Privatise the ABC?

The Australian has a debate on privatising the ABC with Peter van Onselen providing the ‘yes‘ argument and Rebecca Weisser providing the ‘no‘ argument.

Both arguments are unsatisfying.

PvO’s point boils down to ‘here is an asset that the government can sell and use the money to pay down debt’ type argument.* He also points to the annual running costs of the ABC as a budget saving. He is unconcerned about the left-wing bias at the ABC. I don’t actuallt disagree with the notion that the government should privatise the ABC, or that public debt is a problem, or that the $1 billion or so the government pumps into the ABC could be better used as tax cuts, for example.

The problem with this sort of argument is that there is no mechanism is place to restrain future government debt. So selling the ABC to pay for Swan’s irresponsible spending spree may get us out of a debt and deficit hole now, but without a fiscal constitution that restrains future debt and deficit the underlying problem remains. Using privatisation proceeds to validate past consumption is a case of eating our capital. So selling the ABC having already spent the money on school halls and pink-batts (the public equivalent of wine, woman and song) doesn’t address the spending problem.

Rebecca has a far more interesting argument and, while I don’t agree with it, I suspect it will carry the day. Her point boils down to a ‘the ABC is a civilising institution of society’ type argument.* She is concerned about left-wing bias at the ABC. So while the ABC is a civilising institution it isn’t performing as it should. Rebecca’s argument is profoundly conservative (in a Burkean sense) and it will appeal to many on that basis.

So her solution to the problem of the ABC is a good hard solid dose of reform.

To my mind the problem is that this has already been tried and failed. John Howard gave this a red-hot go. He did not succeed. In my opinion he failed because the problem had been misdiagnosed. This isn’t just a problem of poor governance – although that does contribute. This is a problem of incentive structures and organisation.

Both Hayek and Schumpeter have developed theories as to why intellectuals are likely to have left-wing views. Schumpeter’s is a theory of incentives; intellectuals are forever questioning and attacking social institutions. Hayek provides a psychological argument—intellectuals are rationalist and require detailed explanations of all phenomena. It is not enough that something should work in practice; it also needs to work in theory. Hayek makes the prediction that the more intelligent an educated person is the more likely they are to hold left-wing views.

So an organisation like the ABC (like universities and the public service) is always likely to have a left-wing bias. But hang on you say – what about other media organisations or other service industries dominated by intellectuals, they aren’t all dominated by left-wing views. No they aren’t. They are dominated by consumer choice and the need to make a profit. The ABC can get away with its left-wing views because there are no market forces at work, at all, within the ABC. When there is no market consequence to people giving full expression to their own preferences why would we ever expect they would change their behaviour?

The ABC cannot be reformed from within – if you are concerned about left-wing bias then commercialisation is the answer to that problem.

* Neither of them use that terminology. That is what I understandd their arguments to be.

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51 Responses to Privatise the ABC?

  1. Snoopy

    From ABC Online’s Just In…

    Voters across the Northern Tablelands region in New South Wales will today decide who will fill the vacancy left by Richard Torbay’s sudden departure from state politics.

    With the popular independent out of the picture, the Nationals see it as a chance to regain their foothold in the notoriously conservative electorate.

    (My bold)

    Shameless and irredeemable.

  2. lem

    Sinclair Davidson, you’ve done it again:

    “without a fiscal constitution that restrains future debt and deficit the underlying problem remains.”

    Please, why are we not pushing for some sort of constitutional change to prevent governments from behaving like this latest bunch of loonies ad infinitum? Up until this year I never bothered reading the Australian Constitution, and now having done so I have to say it is a most underwhelming document. Surely the time has come to write into it a clause which allows the sacking of a government before they do too much damage. Get onto it cats.

  3. Boambee John

    To repeat a comment I made on an earlier “privatise the ABC” thread, two short term steps seem likely to help:

    Make ABC On-line (at least theoretically) a pay for access scheme. Reduce the ABC’s budget on the assumption that the current claimed user numbers pay weekly (as an example) the same as users of the on-line version of The Australian. If the ABC chooses to leave the service free, then it absorbs the cost.

    Make News 24 a pay to view TV channel. Again, reduce the ABC’s budget on the assumption that it will charge users (say) $30 a month, “only $1 a day”, again for the latest claimed viewing figures. Add the requirement that all news and current affairs programs be broadcast first on News 24, and not re-broadcast on free-to-air TV for at least seven days, to protect the interests of those who have paid for early access.

