Hackles up over advertising levy

By KARYN SCHERER

The advertising industry is bracing itself for a battle with the Government over the funding of local television production.

Broadcasting Minister Marian Hobbs has raised hackles by suggesting that a taskforce which is about to be set up to look at funding issues should consider levies on the industry.

She has also suggested that levies on both TVNZ and other broadcasters will be considered.

The options are among a swag of ideas Ms Hobbs wants the taskforce to consider as a replacement for the broadcasting fee.

The Government not only wants to find a replacement for the revenue generated by the fee, but also hopes to boost funding for local production.

Ms Hobbs told the Business Herald there was no question of the extra money coming out of general taxes, or of the broadcasting fee continuing.

"We will look at all sorts of ways of doing it."

One report the taskforce will be asked to consider is by New Zealand On Air, setting out how 10 countries fund local production.

Ms Hobbs acknowledged that levies "send the advertising industry up the wall," but said she expected the taskforce to be hard-nosed in its recommendations.

"Most countries use a mix and we need to have a look at that and see how feasible it is."

The confirmation has come as a shock to the industry, which thought it had scotched levies as a funding option during talks with Labour and the Alliance last year.

It argues that levies would be self-defeating, as advertisers would not boost their budgets to accommodate the extra tax.

It has also warned that the move would simply drive advertisers to other media, such as newspapers.

The Television Broadcasters' Council, which represents free-to-air broadcasters, said yesterday it was unconcerned by the review.

Executive director Bruce Wallace said he was confident the taskforce would conclude that levies were not a sensible option.

However, the executive director of the Association of New Zealand Advertisers, Jeremy Irwin, said the suggestion was of "grave concern" to the industry.

Many overseas companies would stop advertising in New Zealand if they thought it was no longer cost-effective, he said.

The executive director of the Advertising Agencies Association, David Innes, said he was astonished that levies were still being considered.

"It's not hard to view quotas as a revenue-generating opportunity for the local film industry and we're not in the business of buying even more Porsches for the bosses of the local film production industry."