2016/17 Annual review of Radio

New Zealand Limited

Report of the Economic Development, Science
and Innovation Committee

March 2018

Contents
Recommendation .................................................................................................................. 2
Introduction ........................................................................................................................... 2
Financial performance........................................................................................................... 2
Radio New Zealand’s role as an independent broadcaster ................................................... 2
Māori strategy ....................................................................................................................... 3
Radio New Zealand’s resilience across its network ............................................................... 3
Reaching Pacific communities .............................................................................................. 4
RNZ+ .................................................................................................................................... 4
Accuracy of news .................................................................................................................. 5
Future programming and content .......................................................................................... 5
Appendix ............................................................................................................................... 6
2016/17 ANNUAL REVIEW OF RADIO NEW ZEALAND LIMITED

Radio New Zealand Limited

Recommendation
The Economic Development, Science and Innovation Committee has conducted the
annual review of Radio New Zealand Limited for 2016/17, and recommends that the
House take note of its report.

Introduction
Radio New Zealand (RNZ) is a Crown entity established under the Radio New Zealand Act
1995. It broadcasts in New Zealand over three networks: RNZ National, RNZ Concert, and
an AM network that broadcasts parliamentary proceedings. It also broadcasts internationally
via its overseas shortwave service, Radio New Zealand International.

RNZ is owned on behalf of the Crown by the Minister of Finance and a shareholding
Minister. The board is chaired by Richard Griffin, and Paul Thompson is the chief executive.

Financial performance
In 2016/17 Radio New Zealand received total income of $39.017 million, 1.4 percent more
than in the previous year. Government funding and fees provided 92 percent of this income.
Its total expenditure was $38.981 million―9.6 percent less than in the previous
year―resulting in a net operating surplus of $36,000. This was achieved despite some fiscal
challenges, such as unbudgeted redundancy payments, and the effect of the November
2016 Kaikōura earthquake on operations.
During 2016/17 RNZ made a successful budget bid for an increase in baseline funding of
$2.8 million per annum. This was its first increase in funding for nine years. The sale of its
Auckland property included a commitment from the Crown to further increase baseline
funding by $700,000 per annum, partly to compensate for the additional rental costs it would
incur. These funding increases, together with management’s continued focus on
sustainability and efficiencies, provide RNZ with a more financially sustainable position.
However, despite the increase in funding in future years, RNZ continues to operate in a tight
fiscal environment, and is forecasting low operating surpluses until 2020.

Audit opinion
The Auditor-General issued an unmodified audit opinion. It graded RNZ’s management
control environment, its financial information systems and controls, and its performance
information and associated systems and controls as “good”. The Auditor-General has
recommended that some improvements be made in in all areas relating to management
control, financial information and systems, and performance information.

Radio New Zealand’s role as an independent broadcaster

We heard that RNZ’s role as an independent broadcaster is pivotal to the way it operates.
When covering political news stories, RNZ aims to be fair and balanced and include opinions

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from both the Opposition and Government of the day. RNZ’s programme “The House” looks
at legislation, issues, and insights from Parliament, and over time it aims to cover all issues
and include all political opinions.

RNZ told us that the Minister of Broadcasting, Communications, and Digital Media and
Government Digital Services does not have an influence on the content it produces. We
heard that the Minister had recently had an unplanned meeting with the head of content from
RNZ. RNZ said that it was not concerned about this particular encounter given its context,
but believed it was inappropriate. RNZ added that, under the previous Government, its board
members and members of its senior leadership team would presumably have met with the
Minister on occasion.

The protocols around meeting with ministers and political transparency have been clearly
outlined to senior members of staff since the incident.

Māori strategy
In 2016/17, Radio New Zealand developed a new, long-term strategy that represents an
increased commitment to creating high-quality Māori content, supporting te reo Māori, and
fostering Māori journalism. RNZ said it had taken small steps in its Māori strategy, but
accepted it had not gone far enough and it plans to do more.

The aim for RNZ is to develop Māori content, language, and Māori talent within the
organisation so that it is enduring. The use of te reo Māori on air has grown and RNZ intends
to continue to increase this. RNZ established the Henare te Ua Māori journalism internship in
February 2017 as a training and development programme. We heard that the internship had
been a great success and RNZ will be taking on a new intern for 2018 soon.

RNZ has a strategic partnership with Te Māngai Pāho (the Māori Broadcasting Funding
Agency) which has been running for 18 months. The two Crown entities have been working
together around collating information on stories. Within the scope of the relationship is the
possibility of iwi radio stations creating stories for Radio New Zealand. We heard that while
RNZ thinks that the relationship with Te Māngai Pāho is blossoming at a low level, both
entities also need to remain distinctive.

We look forward to hearing more about RNZ’s new Māori strategy at next year’s annual
review.

Radio New Zealand’s resilience across its network

RNZ has a specific role under the Civil Defence Emergency Management Act as the
designated Lifeline Utility radio broadcaster in the event of a civil defence emergency. We
asked what resilience plans RNZ has in place to cope with adverse weather events and
emergencies.