    These moves would put some commercial pressure on the ABC to cover a wider range of opinion, to maximise the revenue received. The ABC could, if it was smart (big “if”), increase its audience above the present levels, and come out with additional revenue.

  4. Jim Rose

    a notoriously conservative electorate! what high praise

  5. Gab

    ‘the ABC is a civilising institution of society’

    “Civilising” in what way? Actually with their lefty bias it is more indoctrination that civilising.

    Why do we need taxpayers to fund a government media conglomerate? No lefty has ever answered the question.

  6. Borisgodunov

    Change the constitution totally it was written by little selfseeking politicians and shonky power hungry lawyers,just like the shower in Scamberra today.Strip the power from politicians and courts,suject them to total scrutiny ,and make it immpossible for them to legislate without putting actions to Referenda. Curtail terms in office to one term for life,abolish funding of political parties and groupings,appoint judges on yearly contracts pay them on performance,abolish super and high wages for pollies ,judges and “public servants”,and get rid of ALL untidy nayshuns inspired crap.

  7. Leo G

    “The ABC cannot be reformed from within – if you are concerned about left-wing bias then commercialisation is the answer to that problem.”

    But surely the problem isn’t simply the existence of the ABC’s left-wing bias, but that that bias is driving the ABC to compete with other broadcasters in the ‘commercial’ marketplace. The ABC is forsaking the traditional role of a public broadcaster, belying pretentions to political neutrality in the process.

  8. blogstrop

    … the more intelligent an educated person is the more likely they are to hold left-wing views.

    Nobody here but us bumpkins! Aren’t intelligent people supposed to see the error of their ways by a certain point in life, when the realities bite?

    OK. Can’t sell, can’t reform. Defund by 10% per annum over ten years and force rationalisation and commercialisation.

  9. dd

    The other factor is ‘crowding out.’
    ABC supporters point to the detailed current affairs and social commentary that commercial stations don’t provide.

    However, there’s really no need for anyone else to get into that game because the ABC has it sown up; and even if you did try, then you face an uphill battle against the existing player.

    Today we have multitudes of free-to-air TV channels, pay-TV, and now podcasts as well, barriers to entry are low and the ABC is merely stifling innovation and making it harder for new entrants.

    The most egregious crowding-out occurs with the ABC online offerings, which serve no public good. By definition, anyone who is reading ABC online opinion pieces has access to the internet, and the internet has a wide range of voices, opinions and fora.

    But it’s not just online. For example TripleJ basically wiped out Australia’s once diverse alternative radio scene, replacing it with a state-run monoculture.

    The ABC kids channel crowds out kids programming elsewhere and is in direct competition with Pay TV kids shows.

    News 24 – there’s really no need for this. People who listen to and desire 24 hour news are a small niche market. They can go get subscriptions. Most of us are content with a daily news bulleting and, for free, that’s all that should be offered.

  10. Know It All

    Private media is as left biased as public media. And intelligence is not about thinking. Because all thinking is (without going spiritual) is referencing our personal frame of reference. And that is bounded and well guarded by our beliefs. Knowledge is freeing our minds. And that means having empathy. Which is distinct from that egocentric uttering of compassion that is so in fashion. The media, including the ABC, knows nothing. As such nothing can be done to rectify that that doesn’t start with the individual.

  11. tbh

    I continue to invite rational arguments as to why the taxpayer needs to fund the ABC. With the depth and breadth of the media market in Australia now, why do we still need a public broadcaster?

  12. H B Bear

    Agreed. The ALPBC is a prime example of a hopelessly staff captured organisation. As Howard demonstrated, even if management were minded to reform the place (which they aren’t, are they Mark Scott?) they can’t.

    Sell it if you can find a buyer. Otherwise starve it of funds back to a market failure type broadcaster.

  13. Gab

    Why was the ABC established?

    Hansard, 1923:

    ” A deputation met the Postmaster General recently, and in consequence a number of regulations have been framed which are on the table of the House at present. Unless objection is taken to them by 15th August, they will become law and will have all the force of ‘an Act of Parliament. I have ‘nothing to say against the action of the Postmaster General in endeavouring to establish this system.’ If it is successful it will be a great boon to people who live in the more remote parts of the country. It will increase the pleasure of life to them, and will enable them to obtain information of important matters which occur in the capital cities or in other parts of Australia.

