Government pours $11m back into TVNZ

By RUTH BERRY

The Government has agreed to give back nearly a third of TVNZ's latest annual dividend and the company has pledged to put most of the $11.4 million into local drama and children's programming.

The returned dividend comes on top of $23.3 million of public money already paid to the state-owned broadcaster, some of it through NZ On Air and some directly from the Government for charter programming.

TVNZ's latest annual report complained that it was contributing more to the Government than it was receiving from public sources and argued that all of the dividend should be reinvested in programmes.

Broadcasting Minister Steve Maharey announced yesterday the Government had agreed to return $11.4 million plus GST, as extra funding to help implement the charter.

The figure was arrived at after the company's capital costs were deducted.

TVNZ would not spell out last night what new programmes might now be financed, saying that would prejudice its launch today of its new summer series.

But chief executive Ian Fraser dismissed suggestions the money might end up being little more than a hand-out, simply disappearing into TVNZ's coffers.

"The money will go into new programming, as the current charter money goes into new programming."

The charter with TVNZ requires the company to balance commercial performance against social responsibility and make a more significant contribution to the country's cultural and national identity through programming.

TVNZ's dividend to the Government last year was $37.6 million.

Mr Maharey and Finance Minister Michael Cullen, TVNZ's two shareholding ministers, said the dividend requirement was consistent with other elements of the Crown's portfolio of assets, such as crown research institutes, which were required to return their cost of capital to shareholders.

The extra money had to be used for charter initiatives and this would be subject to a memorandum of understanding with the Culture and Heritage Ministry, which monitors charter spending.

Mr Maharey said this arrangement would continue subject to next year's profits and TVNZ spending the money as it had indicated.

Mr Fraser said he was delighted with the decision, but he made it clear TVNZ would lobby for a greater share of the dividend in future.

The capital charge regime "is a way of maintaining a fiscal dividend on the company, which I guess is why you have it, in conjunction with the charter".

"But what I think we will be looking to do is to continue to negotiate with the Government what the appropriate cost of capital should be for TVNZ."

The decision reflected the Government's confidence in TVNZ's charter work so far and its "aspirational" target of reaching 50 per cent local programming.

TV3 chief operating officer Rick Freisen said initiatives to help local programming were fine, "but too often we see funds just kind of disappearing and I think there needs to be some very clear accountability".

"If you are going to spend $11 million, you should be able to name those shows and they should be different programmes than they are running currently.

"What they have tended to do is to take the existing programmes that were on before the charter and then just say, 'This is charter'."

National broadcasting spokeswoman Georgina te Heuheu said the Government had already poured millions into the state broadcaster.

"National believes there are independent producers employed outside TVNZ who are just as keen to tell real New Zealand stories."

TVNZ received $420.2 million in revenue last year, $23.3 million of it from the Government.

This included $13.3 million paid directly to the state broadcaster for charter programming and $15 million from NZ On Air and Te Mangai Paho.

Its advertising revenue rose by $30 million to $335 million.

Mr Fraser denied TVNZ was not accountable.

"Every cent of money the Government is making available will go on-screen," he said, "and we will be accounting for it."