Hon Kris Faafoi
Minister of Broadcasting, Communications and Digital Media
Strengthening Public Media
7 February 2020
Date:
7 February 2020
Title:
Strengthening Public Media: Report Back – January 2020 Cabinet meeting
Author:
Ministry for Culture and Heritage
These documents have been proactively released by the Minister of Broadcasting,
Communications and Digital Media. This package includes the Cabinet paper and associated
minute.
Title:
Strengthening Public Media: Report Back (January 2020)
Title:
CAB-20-MIN-0004 Minute of Decision (January 2020)
Some parts of this information release would not be appropriate to release and, if requested,
would be withheld under the Official Information Act 1982 (the OIA). Where this is the case,
the relevant sections of the OIA that would apply have been identified. Where information has
been withheld, no public interest has been identified that would outweigh the reasons for
withholding it.
9(2)(b)(ii)
To protect information where the making available of the information would
be likely unreasonably to prejudice the commercial position of the person
who supplied or who is the subject of the information
9(2)(f)(iv)
To maintain the constitutional conventions for the time being which protect
the confidentiality of advice tendered by Ministers of the Crown and
officials
© Crown Copyright, Creative Commons Attribution 4.0 International (CC BY 4.0)
[In Confidence – Commercial]
Office of the Minister of Broadcasting, Communications and Digital Media
Chair, Cabinet
Strengthening Public Media: Report Back
Proposal
1.
This paper seeks agreement in principle, subject to the completion and Cabinet
approval of a satisfactory detailed business case
s9(2)(f)(iv)
s9(2)(f)(iv)
, to:
1.1.
establish a new public media entity and ultimately disestablish Radio New
Zealand Ltd (RNZ) and Television New Zealand Ltd (TVNZ), and
1.2.
confirm NZ On Air’s continued role in providing contestable funding for public
media content and services in a way that complements the new entity and
supports the wider media sector.
Executive Summary
2.
New Zealand media are increasingly unable to meet the needs and interests of our
dynamic and diverse population. Increased competition from international content
providers, declining revenue shares, and a transformation in audience behaviour are
driving changes in the media’s operating environment. These factors are resulting in
a fragile media system with a reduced ability to inform, educate and entertain New
Zealanders with a range of trusted and relevant, cultural y-specific content. In this
context, there is an increasing risk of market failure for the provision of quality local
content in certain genres.
3.
The current mandates, objectives and funding arrangements of NZ On Air, RNZ and
TVNZ are not aligned and constrain their ability to respond col ectively to digital
disruption. Having a strong public media that provides a range of trusted news,
Proactively released
information and entertainment is vital to the health and vibrancy of New Zealand
society, particularly if services provided by private media contract.
4.
In August 2019, Cabinet confirmed the need to strengthen public media and agreed
to investigate three options for this purpose. I have now considered the approach
recommended by the Chief Executive’s Advisory Group that was convened to
develop advice on the options.
5.
This paper sets out a strategic approach to optimise the value Government gets from
its investment in public media and to contribute to a set of public media outcomes.
This strategy would build a strong public media so that current and future
generations of New Zealanders can have access to quality content that reflects their
languages, experiences and communities.
1
2nkya32fhw 2020-01-29 08:43:28
6.
I propose that Government agree in principle to establish a new public media entity
and confirm NZ On Air’s continued role in providing contestable funding for public
media content and services.
7.
The new entity would be created by legislation that would include a charter that
clearly defines its public media purpose and mandate. In particular, it would define
principles and objectives to direct its operation as a public media entity. There are a
number of domestic and international examples of charters that define core
characteristics of public media entities, for example those of RNZ, the BBC in the
United Kingdom, and the ABC in Australia. These precedents wil be useful
resources to inform the provisions of the establishing legislation for the new entity,
which will need to ensure the new entity can meet the distinct needs of New Zealand
audiences.
8.
The new entity would draw on existing capability and capacity from RNZ and TVNZ,
which would ultimately be disestablished. It would operate as a not-for-profit entity
with a mixed funding model comprised of Crown funding and non-Crown revenue. All
aspects of its operations, regardless of revenue source, would contribute to its public
media mandate. Core news services that are currently advertising-free wil continue
to be advertising-free; for example, the new entity wil continue to provide an
advertising-free radio news service as is currently provided by RNZ.
9.
