Australia Network Axed, Screen Australia Funding Reduced in Australian Government Budget

Australian government budget cuts could threaten production of films like 'The Rover,' which was financed by agency Screen Australia.

Public broadcasters the Australian Broadcasting Corp and the Special Broadcasting Service are also feeling the crunch from tough government budget cuts.

Pan Asian television service Australia Network is to be axed by the federal government, it was announced on Tuesday.

Public broadcasters the Australian Broadcasting Corp (ABC) and the Special Broadcasting Service (SBS) will also have their baseline funding cut by AUS $43.5 million ($40.8 million) or one percent over the next for years, and film and TV agency Screen Australia will lose $35.7 million of its funding also over the next four years.

The key measures are part of the federal government's inaugural budget statements for the fiscal year 2014-15, in what commentators have marked as the toughest Australian budget since 1997.

The biggest cut is with the closure of the Australia Network, which comes as the service was negotiating a major content agreement for its programming to China via the Shanghai Media Group.

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Foreign Minister Julie Bishop said the government would terminate the Australia Network contract with the ABC, saving the government $185 million over nine years.

The network is operated by the ABC under a contract with the Australian Department of Foreign Affairs and Trade. The service had been extended in 2013 for another ten years.

The conservative government, which came to power last September, has consistently maintained that the service is not "fulfilling the Australian Government's foreign policy objectives."

"The Australia Network has failed to deliver a cost-effective vehicle for advancing Australia's broad and enduring interests in the Indo-Pacific region," Bishop said, explaining the move.

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ABC managing director Mark Scott said Tuesday that the axing of Australia Network "sends a strange message to the region" and bucked the trend adopted by many G20 countries to use media outlets for so-called "soft diplomacy."

"The decision runs counter to the approach adopted by the vast majority of G20 countries who are putting media at the center of public diplomacy strategies to engage citizens in other countries," he said.

"It sends a strange message to the region that the government does not want to use the most powerful communication tools available to it to talk to our regional neighbors about Australia," Scott noted.

He said Australia Network's agreement with the DFAT was "based on broadcasting, online partnerships and social media was proving successful. This decision cannot be justified in terms of performance against agreed priorities."

Australia Network and the ABC share some resources including correspondents in the region. Their future is now unclear.

Elsewhere, the ABC and SBS will have one percent or $40.8 million of their base funding cut over the next four years. The ABC will get $33.5 million less over the next four years while SBS will get $1.88 million a year less. The government says this is a "down payment on the ABC and SBS Efficiency Study."

Communications minister Malcolm Turnbull said in a statement that he expects the broadcasters to find the savings themselves. "This budget measure does not constitute an ongoing efficiency dividend on the ABC and SBS. The exact implementation of the savings arising from this measure will be determined by the boards and executives of the national broadcasters," he explained.

"The Government is confident that the broadcasters can improve work practices and operate more efficiently in their day-to-day operations, without cutting their diverse range of programs and services or affecting their editorial independence," he added.

Scott said the $40 million in operational funding cuts will be "disappointing for audiences" and warned that there would be redundancies and a reduction in services as a result of the cuts.

"The task ahead will be extremely challenging for ABC management and staff," said Scott. "We will need to make funding cuts, while trying to also save money to invest in new priorities to ensure the ABC remains a compelling feature of the Australian media landscape -- a public broadcaster in the digital era."

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Arts Minister George Brandis has not isolated Screen Australia from cuts, pulling $4.9 million out of it's budget this year, rising to $6.5 million a year over the next four years, totaling $23.5 million. In addition, the agency's games initiative will be terminated one year ahead of schedule -- saving $1 million -- while a four year interactive multi-platform funding initiative will close in 2017-18.

Screen Australia received nearly $94 million in funding from the federal government in 2012-13, and around $56.4 million of that goes to direct production funding. CEO Graeme Mason was philosophical about the cuts, announcing the agency would undertake a comprehensive review of all programs and how they are delivered.

"Screen Australia, like other government organizations, has been required to contribute to balancing the federal budget. We will undertake a comprehensive review of all programs and how they are delivered," Mason said.

"We will maintain our commitment to working efficiently in order to minimize the impact on the Australian screen sector. We will focus on our core business to support culture, innovation and quality on Australian screens."

Screen Australia's executive director of guild, Matthew Deaner called the cuts "disproportionate," and called on the  government to ensure the ABC, SBS and Screen Australia "have a workable timetable to enact required efficiencies without compromising their ability to develop, fund and commission Australian screen content."