We heard that, since the Kaikōura earthquake in November 2016, additional plans have
been put in place for Auckland to cover for RNZ’s Wellington operations. This includes
growing the programming staff in Auckland. We heard that if either Wellington or Auckland
were affected by a major event, the other would be able to step in and carry out RNZ’s role
under the Act. RNZ also said that a lot of people go to its website during an emergency, so it

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has also upgraded its computer infrastructure. It is now able to publish content to its website
from any of its centres.

RNZ is confident it will be able to continue broadcasting in the event of an emergency. We

heard that RNZ has made a budget bid to improve its resiliency.

Asset management
The Office of the Auditor-General has recommended that Radio NZ consider the value of
implementing an asset management plan because of the ongoing need to replace old
technology with new assets. RNZ said that it has a “horses for courses” approach to asset
management, but it does not have the capacity within the company to have an overarching
asset management plan. We were concerned to hear this, as we believe an asset
management plan should form part of all organisations’ strategies for forward planning and
resilience.

Reaching Pacific communities

RNZ says it remains focused on being an essential public service for New Zealanders and
for Pacific communities in New Zealand and the Pacific. RNZ Pacific provides
comprehensive coverage with Pacific news stories and an online news archive. Seventeen
Pacific radio stations also rebroadcast RNZ Pacific.

RNZ told us it is committed to increasing the diversity of its audience, especially within the
Pacific community, but it has not been able to do as much work in this area as it hoped
because of a lack of funding. RNZ said that increasing the diversity of its audience reach is
one of its major goals, and with additional support and funding, it would be able to improve
content for smaller and under-served audiences.

In January 2017, the Australian Broadcasting Corporation (ABC) ended its shortwave
service to the Pacific. We asked RNZ what effect this decision will have on radio
broadcasting to the Pacific region. RNZ told us that its Pacific programme is now the primary
independent news source that is broadcast on shortwave throughout the region. This is
important for RNZ, because in times of civil defence emergencies, shortwave is sometimes
the only way information can be relayed to those affected. We also heard that RNZ has a
cyclone watch service and it works closely with meteorological services throughout the
region to broadcast cyclone warnings.

The bulletin produced by RNZ to the Pacific continues to be delivered in the languages of
different Pacific nations.

RNZ+
Before the 2017 general election, the New Zealand Labour Party said it would provide
additional funding worth $38 million for New Zealand programming and journalism. Part of
this funding would include the development of RNZ+, a multi-media service including a free-
to-air non-commercial television channel.

Radio New Zealand told us that RNZ+ will be an opportunity for it to access more media
platforms because there will be more funding available to do so. The service will provide an

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expanded range of high-quality programming content, which RNZ hopes will attract new and
more diverse audiences. The delivery of RNZ+ will be televisual, but it will not be a stand-
alone TV station.

Accuracy of news
In a listeners and users survey conducted by RNZ in 2016, 89 percent of participants said
that RNZ provided accurate news. We asked RNZ whether it was concerned that 11 percent
of its users did not think it provided accurate news. RNZ said that it was very pleased with its
score of 89 percent, as a key priority for the organisation is to provide accurate and credible
news. However, RNZ acknowledged that there is always room for improvement.

RNZ has a complaints management service that assesses all of the complaints it receives,
including complaints about the accuracy of the news. It reports to the chief executive.

Future programming and content

RNZ aims to keep its future programming and content relevant to as many New Zealanders
as possible. RNZ says it will retain its stable delivery of services, but will also experiment
and innovate. It sees this as a way to remain relevant and to retain and grow its audience.
An example is its work around podcasting, which makes all of Radio New Zealand
International’s programmes available as podcasts. Programmes are available at any time for
users and have been a great success with younger audiences.

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Appendix

Committee procedure
We met on 1 and 22 March 2018 to consider the annual review of Radio New Zealand
Limited. We heard evidence from RNZ and received advice from the Office of the Auditor-
General.

Committee members
Jonathan Young (Chairperson)
Tamati Coffey
Hon Jacqui Dean (until 21 March 2018)
Paul Eagle
Andrew Falloon (from 21 March 2018)
Hon Christopher Finlayson (until 21 March 2018)
Hon Paul Goldsmith (from 21 March 2018)
Gareth Hughes
Melissa Lee
Clayton Mitchell
Dr Parmjeet Parmar
Hon Aupito William Sio

Advice and evidence received

We received the following documents as advice and evidence for this annual review. They
are available on the Parliament website, www.parliament.nz.

Office of the Auditor-General, Briefing on Radio New Zealand Limited, 1 March 2018.

Office of the Clerk, 2016/17 Annual review briefing paper, 1 March 2018.

Radio New Zealand Limited, Response to committee questions 1-106, 26 February 2018.

Radio New Zealand Limited, Response to additional committee questions 107-123, 19

March 2018.