    While the Postmaster-General states that there was no opposition at the time of the conference, we would like to point out that at the conference the public was not represented, and it is the public’s interest that we wish to protect. The only interests that have been protected by the present regulations are any broadcasting station which might start, and there is no limit in the fees that they may demand from the public for their service. In the event of more than one broadcasting station starting and charging for services, the public will have to pay for both broadcasting stations if they desire to listen to both, and so the ordinary working man will be debarred Prom listening in.”

    So to provide a regional service and a free news service. Surely in these times of free-to-air TV and radio, a plethora of stations available for free, plus the Internet and satellites, there is really no need for a taxpayer-funded behemoth.

    Sell off the ABC conglomerate, there is no longer a need for a government run, taxpayer funded news service. Privatise the ABC, it’s time. And use the money from proceeds to fund the NDIS and reallocate ABC funding in the budget for same.

  14. Leo G

    … the more intelligent an educated person is the more likely they are to hold left-wing views.

    The more intelligent, with a wider view, better understand their own position.

  15. dd

    the more intelligent an educated person is the more likely they are to hold left-wing views.

    This is the wrong way around; it’s education, not intelligence, that is the driver of left wing views.

  16. Rabz

    OK. Can’t sell, can’t reform. Defund by 10% per annum over ten years and force rationalisation and commercialisation.

    How’s about 20% pa over five years?

    Ten years necessitates an ongoing massive waste of money the government doesn’t have. I’d rather have it over and done with in half the time, it if can’t simply be shut down – which is my preferred option.

  17. dd

    If the ABC didn’t exist, would we create it today?

  18. Rabz

    This is the wrong way around; it’s ‘education’, not intelligence, that is the driver of left wing views.

    Fixed.

  19. Julie Novak

    “selling the ABC to pay for Swan’s irresponsible spending spree may get us out of a debt and deficit hole now, but without a fiscal constitution that restrains future debt and deficit the underlying problem remains. Using privatisation proceeds to validate past consumption is a case of eating our capital. So selling the ABC having already spent the money on school halls and pink-batts (the public equivalent of wine, woman and song) doesn’t address the spending problem.”

    Thanks for making an important point here. My sense is that past privatisation, here and abroad, was politically informed by a desire to prevent future governments from repeating previous instances of fiscal profligacy, with fewer assets to sell to financially cover for future profligacy.

    However, there was a blind spot in this strategy: the privatising governments of the past made no genuine attempt to enshrine a fiscal constitution, including one importantly animated by divesture of public sector activity (rather than just limiting spending growth).

    Nothing was done by these privatising parties in government, in effect, to invalidate the personal and corporate welfare spending, inflated education and health spending, spending on arts, etc. etc. In fact, by doing nothing to invalidate these through retrenchment, the privatising parties validated the big recurrent-spending agenda of the “guilty parties.” This represented a confirmation of Buchanan’s point that (managerial) socialism might have died, but leviathan lives on.

    I’m strongly supportive of privatising state-media anytime, however, as you rightly imply, selling a few remaining assets, here and there, to help plug the current budget deficit alone won’t head off leviathan’s rummaging through private wallets, and its stampede upon economic freedoms.

  20. Rabz

    If the ABC didn’t exist, would we create it today?

    Exhibit A: The NBN.

  21. Ant

    I’d be happy if they just gave away the ABC for nothing.

    That would be preferable to keeping it under public ownership where it continues to pollute national politics with its hard left agenda.

    Besides, the old Bolshie dinosaurs at the ABC could hardly object given that they’re so opposed to the filthy notion of commercial profits.

  22. Bruce

    Progressives have colonised public service departments, academia and the ABC.

    There is no pretense to balance anymore and they seek to lock all of these organisations in their own hands. Witness Mark Scott’s squirming over the no-conservative-presenters controversy. Witness the Treasury so denatured now that no one believes them.

    This push will continue as it is the raison d’etre of the progressives. This is the age we are in. It will not change while we have this system of government and society.

    Therefore since any publicly funded organisation will be colonised this way, the only thing possible to restore balance is to defund them. If the public purse does not pay, then one sector of the political spectrum will not be forced to pay danegeld to the other.

    As I’ve said before one way to do this would be to sell the ABC to the staff for a dollar. Another way would be to offer it to the Guardian for a like sum, since that would save them all the costs of setting up here in Oz.

    And if either doesn’t want it then put it in receivership.

  23. Rococo Liberal

    Hayek makes the prediction that the more intelligent an educated person is the more likely they are to hold left-wing views.