This approach wil establish a local public media entity that is multi-platform, agile
and has greater scale to be better positioned to respond to ongoing digital
transformation and to deliver for audiences. It will create a comprehensive and
visible “home” for the stories we care about as New Zealanders and meet audience
expectations that they can access content across platforms when and how they
choose.
10.
The Government recognises the risk arising from the proliferation of inaccurate
information intended to mislead audiences. In this context, a strong public media
entity with statutory editorial independence is an important way to ensure access to
an in-depth range of trusted and impartial news and high-quality journalism with a
local perspective.
11.
I recommend that Cabinet direct officials to complete a detailed business case before
final decisions on the preferred approach, including funding, are confirmed. The
Proactively released
detailed business case will provide an opportunity to assess key options and choices
around the design of the new entity, its operating model, and its relationship with the
NZ On Air funding model. The business case will need to explore design options for
Cabinet’s consideration that can ensure that the combination of Crown and non-
Crown revenue does not compromise the ability of the entity to fulfil its public media
mandate, in particular if non-Crown revenue declines. The business case will also
analyse the viability of the proposal, whether it will achieve the outcomes sought,
what is required to implement it, and the costs.
12.
Implementing this approach wil be a complex, multi-year process given the scale of
the proposed changes. It will require careful management and access to requisite
skills and capability through each phase to be successful. The process wil entail
legislative change, organisational design, change management and substantial
Crown funding.
s9(2)(f)(iv)
2
2nkya32fhw 2020-01-29 08:43:28
s9(2)(f)(iv)
13.
I intend to complete a detailed business case within a compressed timeframe to
facilitate a timely report back to Cabinet in July 2020. This report back will also seek
the policy approvals necessary to develop drafting instructions for the establishing
legislation for the new entity, including those needed to develop its charter.
Background
14.
In August 2019 Cabinet agreed that the Minister of Broadcasting, Communications
and Digital Media would lead a project to investigate the fol owing three options for
strengthening public media, and invited the Minister to report back in November 2019
with a preferred option (CAB-19-MIN-0398.02):
14.1. a combined public media service incorporating TVNZ and RNZ;
14.2. consolidating the news services of TVNZ and RNZ; and
14.3. substantially increasing funding for NZ On Air.
15.
Cabinet also agreed to adopt a set of public media goals as Government goals to
guide policy decisions and funding al ocation for public media. These goals have
informed the development of outcome statements to assess the options for
strengthening public media.
16.
A Chief Executive’s Advisory Group (the Advisory Group), supported by a Working
Group, was established to assist my officials with the development of advice on
these options. The Advisory Group consisted of representatives from the Ministry for
Culture and Heritage (MCH), The Treasury, the State Services Commission, the
Department of the Prime Minister and Cabinet, Te Puni Kōkiri, the Ministry for Pacific
Peoples, RNZ, TVNZ and NZ On Air. Dr Gavin Ellis, former editor-in-chief of the
New
Zealand Herald and a leading media academic and commentator, advised the group
as an independent media expert.
The context for change
17.
Media institutions make a unique contribution to the health and vibrancy of
Proactively released
democratic societies. They have a role in holding power to account and supporting
the ability of citizens to participate in an informed democracy. Media provide a
diverse range of entertainment, news and information for audiences and reflect the
languages, experiences and communities of nations. The importance of credible and
independent media is reflected in the fact that all modern pluralistic democracies
have some form of publicly funded media.
18.
Global y, media entities are experiencing an increasingly constrained financial
environment, rapid technology change and changing consumer preferences.
Governments around the world are responding to these issues in a variety of ways.
19.
Traditional media’s share of available revenue is reducing substantially due to
increased competition from global digital platforms. While digital advertising revenue
is growing rapidly, advertising on traditional media platforms is in steep decline.
3
2nkya32fhw 2020-01-29 08:43:28
link to page 5 link to page 5
Newspapers and television especial y are not able to compete with the data
capabilities and economies of scale advantages of new digital platfo
rms.1
20.
Print media has been affected the most by declining revenues, which has placed the
production and distribution of public interest news from the private sector under
strain. In recent years many regional news titles have closed, and newsrooms are
facing staff reductions and diminishing capacity to provide comprehensive news
coverage. Television too is under pressure. MediaWorks has recently announced its
intention to sel its television arm. TVNZ’s revenue is decreasing and is forecast to
continue to decline. Its commercial revenue has been a means of funding the
creation of local content to date.
21.
