The ABC's outgoing managing director Mark Scott has called for a "grown-up conversation" about merging the nation's two public broadcasters, arguing it could save the Federal Government $40 million a year.

Key points: Mark Scott makes case to merge ABC and SBS

Mark Scott makes case to merge ABC and SBS Says both could offer distinct brands, argues move would save $40m a year

Says both could offer distinct brands, argues move would save $40m a year Warns against further funding cuts to ABC

In his last National Press Club address as ABC boss, Mr Scott also made the case for the Government to at least maintain the ABC's current level of funding, warning the only way the broadcaster will be "strong and relevant" in the future is with adequate financial support.

Earlier this month, Mr Scott questioned whether there was still a need for both the ABC and SBS and today he revealed he discussed the idea of merger with his now retired SBS counterpart.

"Some years ago, towards the end of his term as SBS managing director, Shaun Brown and I had a number of conversations about how a peaceful merger might work," Mr Scott said.

"One that would safeguard a distinct identity and remit for SBS and allow the public broadcasters to be more distinctive, in clearly delineated spaces — with no overlap.

"But it wasn't to be. The idea was rejected at the SBS board level and Shaun wasn't given license to pursue the conversation further. It ended there."

Mr Scott told the Press Club that conversation needed to be refreshed and he proposed a kind of "friendly merger" that would preserve each broadcaster's identity while delivering substantial savings.

"By coming together, SBS and the ABC could still offer distinct brands under distinct charters," he said.

"But it could be done without an entire separate back office, stand-alone buildings, studios and technology, IT, legal, finance, HR and corporate divisions — or a separate board.

"We could spend more of the funding serving audiences."

Merge could save about $40 million

According to Mr Scott, merging the two broadcasters would save about $40 million of the $1.3 billion spent on public broadcasting each year.

"Increasingly, the ABC and SBS have tripped over each other, as each strives to meet audience and programming needs best, to maximise audience engagement," he said.

"At times we've even bid against each other for programs and content — and there have been scheduling frustrations as well.

"This has increasingly been the case as SBS has moved away from multi-lingual programming on its main channel in recent years as it pursues advertising revenue."

Mr Brown said in a statement that he and Mr Scott had indeed had "informal discussions about the most effective model for public broadcasting in Australia".

"We felt it would be possible to create a merged public broadcast entity that not only maintained but actually increased the range and distinctiveness of content and services that met the charters of both organisations," he said.

"Removing duplication of infrastructure and operations would free up significant funds for investment in distinctive content and enhanced services.

"Above all we believed such a model would be sustainable, ensuring the survival of a vigorous public broadcasting service in Australia. I also believed the savings would be sufficient to remove the obligation on SBS services to carry advertising.

"It was our joint view that at the very least such a proposal deserved proper investigation. That was my recommendation to the then chairman of the SBS Board, Joe Skrzynski. It was not accepted."

Scott makes case against more funding cuts

Mr Scott made his speech as the Federal Government finalises the ABC's funding arrangements for the next three years.

Mr Scott noted the Gillard Government gave the ABC an extra $20 million a year during the last funding round, and urged the Coalition to maintain that funding.

"That News funding represents 10 per cent of the ABC's News budget, and to cut it now will mean significant cuts to jobs and programming," he said.

"If it was not renewed, it would represent the third substantial cut to the ABC's budget since the Coalition Government was elected on a platform not to cut the budget."

Since the Coalition Government was elected, Mr Scott said the ABC's funding had been cut by $350 million.

"The ABC's share of Government expenditure is effectively at its lowest level in decades now and the per capita spend on public broadcasting is significantly lower than many other nations, and dramatically lower than the BBC," he said.

"The greatest challenge to the future of the ABC, ironically, comes from those who fund it on behalf of its owners.

"Today's Government. Future governments."