10. Employee Provisions

Recognition and measurement

Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts. Other long-term employee benefits are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

Leave liabilities are calculated based on employees’ remuneration at the estimated salary rates that will apply at the time the leave is taken, including the employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination. The calculation is based on the anticipated length of time taken for an employee to fully settle his/her leave entitlement.

The liability for long service leave has been determined by reference to the work of an actuary, PricewaterhouseCoopers Securities Ltd. The liability for long service leave is the present value of the estimated future cash outflows to be made by the Corporation resulting from employees’ services provided up to 30 June 2020.

The estimate of the present value of the liability as at March 2020 considers attrition rates and pay increases through promotion and inflation. A discount rate of 0.6% per annum was applied to calculate the present value of the liability (2019 1.2%).

This discount rate is based on the Commonwealth Government bond yield for a bond with a similar term to the liability.

Redundancy

A provision is made for separation and redundancy benefit payments. The ABC recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

ABC employees are members of the Commonwealth Superannuation Scheme (CSS), Public Sector Superannuation Scheme (PSS), the Public Sector Superannuation Accumulation Plan Scheme (PSSap) or another non-Commonwealth Superannuation fund.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other non-Commonwealth funds are defined contribution schemes.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The Corporation makes employer contributions to the employee defined benefit superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Government of the superannuation entitlements of the Corporation’s employees. The Corporation accounts for the contributions in the same manner as contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2020 represents outstanding contributions at the end of the period.

Expenses

Expenses attributable to the aforementioned employee benefits and provisions are reported in Note 3A Employee benefits.

Assumptions surrounding uncertainty – Measurement of leave liabilities

The discount rates used in valuing leave liabilities are based on Australian government bond rates with maturities that closely align with the length of the liability. The ABC regularly reviews leave liabilities and impact of any adjustment to bond rates on these balances.

Leave liabilities are also impacted by assumptions surrounding future salary inflation. The ABC regularly monitors factors that are likely to impact future salary inflation.

11. Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of the Corporation.

The Corporation determined key management personnel as the members of the Board, the Managing Director, Content Team Directors and the Chief Financial Officer. Remuneration of key management personnel is reported below with prior year remuneration of those individuals no longer considered key management personnel included in “Other”.

Notes on remuneration

a. All Executive Managers and Board members served for the full financial year. Executive Managers Michael Carrington, Melanie Kleyn and Judith Whelan all served in their roles for part of the financial year in the prior year.

b. “Other” comprises prior year remuneration of those individuals who departed the Corporation in 2019.

c. The above table is prepared on an accrual basis, including remuneration at risk. Remuneration at risk is recognised in the period in which the decision to pay the entitlement is made.

Other long-term employee benefits: Long Service Leave reflects the estimated entitlement to long service leave that was accrued during the period, calculated in accordance with the methodology explained in Note 10 Employee Provisions. This includes changes to the value of an employee's accrued leave entitlement that resulted from a change in their salary during the period.

d. The above key management personnel remuneration excludes the remuneration and other

benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set

by the Remuneration Tribunal and are not paid by the Corporation.

e. Remuneration of the Chair and Directors of the Board is determined by the Remuneration Tribunal. In addition to the remuneration of the Chair and Directors of the Board disclosed above, the Board incurred travel and other expenses of $311,228 (2019 $324,678).

f. The aggregate remuneration of other Senior Executives and Other Highly Paid Employees is

published in the ABC's Annual Report.

12. Related Party Disclosures

Related party relationships

The Corporation is an Australian Government controlled entity. Related parties to the Corporation include Key Management Personnel, the Portfolio Minister and other Australian Government entities as well as those entities controlled, or jointly operated, by the Corporation.

Directors of the Corporation

The Directors of the Corporation during the year were:

• Ita Buttrose (AO OBE) (Chair)
• Dr Kirstin Ferguson;
• Peter Lewis;
• Donny Walford;
• Dr Vanessa Guthrie;
• Georgina Somerset;
• Dr Jane Connors (staff elected);
• Joseph Gersh (AM);
• David Anderson (Managing Director)

Transactions with entities controlled by the Corporation

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Transactions with related parties

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.

Considering relationships with related parties, and transactions entered into during the year by the Corporation, it has been determined that there are no additional related party transactions to be separately disclosed.

Controlled Entities

Music Choice Australia Pty Ltd and The News Channel Pty Limited

These companies are wholly owned subsidiaries of the Corporation that did not trade during the year ended 30 June 2020 and have been dormant since 2000.

ABC AustraliaPlus (Shanghai) Cultural Development Co., Ltd (AustraliaPlus)

This company is a wholly owned subsidiary of the Corporation, incorporated in the People’s Republic of China. This company did not operate during the year ended 30 June 2020.

Related Parties

The Corporation is involved in the following joint arrangements

Relationships and transactions with parties to Joint Operations

The Corporation has commercial relationships determined at reporting date to be joint operations. The Corporation’s interests in these entities are accounted for applying proportionate consolidation in accordance with AASB 11 Joint Arrangements.

The Corporation’s interest in MediaHub is included in the Corporation’s financial statements under their respective categories. Interests in Freeview Australia Limited (Freeview) and National DAB Licence Company Limited (DAB) are not material.

ABC employees who are directors of the aforementioned entities are neither remunerated nor receive any other benefits from these entities.

All transactions with parties to Joint Arrangements were at arm’s length. No dividends were received from any of these entities in 2020 (2019 nil).

Summarised financial information of MediaHub Australia Pty Limited

MediaHub Australia Pty Limited

MediaHub is a joint operation between the Corporation and WIN Television Network Pty Ltd (WIN) to operate a custom designed play-out facility for television presentation.

Both the ABC and WIN own an equal number of ordinary shares in MediaHub. The ABC also owns Class B shares in MediaHub which do not confer an ownership interest. The ABC has made a cumulative net capital contribution of $19,928,793 (2019 $19,044,703) to MediaHub.

Two ABC employees are directors of MediaHub.

Freeview Australia Limited

Freeview is a joint operation between many of Australia’s free-to-air national and commercial television broadcasters to promote consumer adoption of free-to-air digital television within Australia.

The ABC jointly controls Freeview and holds 160 $0.10 shares at 30 June 2020 (2019 160 $0.10 shares) equating to a 16% (2019 16%) share. At 30 June 2020, two ABC employees (2019 two) are directors of Freeview.

The Corporation contributes towards the operational costs of Freeview in proportion to its shareholding and may also provide other operational services to Freeview as required.

The Corporation did not receive any material income from Freeview. The ABC paid $527,027 in 2020 (2019 $772,592) towards the operational costs of Freeview. These costs did not constitute a capital contribution and were recognised directly in the Corporation’s Statement of Comprehensive Income.

National DAB Licence Company Limited

DAB is a joint operation between the ABC and Special Broadcasting Service (SBS) to hold the digital multiplex licence. The ABC and SBS each hold one $1 share in DAB at 30 June 2020 (2019 one $1 share each). Two ABC employees are directors of DAB.

DAB is not a party to any service contracts for the provision of digital radio and does not receive the funds for digital radio operations/broadcast from the Government as these are paid directly to the ABC and SBS.

The ABC made contributions of $7,250 towards the operational costs of DAB in 2020 of which $250 related to 2019 (2019 $6,126). The amounts paid were recognised directly in the ABC’s Statement of Comprehensive Income.