At the same time, the advent of on-demand and online content providers in the New
Zealand market has diversified consumer choice and increased competition for
audience attention. On a weekly basis, the percentage of New Zealanders who used
a streaming video on-demand service has grown from 12% in 2014 to 63% in 2018,
and the percentage who watched online video (e.g. Facebook and YouTube) has
grown from 49% to 72%
.2 These trends are significantly more pronounced within
younger audiences. Many of these new services are from international providers
(e.g. Netflix, YouTube, Facebook, Amazon) with a focus on international content.
22.
Within public media, RNZ and NZ On Air have received time-limited funding
increases in Budgets 2018 and 2019, and RNZ received a small baseline increase in
Budget 2017. Before these increases, both entities had static funding for close to a
decade that constrained their ability to respond to changes in their operating
environments.
23.
Even prior to changes brought about by digital disruption, New Zealand’s small
market size made it vulnerable to market failure in relation to quality local content.
This vulnerability has been heightened by the emerging dominance of global digital
platforms.
Problem definition and outcome statements
24.
In this context, the Advisory Group has confirmed that the status quo is
unsustainable. It developed the following problem definition to identify the key drivers
for change that should guide any changes to public media arrangements:
Proactively released
24.1. New Zealand media are increasingly unable to meet the needs and interests
of New Zealand’s dynamic and diverse population. The availability of digital
content from international platforms has increased audience choice and
changed when and how they access media content. This increased
competition has significantly reduced the share of revenue (advertising,
subscription and sponsorship) available to New Zealand media. In addition,
public media funding has remained static, meaning that this funding is
diminishing in real terms. Further, public funding for New Zealand content has
not kept pace with the cost of production.
1 In 2018, total New Zealand digital advertising revenue was approximately $1.06 billion, of which approximately $903
million went to digital only services, principally Google and Facebook. (Source: 2018 Advertising Turnover, Advertising
Standards
Authority, https://www.asa.co.nz/2019/05/01/2018-advertising-turnover/.)
2
Where Are the Audiences? 2018, NZ On Air, https://www.nzonair.govt.nz/research/where-are-audiences-2018/.
4
2nkya32fhw 2020-01-29 08:43:28
24.2. These factors are resulting in a fragile media environment, characterised by
reduced resourcing, declining availability of New Zealand content relative to
international content, and uncertainty about the longer-term viability of
advertising-funded media outlets in New Zealand.
24.3. The current mandates, objectives and funding arrangements of NZ On Air,
RNZ and TVNZ are not aligned and constrain their ability to respond
col ectively to digital disruption, and ultimately to inform, educate and entertain
New Zealanders with a range of trusted and relevant, cultural y-specific
content.
25.
I recommend Cabinet agree that Government investment in public media should
support public media entities to contribute to the following outcomes that were
developed by the Advisory Group:
25.1. New Zealand audiences choose to access mainstream and targeted content
and services that support:
25.1.1. their needs and interests as people living in Aotearoa, and which in
particular reflect the language and experiences of Māori and Pacific
peoples, and other under-served audiences;
25.1.2. their ability as New Zealanders to be informed and engaged members
of our participative democracy and open civic society;
25.1.3. their access to a range and diversity of content that they value and
trust.
25.2. Public media in New Zealand are:
25.2.1. operational y and editorial y independent;
25.2.2. securely and sustainably funded;
25.2.3. able to respond effectively to an evolving operating environment and
relevant to changing consumer preferences, in particular younger
audiences;
Proactively released
25.2.4. complementary to and collaborative with private media.
25.3. Public media play an integral role in contributing to New Zealand being:
25.3.1. a connected, informed, cohesive, and independent nation;
25.3.2. a healthy, participative democracy;
25.3.3. confident in, and aware of our unique identity, cultures, and
languages.
26.
These outcomes would contribute to the Government’s priorities of supporting
healthier, safer and more connected communities; building closer partnerships with
Māori; valuing who we are as a country; and creating an international reputation we
5
2nkya32fhw 2020-01-29 08:43:28
can be proud of. They would also contribute to the Living Standards Framework
wellbeing domains of civic engagement and governance, cultural identity, social
connections, knowledge and skills, and subjective wellbeing.
27.
The outcomes are also vital to the priority of ensuring there is more quality local
broadcast content as stated in
Our Plan – The Government’s Priorities for New
Zealand.
Strategic approach to developing advice
28.
Cabinet’s direction to develop advice on options to strengthen public media has
provided an opportunity to take a system-wide strategic approach. To ensure that the
Crown can optimise the value it gets from its investment in public media, the advice
considered potential changes across the wider public media system rather than
analysing each option in isolation.
