In this story

Just before Christmas, ABC news director Gaven Morris and one of his offsiders, Bruce Belsham, called together about 20 senior reporters and executive producers. They had bad news. The Turnbull government was refusing overtures to discuss the national broadcaster’s 2016 budget.

However, they assured the gathering that in assessing any future cuts, it would not be a case of “last on, first off” – that they should not assume any of the initiatives developed as a result of the Gillard government gifting ABC News $20 million in 2013 for three years would be scrapped. One of those was the fact-checking unit.

According to an authoritative news division source, the timing was “determined by the government; it’s their budget not the ABC’s.”

The Gillard government money had also enabled the establishment of national and regional reporting units, with a brief to break exclusive news as well as enhance regional and suburban reporting.

In the New Year, however, the landscape started to change. Figures familiar with the ABC’s internal discussions say that after pressure from the board the government agreed to revisit the triennial funding and the ABC began negotiations.

The ABC produced a list of what would be cut if it did not retain the full $20 million. Fact Check was on the list, and that document became central to negotiations with the government. The negotiating team was headed by the managing director’s chief of staff, Michael Millett.

The fact-checking unit was especially vulnerable because the ABC thought it needed a big-ticket item that could be sacrificed to show the national broadcaster understood the need to accept some “pain” in a generally constrained budget environment. The fact checkers took heart, though, from assurances that it would be left to incoming managing director Michelle Guthrie to determine where the axe would fall, not to her predecessor, Mark Scott, who would leave in the days before the budget.

As Scott told Media Watch at the end of March: “If we don’t get the news money, jobs will go ... and that will be an early issue that my successor has to work with.”

However, whatever the details of those budget discussions, the fate of ABC Fact Check was sealed before Scott left the broadcaster’s Ultimo headquarters. The ABC retained $13.5 million of the triennial funding – a cut of $6.5 million rather than the whole lot, as its executives had feared, but Fact Check was the chief casualty.

The enhanced regional reporting capacity, a favourite of the Nationals, emerged unscathed. The national reporting team lost four positions.

The decision to scrap Fact Check is believed to have divided ABC News executives and, in the words of one senior insider, is “not a good look” for the national broadcaster.

According to an authoritative news division source, the timing was “determined by the government; it’s their budget, not the ABC’s.”

This suggests the government wanted an iron-clad guarantee that Fact Check would be closed down before putting the $13.5 million in the budget, rather than waiting until Guthrie had been installed.

The same source indicated that preserving regional and suburban coverage was another pre-condition of the deal, pointing to Morris’s announcement to news staff on May 18 that: “Under our proposal, the state digital teams, suburban bureaus and regional reporting and operational resources would not be affected.”

As independent senator Nick Xenophon has noted, the unit is “a thorn in the side” of all politicians and its scrapping “a backward leap for accountability”.

ABC Fact Check, headed by experienced journalists Russell Skelton and John Barron, was established in 2013 as a direct result of the Gillard government’s $20 million. Its initial budget was $1.5 million, but that was cut sharply in subsequent years.

According to the ABC, the fact-checking unit has conducted more than 400 fact checks over the past two years without having to retract any of its findings, however much they may have offended politicians. Now costing no more than $1 million to run – a drop in the bucket in the context of the ABC’s total news budget – efficiencies alone could have ensured its survival.

1 . ‘An ABC fact’

In the days when independent fact checking was starting to become the rage, I had a conversation with Mark Scott in which I asked him about his plans. I warned him of what I saw as the danger of an exclusively ABC fact-checking set-up triggering what I dubbed “an ABC fact”.

“What’s that?” he asked.

“A contestable fact,” I replied. “One that can be questioned by ABC sceptics.”

Far from insulating the ABC from allegations of bias, it would merely compound the issue. Scott asked me what we should do. I suggested the ABC provide seed funding and organisational support for an independent fact-checking commission or foundation, nominate a board of eminent Australians, and invite the commercial television networks, as well as News Corp and Fairfax, to join as foundation members. Any of them could commission facts to be checked.

The initiator would get first crack at the results, which would then be available to all. Other news organisations could commission and pay for individual fact checks. Importantly it was a structure broadly based enough to ensure rigour, inform the public and insulate the media generally from politicians trying to escape the consequences of their unsupported promises. Scott’s response was a noncommittal, “Interesting.”

He went on to set up Fact Check and its findings have been contested every inch of the way. Its presence did nothing to diminish the attacks on the ABC for bias.