    Then Hayek was wrong

  24. dover_beach

    This is the wrong way around; it’s education, not intelligence, that is the driver of left wing views.

    This is exactly right, although I would say current education for greater clarity.

  25. jumpnmcar

    What DD said from noon onward !

  26. Filbert

    The Libs lack the guts to privatise the ABC.
    Put Bolta in as a reforming Head of the ABC with power to enforce balance.
    The Leftists will jump ship like rats.
    Those that remain will have to toe the line or face the sack.
    Would make great reality TV too.

  27. Ellen of Tasmania

    This is the wrong way around; it’s education, not intelligence, that is the driver of left wing views.

    “Education without values, as useful as it is, seems rather to make man a more clever devil.”

    C. S. Lewis

  28. Fisky

    It would be a grave mistake to sell the ABC. It might be even more effective in private hands. Instead, we must destroy it and sell all the equipment at a garage sale.

  29. Ellen of Tasmania

    Progressives have colonised public service departments, academia and the ABC.

    “We all want progress, but if you’re on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.”

    C. S. Lewis

  30. Progressives have colonised public service departments, academia and the ABC.

    Accepting that this is the case, what needs to be done, over the next generation to rectify this? How does one even start?

    New public service departments need to be built from the ground up, gradually assuming the functions of existing departments (or jettisoning them). The move to eliminate duplication between federal and state functions is also good.

    Academia needs to be connected far more heavily to commerce and industry, and thus to the profit motive. This probably needs a two term plan to really get going.

  31. Eean Thorne

    G’day Professor Davidson,
    Seems to me this discussion of “privatising the ABC” is starting off with some dubious considerations. Never the less, I believe there is a solution that has never been discussed.
    Laurie Oakes has written today: “Canvassing privatisation of the ABC would be – in the words of an Abbott colleague – “stupid, patently absurd”.

    Apart from anything else, who would buy something that makes no money? A privatised ABC would have to take advertising, and existing commercial broadcasters are already doing it tough.”

    Why sell the ABC for the mystical dollars to help solve the Budget crisis when you could maybe achieve the desired result in a much different way.

    Dispose of all sections of the ABC for a peppercorn amount, with inforceable and clear legistation that regional and other significant national interests be retained with a discussion whether limited advertising should a consideration.

    No sale price (did I hear you say). Again to quote Laurie Oakes “Apart from anything else, who would buy something that makes no money?”

    There is an answer. The Abbort Government should provide to such purchaser funding of say 50% of current funding, with a dedicated reduction to zero in (maybe) 10 years.

    There can be no doubt that a privately run ABC would run much leaner and more efficiently. The Government would save half a billion dollars initally with, over the years continuing savings.

    Privately run we would see a much more diversed set of opinions and the opportunity for a commercial organisation to eventually achieve a profitable position.

  32. boy on a bike

    ABC3 isn’t very civilising. I’ve watched a bit of it with the kids, and 99% of it is no different to the sort of moronic yoof programming you get on Channel 10.

    ABC2 is programmed by milksops, pansies, bedwetters and greentards. Thankfully, they start the morning off at 0600 with Waybuloo, which has wonderfully soothing, trippy music. If you’ve had a long night on the tequila and have woken on the couch with a half eaten hot dog on your chest, it helps to mitigate the headache beautifully. Just don’t look at the cartoon creatures – they’ll give you nightmares for weeks afterwards.

    After that’s over, it is all down hill.

  33. Michel Lasouris

    If the ABC is sold off ( as I sincerely hope it will be) what of all those Left journalists? Will they infest other media and pervert them? Or will they endeavour to start yet another Left media organ?

  34. FM

    Commercialisation won’t necessarily make the ABC less left-wing. After all, they already dominate left-wing media so turning a profit from it isn’t necessarily impossible or a game changer for them. A commercially orientated left-wing media outfit that is nevertheless government owned is just as objectionable. If they must be left or right-wing and not scrupulously fair to all segments of Australian Society, let them be completely private.

  35. kingsley

    I think the weakness to just commercialisation versus full blown privatisation is that as soon as the ALP regain power they will fund it back up again.
    First step though is to make it self funding and then hopefully profitable.

    I do like Ean Thorne’s solution as that would enable you to find a buyer now

    I think that the other issue that needs to be tackled is pointing out to viewers, including I’m afraid conservative viewers that is it fair to blow $1b just so we don’t have to suffer the inconvenience of advertising? I think you will find that is a big reason why a lot of conservative voters still want a Govt ABC not a private one despite the availability of foxtel.