29.
The Advisory Group explored a range of options that could be developed and
implemented in different ways. Options were tested against the problem definition
and outcome statements. The expertise and resources of the contributing agencies
have been indispensable in identifying an approach with the best potential to address
the problem definition.
30.
The needs and interests of current and future audiences have been at the centre of
considering these options. A key objective has been to ensure that any
recommendation is future-focused, delivers greater value to audiences, and supports
public media to respond to the changing needs and increasing cultural diversity of
New Zealand’s population. The design of the new entity would be focused on
audiences rather than platforms.
31.
Audiences are exercising an increased choice over how and where they access
content, and both public and private media need to respond to these changes to
compete for audiences. It is difficult for Government to mitigate all the impacts of this
disruption, especially on private media. I have therefore sought to focus on options
that would ensure New Zealand has well-resourced public media with the mandate
and independence to deliver on the outcome statements. The contribution public
media entities make to these outcomes may assume even greater significance if
there is further contraction in the services provided by the domestic private media
sector.
Proactively released
32.
At the same time, I recognise that private media make a valuable contribution to
public media outcomes by providing for a variety of audience needs and a diversity
of views and perspectives. The preferred approach therefore provides for
contestable funding to continue supporting private media’s contribution to these
outcomes. In addition, funding will be continued for other services such as
community radio and disability services.
33.
This approach also recognises that media is a key means of revitalising Māori
language and culture. The Government is committed to supporting the advancement
of the Maihi Karauna strategy, including creating the conditions for te reo Māori to be
valued by Aotearoa whānui as a central part of national identity. To optimise the
6
2nkya32fhw 2020-01-29 08:43:28
value of the Crown’s public media investment, any option progressed as part of this
process should be aligned with the goals of the Māori Media Sector Shift.
Preferred approach to strengthen public media
34.
My preferred approach is to establish a new public media entity and to confirm NZ
On Air’s continued role in providing contestable funding for public media content and
services in a way that complements the new entity and supports the wider media
sector.
35.
The preferred approach was developed in consultation with the chief executives of
NZ On Air, RNZ and TVNZ. From the three options agreed by Cabinet, this approach
was recommended as the optimal way of promoting and preserving the value public
media provides for New Zealanders.
36.
The new entity would be created by legislation that includes a charter that clearly
defines its public media purpose and mandate. It would have core functions
consistent with global y recognised public media entities, including the provision of
public media services across a variety of platforms.
37.
The new entity would have a mixed funding model comprised of Crown funding and
non-Crown revenue
s9(2)(f)(iv) s9(2)(b)(ii)
, and it
would operate on a not-for-profit basis. All aspects of its operations, regardless of
revenue source, would contribute to its public media purpose. Core news services
that are currently advertising-free will continue to be advertising-free; for example,
the new entity wil continue to provide an advertising-free radio news service as is
currently provided by RNZ. The nature and extent of the entity’s overal news service
wil be defined during the design phase of the new entity. The new entity could
achieve economies of scale across platforms and support the development of shared
services and infrastructure in a cost-effective way.
38.
Fol owing the establishment of the new entity, RNZ and TVNZ would ultimately be
disestablished. The new entity would draw on the existing capability and capacity of
RNZ and TVNZ in the first instance. It is likely that additional capability would be
required beyond that which could be secured from RNZ and TVNZ. Some existing
capability and capacity within RNZ and TVNZ may not be required by the new entity,
for example there may be some duplication of back office resource. RNZ and TVNZ
currently have different company cultures. Creating a new entity provides an
Proactively released
opportunity to cultivate a strong unified culture that serves the public interest and
prioritises audience needs. Realising this opportunity will require strong board
leadership and a cohesive and effective strategy.
39.
Initial analysis, in consultation with the State Services Commission and The
Treasury, has shown that an autonomous Crown entity or a Crown entity company
are the most appropriate options for the organisational form of the new entity. These
models could ensure the new entity had appropriate operational and editorial
independence and was able to derive funding from Crown and non-Crown revenue
streams. The entity would have standard accountability requirements under the
Crown Entities Act 2004 and appropriate monitoring, and it would be subject to the
level of Ministerial direction relevant to its legal form.
7
2nkya32fhw 2020-01-29 08:43:28
40.
The contribution of the new entity would be supported by the retention of the NZ On
Air contestable funding model, which transparently allocates funding for public media
content and services. NZ On Air’s model supports plurality, the independent
production sector and the creative economy, and competition for innovation and
good ideas in relation to content. In addition, it funds services such as access radio,
regional and Pacific media, and disability services.
