is incompatible with humane office hours.
There's studio time booked, programs to shoot or record, sets to bump in and out, vision to edit, packages to file before deadline.
Employee and supplier contracts to check, redundancy cheques to cut.
Locations to get to, people to interview, sound to record, vision to shoot, stories to be told, events that won't wait, reports to file, live crosses to schedule and meet.
There's mail and visitors to accept, phones to answer… and so much more.
These staff, doing their jobs knowing that changes are unfolding without them, will have to watch the briefing afterwards. They'll have to catch up later to process everything with their colleagues.
Much like there were ABC staff doing their jobs on Friday, Saturday and Sunday, knowing they had ominous meetings booked for early Monday morning.
And there'll be former staff -- including 80 lost in September when the Australia Network contract was cancelled -- watching old colleagues go through the same thing they did.
It's not going to be a pleasant Monday.
But at least we'll finally know exactly who and what we're fighting for.
