Lewis Review Efficiency Study released as budget cuts announced

Communications Minister Malcolm Turnbull has released the executive summary of The Lewis Efficiency Review, as the same time as announcing a 5% cut to the national broadcasters ABC and SBS.

The review says there is an ongoing imperative on the broadcasters, as with all government agencies and authorities, “to use these resources as efficiently as possible with the flexibility to respond to audience demands and technology changes.”

In the time available, the study was not able to “form a definitive view on every aspect of the broadcasters’ operations,” but  it identified “a wide range of potential efficiencies for both broadcasters.”

“The study focuses on tactical elements of achieving efficiencies rather than a more in‑depth structural and strategic review but does point toward a range of areas for further exploration by the broadcasters where future additional efficiencies may be able to be made.”

The study identified five key areas that may lead to significant operational efficiencies or savings:

  • Working together—efficiencies from greater operational cooperation between the ABC and SBS, while retaining their separate and unique programming identities
  • Harnessing technologies—efficiencies from technology use in the businesses and retiring older technologies
  • Modernising the business—efficiencies from better integration of the national broadcasters with the wider broadcasting and productions sector, in keeping with contemporary business practice
  • Revenue opportunities—opportunities for the national broadcasters to earn additional revenue in ways which are consistent with their Charters  
  • Better resource allocation—efficiencies from better matching supply and demand in service delivery.

Read the executive summary here.

In a speech today in Adelaide, making the report’s summary public, and detailing the planned cuts, Minister Turnbull made the following comments:

It is the responsibility of any incoming Government to look carefully at the range of activities that taxpayers fund, and ask the tough questions. Is an expenditure serving the public interest? Does it represent good value for taxpayers? Can the objective be achieved more cost-effectively, or a better outcome be delivered at the same cost?

In every portfolio, across every spending program, we’ve had to look closely at what we do and how we do it. In my own portfolio that includes our national broadcasters—the ABC and SBS, which receive $1.4 billion every year from the Government.

After working closely with the broadcasters for the last 8 or 9 months it is clear that there is a great opportunity for them to modernise their businesses without reducing the resources they have available for programming; in other words without reducing the quantity or quality of what Australians view and listen to on ABC or SBS.

This is what productivity is all about—getting the same, or ideally, a bigger bang for a smaller buck.

The commercial broadcaster’s revenues are a function of its ratings—simple. The ABC’s are a function of its ability to persuade the Government of the day to give it money. The commercial broadcaster’s core KPI, like any private sector firm, is its profitability. The ABC’s KPIs—set out in its charter, are much more subjective than a line in an income statement…


Some have pointed to a statement made by Tony Abbott on the eve of the election that there would be “no cuts to the ABC or SBS.”


These remarks need to be understood in context. Prior to the election many people (including competing media groups) urged the Coalition to take an axe to the ABC in order to curtail their on-air and online activities.


Both Joe Hockey and I made it quite clear we had no plans to make cuts of that nature at the public broadcasters—but if there were to be savings made across the board, the ABC and SBS could not expect to be exempt from the obligation to contribute by eliminating waste and inefficiencies.


Unless you believe that Mr Abbott was, in that one line, intending to contradict and over rule the very careful statements of intention made by Mr Hockey and myself, his remarks can only be understood in the same context, which left open savings of a kind which would not diminish the effective resources the ABC and SBS had available to produce content…

In its 146 pages the Lewis Efficiency Study discusses 48 operational activities across the ABC and the SBS…

What about Programme Cuts and Changes?

Ever since the prospect of these savings has been raised the ABC, or people claiming to speak for the ABC, has suggested that this or that programme will be a casualty.

At one point even the beloved Peppa Pig was said to be facing the axe! And then when that strained credulity, Tony Jones and Lateline were substituted for the pig only to be followed by the Stateline versions of 730 on Friday evenings.

Let me be quite clear. The savings announced today are not of a scale that requires any particular change to programming. All of the savings can be found within operational efficiencies of the kind canvassed in the Lewis Efficiency Study…


Read Malcolm Turnbull’s full speech here.

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