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2016/17 Annual review of Radio New Zealand Limited Report of the Economic Development, Science and
2016/17 Annual review of Radio New Zealand Limited Report of the Economic Development, Science and

2016/17 Annual review of Radio New Zealand Limited

Report of the Economic Development, Science and Innovation Committee

March 2018

Contents

Recommendation

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Introduction

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Financial performance

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Radio New Zealand’s role as an independent broadcaster

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Māori strategy

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Radio New Zealand’s resilience across its network

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Reaching Pacific communities

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RNZ+

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Accuracy of news

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Future programming and content

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Appendix

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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 Houselooks 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.

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