The late Bill Toft, doyen of NZBC TV newsreaders who, like all of them, also worked in radio.

The TVNZ-RNZ merger proposal announced yesterday includes a departure from traditional broadcasting funding in New Zealand, which would see the entity be dependent for its funding on the Minister of Broadcasting on a year by year basis.

Currently, RNZ’s funding is disbursed by the independent body, NZonAir, and TVNZ relies on commercial revenue.

The proposal to merge the publicly owned radio and tv broadcasters takes New Zealand back to 1975 when the New Zealand Broadcasting Corporation (NZBC) was disbanded, and radio and TV went on their separate ways.

But a merger brings New Zealand into line with most Commonwealth public broadcasters such as Australia’s ABC, Canada’s CBC or Britain’s BBC, which incorporate both radio and TV.

However, the proposal raises questions about the potential political independence of the new entity.

As an example of what that might mean, the previous National Government, unhappy with what it claimed was a left-wing bias at Radio New Zealand, froze its NZonAir funding from 2008 until 2017, forcing it to sell land and even pianos to stay afloat.

Now TVNZ will also be dependent on whoever is the Minister for a good chunk of its funding.

The Business Case Governance Group (BCGG) report chaired by former NZ First MP Tracey Martin, which commissioned the business case for the merger, raised questions about how the funding might be delivered.

It appeared to reflect the practice in Australia with the ABC, whose funding is allocated on a three-year basis.

“Certainty of funding may also assist in the production of content,” it said.

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“At present, NZ on Air funding is accessed annually, and it can be difficult to ensure the availability of scarce and costly talent to produce the two (and 3) seasons of shows.

“Being able to enter arrangements for a ‘season and a half’ could reduce fixed costs and ensure the availability of both production and creative talent.”

The BCGG undertook some targeted consultation with various industry, Maori and general public stakeholders and found there was strong support for editorial independence from the Government.

“There was some discussion of how this could be enshrined beyond the provisions of a charter, including through funding being decided by/channelled through an independent body, bulk funding/multi-year funding that is protected against election cycles, and whether there is a need for some sort of monitoring entity to stand in between the new entity and Parliament,” the BCG report said.

Faafoi said yesterday at the launch of the proposal at the Christchurch Broadcasting School that Government funding decisions would be made as part of the Budget process.

But in his Cabinet paper, Broadcasting Minister Kris Faafoi ignored this view and suggested that a Ministerial Budget allocation along with commercial revenue would reduce complexity.

“I recommend that the entity receive core baseline funding directly through an appropriation administered by Manatu Taonga (Ministry of Culture and Heritage),” he said.

“This funding would be supplemented by commercial revenue.

“This model would provide a degree of funding certainty for the entity and reduce complexity, compared to a model where the entity had to seek contestable public funding as well as commercial revenue.” 

However, he did agree to statutory guarantees of editorial independence.

The entity’s organisational form as an Autonomous Crown Entity would provide the public media entity with significant operational independence, including a degree of protection from inappropriate direction in relation to editorial matters. 

“However, there is a need for the public media entity to have specific statutory protections over and above this, just as RNZ and TVNZ currently have.

“These protections should include protections relating to Ministerial direction and protections relating to the removal of Board members (to prevent Ministers exercising editorial influence by removing Board members in relation to editorial matters).”

He said that the Bill governing the merged entity should require responsible Ministers to exercise their powers and functions in a way consistent with the entity’s editorial independence; prevent responsible Ministers giving certain directions to the entity relating to editorial matters and prevent responsible Ministers removing members from the entity’s board for any reason relating to editorial matters.

But as National showed with Radio New Zealand, editorial interference can be much more subtle and allowing the Minister of Finance to determine funding on an annual basis would give any Government a powerful lever to keep the merged entity on side.

In essence, yesterday’s announcement is a long-overdue admission that the 1988 Rogernomics-inspired deregulation of the broadcasting sector did not work.

The original idea was that TVNZ would be left free to compete commercially and that the public broadcasting function would be transferred to the New Zealand Broadcasting Commission (NZ on Air) who would disburse funds to enable public TV programming to be made.

But there was a fundamental culture clash.

As TVNZ chased commercial revenue, it became reluctant to programme the kind of less commercially appealing programming associated with public broadcasting. Slowly it dropped niche arts and science programming along with long-form political interviews and current affairs investigations. A vigorous documentary commissioning slate ended around 2008, and the prime time 7.00 p.m. current affairs show was dumbed down to infotainment.

There were political pressures too – again from the last National Government who wanted NZonAir to demonstrate that its funding provided value for money by relating funding to the size of the audience  a funded programme won.

The Clark Government tried to introduce a Charter, but there was no accompanying mechanism to ensure it was adhered to; TVNZ then established two “public” channels, TVNZ 6 and 7, but though they were fell funded, it refused to promote them at all on the grounds that they might cannibalise their commercial revenue earning audiences.

But under Faafoi’s proposals yesterday, there would now be two public broadcasting bodies; the merged entity and NZonAir.

Faafoi addressed this in his Cabinet paper but concluded that any impacts on NZ On Air’s role or on the broader production sector were likely to be relatively minor as long as:

NZ On Air and the new public media entity “work collaboratively to identify and/or minimise duplication and gaps in the provision of public media content across all providers.”

The Cabinet paper addressed a long-standing grouch of the private sector (including FrontPage, the owner of this website) and said there were clear expectations that the new entity would not bring significant amounts of content production in-house. 

(This compares with the BBC, which has specific targets of commissioned programming that it has to meet).

Overall, the business case and Faafoi at his launch of the proposal at the Christchurch Broadcasting School yesterday said the reasons for doing it were simply that commercial revenue for TVNZ was in decline (as it is for all linear broadcasters)  and that many niche audiences were not being well served by TVNZ as was now constituted.

The proposal now goes to an Establishment Board, which will include representatives from TVNZ and RNZ for further development.

The board will have an independent chair, but the accountability requirements in the board’s terms of reference are hardly encouraging for anyone looking for real political independence.

“The Chair, on behalf of the Establishment Board, is to observe the “no surprises” convention in relation to the Minister,” the terms say.

“The Chair is the spokesperson for the Establishment Board. The Minister is to be informed of any public comment either prior to or as soon as possible after comment is made. All written press releases will be provided to the Minister in advance.”