  36. Boambee John

    Eean Thorne @ 1:36 pm:

    I like your solution.

    An alternative (kill two birds with one stone) would be to sell it to Fairfax.

  37. kingsley

    the other issue to hit the ABC with is the contribution of ABC 3 to childhood obesity. They don’t miss their chance to sling mud at McDonalds but how does running a free to air TV channel for all the waking hours and then some for children with an awful lot of the programming of no educational value at all (eg umpteen re runs of Iron Man and Clone War cartoons) aid getting kids up and active? Add this to DD’s points about “crowding out” and a lot of their new offerings really should get the chop

  38. MACK1

    So what does business experience tell us about what works in changing culture? First you can’t do it without the right CEO – and that means the ABC Board choosing someone who is competent and not biased. So we need the right board members with instructions from the government to get the right CEO. Unless you do that, there’s no hope.

    Secondly you outsource as much as possible to get rid of the rank-and-file ideologues and agitators, and to keep everyone on their toes.

    So we know how it is done – we just need a government prepared to do it.

  39. Alfonso

    Correct, Mack.
    Outsourcing solves most cultural problems.
    Divide and conquer.
    But alas, our Tone is not even going to contemplate the horror of the possibility. He shudders like a Fabian at the prospect.

  40. Greg Byrne

    FRASER SHOULD HAVE SOLD IT 40 YEARS AGO. IT IS A DISGRACE.

  41. Rabz MMEC VRWC

    “Canvassing privatisation of the ABC would be – in the words of an Abbott colleague – “stupid, patently absurd”

    Was the ‘colleague’s’ name Malcolm, by any chance?

  42. manalive

    As I’ve said before one way to do this would be to sell the ABC to the staff for a dollar …

    The brand maybe, but surely not the tangibles, real estate etc.
    There are currently about 4,500 staff who would no doubt welcome that idea.
    I like Gerard Henderson’s description of Scott’s role, he pretends to run the place.

  43. Samuel J

    No, do not privatise the ABC. Dismember it and sell of its parts. We do not want a privatised ABC. We want NO ABC.

  44. Simon

    BS. The ABC requires considerably more funding but should in return remove itself from all reporting above the local. Just like the free regional/council newspapers which are its genealogical siblings it should never attempt “big people news”. It’s natural competitors are gay/les arts radio stations and tafe/tech TV networks. If it does produce drama, satire, comedy or other stuff it should be forced to attempt to sell it to rival “popular networks” or drop it as a waste of money.

  45. blogstrop

    Reprise: I don’t care how you do it. Sink the ABC.

  46. cohenite

    The abc is a public service which is no longer needed; I don’t understand what all the angst is about.

    As for “‘the ABC is a civilising institution of society’”; that is complete and utter crap; take me for example; I have been watching the fucking abc for 40 years and you can’t take me anywhere.

    And Hayek and Schumpeter have their heads up their arses about the left-wing.

  47. blogstrop

    As for the commercial media – did anyone hear Mark Riley at Joe Hockey’s Press Club turn ask “how can we help”?

  48. egg_

    So what does business experience tell us about what works in changing culture?

    Agree: top-down approach – ICAM Risk Management 101
    Lest Aunty nosedives into the Grün cesspit forever.
    Outsourcing of “opinion” is mandatory to break up the current echo chamber.

  49. Ross B

    There may have been a time when the ABC served to fill a market where no market really existed. Growing up in a small regional town our old B&W TV from the 70s had only two channels. The ABC provided a balance then I guess. Today there is no compelling reason for a national broadcaster.
    There is very little now that private enterprise cannot supply, and few places it can’t supply. That the ABC now crowds-out private providers in a significant manner is not in dispute. It is unreasonable to dream that a media organisation will not develop a culture of some description and we shouldn’t be surprised the ABC lists heavily to the left. It is time to end the absurdity of a taxpayer funded advertorial unit that only serves to benefit the narrow slither of intesrest in the green socialist left.

  50. Skuter

    The ABC cannot be reformed from within – if you are concerned about left-wing bias then commercialisationSlash. Burn. Salt. Repeat. is the answer to that problem.

  51. Procrustes

    Did you see that twerp Seccombe on Insiders today – maintains that size of Australian government bigger under Howard / Costello than under Labor, can’t be true, esp if you eyeball expense/GDP of statement 10 of the budget papers (table 4)

    The man needs help

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