41.
The contestable funding model administered by NZ On Air should be designed to
optimise the relative contributions that it and the new entity make to the public media
outcomes. The funding model could complement the new entity by:
41.1. providing funding for private and community media to support their
contribution to public media outcomes;
41.2. funding content and services to ensure that the diverse range and needs of
New Zealand audiences are met;
41.3. minimising the risk that the new entity becomes the sole provider of New
Zealand content;
41.4. providing research on audience and sector trends.
Characteristics of public media
42.
The new entity would be a public media entity with a clearly defined purpose and
mandate. A core characteristic of a public media entity is that it is mandated by
government to serve the public good through production and dissemination of
content that:
42.1. contributes to living in a participative democracy and exercising democratic
rights;
42.2. acknowledges and enhances cultural and social values;
42.3. contributes to personal wellbeing by informing, educating and entertaining.
43.
The most significant dimension of a public media entity is the purpose for which it
exists. It exists to create social value or shared benefits for the nation and
Proactively released
communities that it serves and to ensure that al members of those communities are
informed, educated and entertained. The focus of its operations is not to maximise
revenue but to contribute to wider social goals and outcomes. It does not exist to
return a dividend on investment to its owners but is subject to standard Government
expectations of responsible financial management.
44.
As is the case with RNZ and TVNZ, a public media entity would also operate in a
legal environment that provided protection for editorial independence, freedom of
speech, and the ability to hold power to account, which is a key role of the fourth
estate. Transparency of operations and financing is an important means of
reinforcing this protection.
8
2nkya32fhw 2020-01-29 08:43:28
45.
The fundamental principles and objectives of public media organisations are typical y
established in foundation documents, for example the charters of RNZ, the BBC and
ABC.
Benefits of preferred approach for New Zealanders
46.
I consider that the proposed approach wil allow the Government to optimise its
investment in public media by establishing a local public media entity that is multi-
platform, agile and has greater scale to be better positioned to respond to ongoing
digital transformation and to deliver for audiences. It would provide an in-depth range
of trusted and impartial news and information and tell the stories we care about as
New Zealanders. In particular, this approach will provide quality local content where
a market failure might otherwise exist, such as drama, scripted comedy, long-form
journalism, news and current affairs, and documentaries.
47.
The dual components of the preferred approach (a new entity complemented by
contestable funding) have the potential to benefit New Zealanders by:
47.1. offering a comprehensive and visible “home” for New Zealand content with
valued and trusted brand(s), while supporting private media to provide local
content through contestable funding;
47.2. serving the interests and information needs of various age groups within the
whole national audience, including those sections of the audience that are
currently under-served in terms of access to and quality of content;
47.3. meeting audience expectations that they can access content, some of which is
advertising-free, when and how they choose through an integrated, multi-
platform approach;
47.4. providing trusted and impartial news and information;
47.5. creating value for New Zealanders who may not directly access the content
but may benefit from its existence and use by others;
47.6. showcasing New Zealand talent and supporting a thriving creative community;
47.7. creating a durable, flexible and resilient entity able to respond effectively in the
Proactively released
medium to long term to further changes in the media operating environment.
48.
In addition, the Government recognises the risk arising from the proliferation of
inaccurate information intended to mislead audiences. In this context, a strong public
media entity with statutory editorial independence is an important way to ensure
access to an in-depth range of trusted and impartial news and high-quality journalism
with a local perspective.
Other options that were assessed
49.
In assessing the options agreed by Cabinet for investigation, consideration was also
given to the creation of a fully publicly funded public media entity. I consider it
prudent to continue to generate non-Crown revenue to support Crown funding and
get the best value for taxpayers.
9
2nkya32fhw 2020-01-29 08:43:28
50.
I do not consider a combined news service to be an adequate solution as a
standalone option. The limited extent to which this option would have addressed the
problem definition is not proportionate to the risk and disruption that would have
been incurred in its implementation. A single entity would be better able to realise the
scale and efficiency gains in news services while achieving a broader set of
outcomes.
51.
Increasing NZ On Air funding alone would not be sufficient to address the problem
definition as it would not maximise the value derived from the Government’s public
media assets. As outlined above, however, continued contestable funding is a
component of the preferred approach as it makes a beneficial contribution to the
outcomes in a way that is distinct from and complementary to a new public media
entity.
