ABC boss Mark Scott says plans to make the broadcaster produce more local content would force cuts elsewhere.
Independent Senator Nick Xenophon has proposed an amendment to the ABC charter which would enforce local content production quotas across the country.
The ABC has axed a number of local programs and will cut 400 staff after the government reduced its budget by $254 million over the next five years.
The broadcaster has closed its television studio in Adelaide and will base all TV production, other than news and current affairs, in Sydney and Melbourne.
Mr Scott says there is a need to produce more programs externally because the broadcaster can't access funding grants for in-house productions.
"The ABC needs to move in this direction," he told a Senate committee hearing in Adelaide on Friday.
"There is nothing in this model that cuts against the charter in any way.
"If you are trying to curtail us on that, the simple consequence of that is fewer Australian programs on air."
Mr Scott said 154 staff had left the ABC since November out of a total of 287 staff targeted for redundancies so far.
He said local content quotas would reduce the ABC's flexibility and affect its editorial content.
"We think if imposed, it would constitute a significant financial impost and it would reduce the ABC board's independence," he said.
Senator Xenophon questioned why the ABC was driving increasingly centralised production in Sydney despite state-based units' strong local content.
"You're not seriously suggesting this bill would in any way compromise editorial independence," he said.
"We're not telling you what to put in the content."
The bill also calls for state-based weekly 7.30 programs to be reinstated.
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