TVNZ meet staff over $25m budget cut

Television New Zealand plans to have a detailed proposal of how it will cut $25 million off its budget by mid-month.

Chief executive Rick Ellis was meeting staff to update them about the state broadcaster's financial situation but no detail was yet being put to staff, a TVNZ spokeswoman said.

She said standard cost cutting had been done and a detailed proposal would be ready mid-month.

TVNZ last month revealed advertising revenues were 10 per cent below budget, which represented an annualised shortfall of income of $30m. Staff cuts have not been ruled out.

Broadcasting Minister Jonathan Coleman this afternoon reiterated Prime Minister John Key's position that TVNZ was still expected to pay a dividend.

Asked if it would make sense to suspend the dividend to save jobs during the recession Dr Coleman said that wouldn't happen.

"We do expect to get a dividend back from TVNZ and we've got confidence (in) the senior business people there that they are going to take the steps appropriate in this environment to make sure the taxpayer gets a return on a taxpayer investment," he told reporters.

In the year to June 30, 2008, the broadcaster paid the Crown a dividend of $10.3m after reporting an after-tax profit of $19.4m.

TVNZ will decide this year's dividend after the annual accounts are audited around August. The company has a policy of paying a dividend of 70 per cent of profit after tax.

Dr Coleman said it was a difficult time for TVNZ.

"It's not going to be an easy environment for TVNZ but I am sure they are going to take the decisions necessary to continue to be financially viable as well as keep as many people possible employed at TVNZ."

It was up to senior management where cuts were made.

"It's going to be an interesting challenge for them but they do have to identify areas where they can make savings cause they are facing such a tough economic challenge."

- NZPA