Potential impact of the preferred approach
52.
I have considered at a high level the potential impact of this approach on the current
contestable funding model, the Māori media sector, and private media organisations.
I have also considered opportunities to enhance the public media offering for Pacific
audiences.
53.
s9(2)(f)(iv)
Contestable funding model
54.
The preferred approach would be designed to optimise the relative contributions to
the public media outcomes made by a funding entity and a new public media entity.
The current funding model may need to be modified in order to operate effectively in
conjunction with the new entity. Detailed consideration of the relationship between
the two entities would need to be worked through as part of a detailed business
case, once the mandate and structure of the new entity has been further defined.
Māori media sector
55.
To achieve the public media outcomes, a strengthened public media system must be
able to deliver for Māori audiences, including te reo Māori content. Additionally, to
Proactively released
optimise the Government’s investment in the wider public media system, the new
entity and the Māori media sector should operate in a way that they can contribute
collectively to shared goals and outcomes. The design of the new entity should
recognise that public media and Māori media have distinct but complementary roles
in ensuring Māori language and cultural content is delivered for targeted and general
audiences alike.
56.
Achieving the public media outcomes will also contribute to the Maihi Karauna
outcome of Aotearoatanga – Nationhood, that te reo Māori is valued by Aotearoa
whānui as a central part of national identity. A medium term priority for this outcome
is that more people engage with quality broadcast and online content in te reo Māori.
The new public media entity and the wider public media system will have an
important role in contributing to this priority.
10
2nkya32fhw 2020-01-29 08:43:28
57.
The Minister for Māori Development is leading the Māori Media Sector Shift to
ensure New Zealanders have access to media that promotes and demonstrates the
use of te reo Māori me ngā tikanga, promotes te ao Māori, and tells Māori stories in
Māori ways.
58.
The preferred approach has the potential to normalise te reo Māori and contribute to
te reo Māori me ngā tikanga being a valued part of our national identity by supporting
more New Zealanders to engage with quality Māori language and cultural content. I
propose that officials be directed to work together to identify how shared outcomes
can be best achieved and to identify opportunities for collaboration between public
and Māori media.
Pacific media sector
59.
Media is also a key means of revitalising Pacific languages, culture and identity.
Limited support for Pacific media to date means that it has not kept pace with
technology and audience change and is not currently in a good position to deliver on
future opportunities.
60.
The Pacific Aotearoa Lalanga Fou focuses on thriving Pacific languages, culture and
identities and will lead a revitalised effort to improve the ability of Pacific languages
and cultures to become an increased asset for both Pacific communities and
Aotearoa as a whole. Officials are exploring how support for Pacific media and
broadcasting can be improved as part of this approach.
Private media organisations
61.
Further detail on a preferred operational model for the new public media entity wil be
required before the impact on private media organisations can be assessed. I
propose that an objective of the organisational design for the new entity be to
minimise any negative impact on private media and optimise the opportunities for the
new entity to collaborate with and complement private media in relation to public
media content.
62.
In addition, retaining the contestable funding model wil support the ability of private
and community media to contribute to public media outcomes.
Detailed business case to confirm the preferred approach
Proactively released
63.
At a strategic level, this paper seeks agreement that change to the status quo is
required to support public media to respond to the impact of global disruption and to
realise the value that public media should deliver for New Zealanders. I am seeking
agreement in principle to the recommended approach subject to the completion and
Cabinet approval of a satisfactory detailed business case to test its viability before
final decisions and funding can be confirmed.
64.
Implementing the preferred approach will require legislation to create the new entity
and ultimately to disestablish RNZ and TVNZ. It will also require significant Crown
funding to establish and operate the new entity.
65.
The scale and magnitude of change proposed by this approach mean it falls within
the scope of the Cabinet Office circular CO (19) 6, Investment Management and
11
2nkya32fhw 2020-01-29 08:43:28
link to page 13
Asset Performance in the State Services, which sets out the appropriate process to
support Ministers to make decisions on multi-year investment proposals that have a
medium to high risk profile.
66.
If Cabinet agrees in principle to the preferred approach, then I recommend officials
be directed to complete a detailed business case to provide assurance that this
approach provides the best viable solution to the chal enges facing public media
entities, that it wil deliver the proposed outcomes, and that it is affordable.
67.
In advance of making final decisions, the completed detailed business case will al ow
Ministers to test:
67.1. the economic, financial, commercial and management viability of the proposal;
67.2. what is required to implement the proposal successfully, including managing
the interim period before the establishment of the new entity;
67.3. the cost of developing, implementing and operating the preferred option.
