$11million question

FIJI Broadcasting Corporation (FBC), the name as we know it today, came into existence after the Legislative Council passed the Broadcasting Commission Bill in 1952. It began operation in 1954 and quickly became the only source of news for the majority of households in Fiji.
Later, it was renamed Island Networks Corporation Ltd in 1998 during the then government’s public sector reform program. The following year, in June 1999, the name was changed to Fiji Broadcasting Corporation Ltd.
FBC is entirely government-owned and is regarded as a government commercial company under the Public Enterprise Act. It operates a network of six radio stations in trilingual transmission. In 2011, it started a TV station.
Two of the stations and the TV station are classified as public service broadcasting stations. Public service broadcasting is governed under a contract between the Government and FBC. The other four stations are supposed to be operated as commercial radio stations, that is, to be funded by advertising revenue and sponsorship.
The radio broadcasting scene in Fiji also consists of Communications Fiji Ltd (CFL) which began with a commercial radio station in 1985. Today, CFL operates five radio stations in Fiji providing an option for listeners. Then there is Fiji Television Ltd, which operates a free-to-air station.

Public service broadcasting

FBC has been mostly making losses recently (see Table 1). FBC radio and TV revenues have been extracted from annual reports and are approximate values only. It also receives a fee or compensation from the government for providing public service broadcast.
How much money is FBC receiving from the government? Government budget papers show these figures: (2015-2016 = $7.2 million), (2016-2017 = $11.2m), (2017-2018 = $11.2m).
However, FBC annual reports show for 2015 as $2.9m. For 2016, it is $11.2m divided into $6.6m for FBC TV and $4.6m for two radio stations. In other words, public service broadcast fees have increased by around $8m in 2016.
FBC also took a $22m loan from the Fiji Development Bank towards a major broadcasting infrastructure upgrade to the radio network and to start a new television station in 2011.
We really have to understand what we are talking about here. It is an additional $8m of taxpayers’ money. Now, it is for the Government, including the opposition (as well as the Public Accounts Committee), to tell us why this amount was increased from $2.9m to $11.2m. There are many questions that taxpayers should be asking such as:
– Is this additional $8m of taxpayers’ money to cover for FBC’s losses and show that it is making a profit?;
– Is the rise in losses from 2012 due to the TV station? If it is, was it a prudent decision to start a TV station?;
– Or is this additional $8m of taxpayers’ money to pay for FBC’s debt repayments?;
– Were losses budgeted for by expecting that revenue will increase in future?; and
– Or were losses budgeted for by knowing that public service broadcasting fee will increase in future?

Is funding worth it?

Let’s ask the $11m question — for that is the sum the Fijian taxpayers forked out most recently to fund two radio stations and FBC TV. Two important questions:
Is the service delivering value for money, or not?; and
Does it represent a good return for the resources allocated to it?
These are not easy questions to answer. One way to look at answering these questions, which seems reasonable given the tone of the criticism that the FBC has been receiving, is to compare its revenue and costs against those of commercial rivals. Table 1 provides some data on revenues for comparison and analysis.

It should be noted that CFL is competing against a government-subsidised FBC. The subsidy gives FBC a huge commercial advantage.
From the FBC annual reports, it is not clear how much radio revenue is contributed by the four commercial stations compared with the two stations which received $4.6m in 2016. Thus it is not clear whether the four commercial radio stations are self-funded or whether there is cross-funding.

Additional issues

If FBC is to continue to provide public service broadcast programs, it will need money to continue to do that. As a government commercial company, it is required to operate purely on commercial objectives and make profits.
The social objective fulfilled by FBC is compensated by the Government. There is no argument about this.
However, where is the fair balance between commercial revenue and taxpayers’ $11m?
It is perhaps time for FBC to separate the public service broadcast from the commercial arm. Then only, we can truly figure out the costs and revenues of the two components of the operation.
Fiji is not a rich country. Approximately, one third of our people live below the poverty line. We cannot afford excesses without considering the efficacy of public spending. For this, Parliament needs to establish an independent committee to look into the structure and operations of FBC.
The $11m taxpayers’ money that FBC received from Government is recorded as revenue. With this, it will be easy to show that FBC is making a profit of just over $4m. However, something is not right when a government commercial company uses arbitrarily determined fee to show a profit.
With all these questions and issues, FBC will also need to improve the accountability to the people of Fiji. The annual report of FBC looks very much like a financial report. It might be a good idea for the Public Enterprise Minister to set a standard annual report format, where some basic information is contained in all annual reports.
Also, as a public broadcaster, FBC belongs to the people of Fiji. It must therefore be independent and must be accountable for the work it does. As a result, FBC must not be perceived or seen as toeing the government line. When it comes to public interest journalism, FBC must always be fair and balanced.

* Dr Neelesh Gounder is a senior lecturer in economics at USP. These are his views and not of The Fiji Times or of USP.