Whatever the quality of its findings, Fact Check was through no fault of its own a victim of the ABC silo syndrome. The 7pm TV news remains the broadcaster’s flagship program and yet Fact Check findings never became a regular part of its menu, integrated into its broader reporting. Nor did its presence reduce the numbers of errors in reporting across the corporation or ever more complicated arrangements for upward referral of editorial decisions.

2 . Fierce scrutiny

The Australian Broadcasting Corporation spends $1 billion of taxpayers’ money every year. It is also the most trusted media outlet in the country. As such it gets – and deserves – a level of scrutiny afforded no other media organisation.

Independent fact-checking organisations started to flourish in the early years of this century as journalists such as David Broder from The Washington Post and Bill Adair of the Tampa Bay Times became frustrated with the uncontested “he said, she said” nature of political reporting, which had become more prevalent as the pace and pressure of United States electoral campaigns intensified.

As Peter Fray, a former editor at News Corp and Fairfax who established the pioneering PolitiFact Australia in 2013, puts it: “The caravan moves on. No one has the time to call out the lies. One half-fact overtakes the last with no proper scrutiny.”

Inspired by the impact of PolitiFact and other similar organisations in the US, Fray hired a team of journalists, notably David Humphries, Jennifer Cooke and Chris Pash, and set about correcting this shortcoming. He approached media figures including then News Corp CEO Kim Williams and then ABC news director Kate Torney with proposals to underwrite and support his operations heading into the tumultuous 2013 election, suggesting they provide funding for an independent fact-checking unit using the road-tested US PolitiFact model.

Eventually, Fray struck gold with the Seven Network, which came up with the bulk of the $350,000 needed to fact check 227 political statements in the six months leading up to polling day in September 2013.

He and then Seven news director Rob Raschke recall that network chairman Kerry Stokes was enthusiastic about the initiative over the objections of some of his executives who were worried about the impact on the network’s advertising and its corporate relations with politicians. Raschke remembers that journalistic éminence gris Peter Meakin, then at Seven, was especially delighted at finding a new and user-friendly way of putting politicians on the spot. Political statements were rated True, Mostly True, False and Pants on Fire, a category reserved for statements described by Fray as being “very special examples of the political art”.

Raschke, now with Sky News Australia, admits that while fact checking provided a valuable point of difference for Seven News, a “buzz” as he puts it, its impact was not easily quantifiable. It also annoyed some politicians sufficiently to make their anger known to network executives already nervous that PolitiFact findings could bring retribution from Canberra.

Seven pulled the pin shortly after the election and Raschke believes the ABC’s entry into the field provided “a neat way out” for apprehensive suits. Fray admits he did not pay sufficient attention to the business side of the enterprise, but wonders whether the entry of the ABC behemoth is consistent with free and fair competition. Raschke is more scathing. He says the ABC’s behaviour was “arrogant”. As events have demonstrated, the national broadcaster had no long-term commitment to fact checking and its presence “squeezed out any other player”.

But Fray has not given up hope of resuscitating his dormant organisation and is in active discussions with at least one significant media organisation about fact checking the current election. He says a flaw in the ABC Fact Check methodology was that it was neither structured nor transparent enough – that its judgements nominated as “exaggerated” or “not quite right”, for example, were too open to interpretation.

“Rubbish,” is the sharp response of Skelton, stating that “in three years, ABC Fact Check has never had a formal complaint about lack of transparency”.

“All our sources are laid out in plain sight… Verdicts are nuanced to fit the findings and not shoehorned into a tabloid ‘truth-o-meter’. ABC Fact Check is concerned with the claim, not the personality or organisation.”

While ABC Fact Check will be closed in July, fact checking survives. The university-backed website The Conversation and Guardian Australia are in the field, albeit less systematically than the ABC and PolitiFact.

But there is a broader question about the perils of tied funding for the independence of the ABC, which was first accepted by the national broadcaster during the Keating years.

In 1970 the Gorton government’s postmaster-general, Alan Hulme, sent the then ABC chairman Robert Madgwick a letter saying the budget would be cut by $500,000 – and that half the reduction was to be suffered by current affairs programs. Madgwick and his fellow commissioners condemned the proposal as “completely unacceptable” because it would compromise independence and the ABC’s right to determine its own programming priorities.

“The time had come,” Madgwick said, “when we had to dig in our toes.”

Hulme backed off. How times change.