68.
I recommend that Cabinet direct the detailed business case to identify key options
and choices around the design of the entity, its operating model (including any
options to optimise its commercial revenue consistent with its role as a public media
entity), its relationship with the NZ On Air funding model, and its organisational form
(either an autonomous Crown entity or a Crown entity company).
69.
The Advisory Group recognised that the new entity would need to be equipped to
operate effectively in scenarios where its non-Crown revenue increased, declined or
remained stable. The business case will need to explore design options that can
ensure that the combination of Crown and non-Crown revenue does not compromise
the ability of the entity to fulfil its public media mandate, in particular if non-Crown
revenue declines.
s9(2)(f)(iv) s(9)(2)(b)(ii)
s9(2)(f)(iv) s(9)(2)(b)(ii)
s9(2)(f)(iv) s(9)(2)(b)(ii)
Each
of these options will have varying cost implications, but all options will require
additional investment beyond current level
s.3
70.
The detailed business case wil also al ow Cabinet to test the ability to implement the
Proactively released
preferred approach in ways that are consistent with achieving Government’s
outcomes in relation to Māori media and Pacific audiences. It wil test how the
preferred approach could be implemented to minimise any negative impact on
private media and optimise the opportunities for the new entity to collaborate with
and complement private media.
71.
In addition, the detailed business case will provide a means of accessing a broader
level of stakeholder engagement beyond the entities that have been involved to date.
72.
I intend to complete the detailed business case within compressed timeframes to
enable a report back to Cabinet in July 2020. I wil consult the Minister of State
3 The current costs of operating TVNZ, RNZ and NZ On Air are approximately $450 million. Crown funding accounts for
approximately $150 million of this amount.
12
2nkya32fhw 2020-01-29 08:43:28
Services on any machinery of government proposals to be included in the report
back. The report back will also seek the policy approvals necessary to develop
drafting instructions for the establishing legislation for the new entity, including the
high level purpose and mandate that wil inform the development of its charter.
Supporting the entities during the interim period
73.
Establishing a new public media entity will be a multi-year process. It will take some
time to design the new entity and put establishing legislation in place. The features of
the current media environment that drive the need for change will continue to impact
on the sector in the interim. The entities will need to be supported to respond to
those changes in ways that preserve the viability of the preferred approach.
74.
TVNZ, RNZ and NZ On Air will continue to deliver services to New Zealand
audiences under their current statutory frameworks during this interim period. It will
be important that their strategic decisions maintain their ability to operate effectively
and to contribute to the establishment of the new entity.
75.
Interim arrangements would help TVNZ, RNZ and NZ On Air to manage any tensions
between their current strategies and the Government’s intention to establish the new
entity. Interim arrangements would also provide a measure of certainty to interested
parties (e.g. boards, employees, commercial partners) on the Government’s
commitment to this policy.
76.
Officials have identified a range of mechanisms to create interim arrangements:
76.1. letters of expectations to the boards;
s9(2)(f)(iv) s(9)(2)(b)(ii)
Proactively released
77.
I recommend that letters of expectations be used in the first instance to provide
clarity on the Government’s expectations of TVNZ, RNZ and NZ On Air through the
next phases of work.
78.
Officials will monitor the entities’ ability to manage their existing obligations in ways
that support the establishment of the new entity. In the event that the entities require
a greater level of certainty than can be achieved through letters of expectations
alone, I wil assess if further options may require consideration,
s9(2)(f)(iv)
Governance arrangements
79.
Governance arrangements will be needed for the next phase of work to ensure
appropriate oversight. Once I have considered appropriate arrangements, I will invite
relevant Ministers to participate on a Ministerial oversight group.
13
2nkya32fhw 2020-01-29 08:43:28
80.
Officials will continue to draw on the expertise of the members of the current
Advisory Group to progress the next phase of work.
Scope of policy advice
81.
This work has considered the options approved by Cabinet to strengthen public
media. It was not within the scope of this project to consider changes to wider legal
and regulatory policy settings, such as copyright and licence conditions, that could
have a beneficial impact on New Zealand media. I note the Ministry of Business,
Innovation and Employment is leading work to review the Copyright Act 1994, which
provides an opportunity for media entities to provide feedback on current copyright
settings.
82.
