In the past decade multiculturalism across Western nations has come under sustained critique and attack from its political opponents. It has been asserted that multiculturalism leads to the creation of ghettos and segregated communities, which undermine liberal democratic values and heighten the risk of attraction to extremist violence, particularly in regard to Muslim communities. The ferocity of these attacks has led many scholars to claim that multiculturalism is ‘in retreat’. But such claims have rarely been tested as they relate to publicly funded government agencies and institutions. These are key sites governing the daily practice and representation of multiculturalism that impact on populations in everyday life. In the Australian context, the Special Broadcasting Service (SBS) is a pivotal example of a multicultural institution, with its programming and community engagement widely considered among the world’s best practice in promoting pluralism and respect between cultures. In more recent times, however, a series of controversial episodes on the network’s flagship ‘ideas forum’, the Insight television program, have led to anger in Australian Muslim communities, and a boycott by a variety of community leaders, academics and activists. This study reveals a notable shift away from the core values of multiculturalism in the SBS and Australian society.