Padraic P. McGuinness, “Why not pay for the ABC?,”
The Australian Financial Review, February 26, 1988, pp. 88-87.

Why not try applying the user pays principle to the Australian Broadcasting Corporation? After all, while there is a case for minority and supposedly quality radio and television, there is no good reason why it should be free of charge.

Of course, the ABC is not free. Assuming its own calculations are correct — and given its record of bias in other areas there is every reason to doubt it — the ABC already costs every man, woman and child in Australia 8c a day. Of course this is in any case a dishonest statistic, since it assumes that everybody benefits. In fact according to the latest TV ratings, less than 10 per cent of the Australian population watches ABC television.

If this figure applies to the total audience for the ABC as a proportion of the whole population, it implies that each ABC viewer/listener is costing the taxpayer about 80c a day, and is being subsidised to the extent of about 72c a day. And since what is known about ABC audiences shows that they are highly skewed towards the higher income groups, the ordinary wage earners are subsidising those richer than themselves.

So even if there is a good case for exempting the ABC from the need to earn its living by selling advertising time or by accepting sponsorships, the question of whether the ABC in its present form, or indeed any other form, ought to be paid for out of general taxation revenue remains open.

There is no good case for suggesting a return to the old licence fee. This represented a tax on the general audience for radio and television which served to subsidise the 10 per cent or so who wanted to use the ABC. It gave them no more choice about the mix of services provided by the ABC than does the present system of paying for it out of general taxation revenue.

However, there is certainly a case to be made against insisting that the ABC or any part of it should carry advertising. The commercial TV stations in particular are bitterly opposed to advertising on the ABC. They are already competing hard for the limited advertising dollars, and certainly do not want any more competition.

That, in itself, is no reason to refuse the ABC the option of taking advertising.

Nor is the fact that many of the existing licence holders paid large sums of money for their licences a good reason. They were given no guarantee — nor should they have been — that their licences gave them any more than the right to broadcast during good behaviour. They are naturally terrified at the prospect of more licences being issued, or of the creation of any more markets for TV advertising. But those who live by government monopoly have no right at all to insist that it continue.

In general, the more commercial TV stations there are the better. There is certainly room for a few more in the capitals, and in any case national regulations is rapidly becoming obsolete as the potentialities of satellite reception increase.

There is, nevertheless, a case for having one or more TV channels which do not carry advertising. But the case for having these free of charge is not obvious. The alternative to advertising or sponsorship is subscription television. There is now no technical reason why the ABC TV should not commence to be paid for by viewer subscription. The practicalities of this were examined in the UK in 1985 and discovered to present no difficulty.

And France has had for some years a broadcast subscription TV channel, Canal Plus, which is quite successful. In the case of cable TV, subscription presents even fewer problems. There is therefore no good reason why ABC TV should not become a subscription service, so that those who enjoy it, or cannot stand advertising, could pay for it by the month. (It would cost a lot more than 8c, or 80c, a day.)

Once this step were taken, it would no longer be obvious — indeed it is not obvious now — why the present monolithic broadcasting corporation should continue in its actual form.

Perhaps there is a case for having a national TV network. That could be one corporation. Perhaps also there should be a national radio network. That could be another.

The ABC campaign to throw Parliament off the second network is an impertinence. The ABC enjoys the use of the Federal parliamentary broadcasting frequency by grace of Parliament, not the other way round.

If the ABC does not like that, let it cede the time when Parliament is not sitting to somebody else. Or use the time when one of the houses is not being broadcast live to broadcast recordings of the proceedings of the other house.

The Government is considering the idea of funding what it sees as “core” activities, like news and public affairs, and letting the ABC seek advertising or sponsorship to fund the rest.

There may be a better way of approaching the issue. There is indeed a case for a national news and public affairs service which is not controlled by any existing newspaper or broadcasting group. One way to approach this would be to hive off these services from the ABC, and let them operate together or separately as a news gathering and production unit, selling their services to broadcasters. Subscription and advertising broadcasters could take these services, the cost of which would be offset by advertising/subscription receipts.

There may be a case for total or part government funding of such services. But again, there is no reason why they should not be in competition for at least part of their revenue with the news and public affairs services offered by the commercial sector. The model for this kind of thing has already been established in the field of business news by production companies like Broadcom.

So perhaps what is needed is not an argument about the desirability or otherwise of advertising on the ABC, but a reconsideration of the whole question of the structure and financing of the ABC, with final delivery being paid for by subscription or advertising — or even in some cases by government subsidy.

The end result of this approach would be not a single ABC, but several government-owned broadcasting and production units, some national, some regional. Broadcasting and production do not have to take place within the same organisation, let alone under the same roof.

It may well emerge that the same range of services, and of considerably higher quality, not to mention fairness and openness to differing views, could be achieved simply by splitting the ABC into perhaps a dozen different and independent units with the same proportionate budget as at present. Competition is always a useful spur to efficient use of funds.

But as the managing director of the ABC, David Hill, has realised, there is not much use broadcasting at all if hardly anyone watches or listens. Too many aspects of the ABC output cater to tiny coteries of the privileged.

(in order of appearance on Economics.org.au)
  1. Where Friedman is a pinko
  2. The Economic Guerrillas: A lecture in honour of Maxwell Newton
  3. The Libertarian Alternative
  4. Libel laws block insider's revelations of Australia's industrial mess
  5. But perhaps the merchants of doom have a point
  6. The Origins of Paddy McGuinness
  7. The Itch for Influence
  8. LA safe from religious poverty
  9. Aunty should hang up her boots in face of premature senility
  10. Warning: health is a budget hazard
  11. New ABC Tory chief won't rock the boat
  12. Time to sell the ABC
  13. Youth victims of the welfare con
  14. Paddy McGuinness on class sizes (1991)
  15. More teachers won't solve the problems in our schools
  16. Paddy McGuinness on Catholics and wealth distribution
  17. Paddy McGuinness proposes inheritance tax equal to handouts received by deceased
  18. Let them swim nude
  19. Time to legalise heroin
  20. State-sponsored sports rorts
  21. The blight of the baby-boomers
  22. To reduce the problems of crime and corruption, legalise heroin
  23. We should ban Olympics
  24. Evidence shows heroin policy is not working
  25. Wowsers deny society while killing children
  26. Will Australia compete?
  27. Canberra's social revolution
  28. Paddy McGuinness in 1994 on the 2012 class size debate
  29. Why not pay for the ABC?
  30. Paddy McGuinness on David Stove
  31. Sometimes the truth hurts
  32. Paddy McGuinness on compulsory, informal and donkey voting, and breaking electoral laws
  33. Thomas Sowell, McGuinness, Aborigines and other minorities
  34. Genocide with kindness
  35. Hyde, McGuinness and Sturgess on Chaining/Changing Australia
  36. Paddy McGuinness defends comparing IQ of races
  37. Do-gooders should glorify smokers
Powered by Hackadelic Sliding Notes 1.6.5