It was also outside the scope of this project to consider options pertaining to Māori
and Pacific public media entities as work in these areas is being progressed
separately. It was agreed, however, that any options developed would be consistent
with the goals of that work.
83.
Private media entities, such as newspapers, commercial radio and commercial
television, were also out of scope.
Risks
84.
Due to the scale of change and investment proposed in this approach, each phase of
implementation and execution wil present specific challenges and complexities that
wil require careful management and access to requisite skills and capability.
85.
The proposed approach is a system level solution that wil take multiple years to
implement. The implementation wil take place in the dynamic operating environment
outlined in the problem definition, which creates a risk that the proposed solution will
be overtaken by further change in the sector that renders it less effective or in need
of modification.
86.
Treasury has highlighted the risks of completing a detailed business case of this
level of complexity within a compressed timeframe (refer to Treasury comment
below). I consider that the scale and pace of change in the media sector creates a
need for this work to be progressed quickly. An expedited business case wil allow
Cabinet to reach final decisions on implementing the preferred approach and provide
Proactively released
certainty to the sector on the Government’s policy direction by mid-2020.
87.
I acknowledge that a compressed timeframe will create choices around the level of
analysis, scope of issues and breadth of stakeholder engagement that can be
undertaken in the detailed business case. For that reason, I propose that the
business case be confined to assessing the best means of implementing the
preferred approach rather than ful y assessing alternative options. The report back
wil identify any issues that could not be fully assessed in the time available.
Treasury comment
Risks associated with the proposal
14
2nkya32fhw 2020-01-29 08:43:28
88.
Creating a new public media entity from TVNZ and RNZ will be challenging as it
requires combining two quite different company cultures and two entities that have
very different mandates. The success of the proposal will likely depend on its new
CEO, its new Board, how employees buy in to the new strategy and how the entity
engages with audiences. It will also depend on the new entity having a clear
mandate that meets Ministers’ objectives and that al ows the new entity to
successfully transition over time from RNZ and TVNZ’s current mandates. All of
which are risks that need to be carefully managed.
89.
The proposed July 2020 report back date for the detailed business case wil require it
to be completed by the end of May 2020. This is a compressed timeframe for a
complex initiative, especial y when it has not been informed by a ful indicative
business case.
90.
In Treasury’s view, there are significant risks involved with the proposed timeline.
There is an evidence base that shows the outcomes of business cases undertaken in
compressed timeframes, where some steps have been scaled back or omitted, can
result in key risks being missed which can jeopardise the successful implementation
of the change initiative.
91.
Due to the risks associated with the compressed business case process, including
completing only a partial indicative business case, we think it is important to provide
more clarity, at this stage, about what will be tested through the detailed business
case process. This provides Ministers a sense of the trade-offs involved in meeting
public media objectives while being affordable. We consider that the detailed
business case should analyse at least the fol owing options, each of which will have
varying cost implications, but al of which will require additional investment beyond
current levels:
s9(2)(f)(iv) s(9)(2)(b)(ii)
Proactively released
Consultation
92.
The fol owing departments have been consulted on this paper: The Treasury, State
Services Commission, Te Puni Kōkiri, Ministry for Pacific Peoples, the Ministry of
Business, Innovation and Employment, the Ministry of Foreign Affairs and Trade and
the Office of Ethnic Communities. The Department of the Prime Minister and Cabinet
has been informed.
93.
NZ On Air, RNZ and TVNZ were involved in the development of the advice that
informs this paper.
15
2nkya32fhw 2020-01-29 08:43:28
Financial Implications
94.
There wil be costs to establish the new public media entity and operating funding
required to support it to deliver on its mandate. The detailed business case will test
design choices and the extent to which they would create trade-offs between the
level of Crown funding required and the level of service provided to New Zealanders.
s9(2)(f)(iv)
98.
The next phase of work wil include contracting the development of a detailed
business case to inform a final decision on whether a new public media entity should
be established. A programme office will be established to lead this work.
99.
The costs of the detailed business case have been determined via a request for
proposals from potential suppliers of this service. Other costs are itemised.
Activity
2019/2020 ($m)
Business case development
s(9)(2)(b)(ii)
Gateway and Independent Quality Assurance
Programme office (Project director, project manager,
project administrator)
Proactively released
Additional policy and legal resource (3 FTEs)
Total
0.965
100. MCH cannot meet al of the costs of this next phase from baselines but can
contribute $0.365 million by reprioritising departmental underspends. The balance of
$0.600 mil ion can be met via transfers of funding from elsewhere in Vote Arts,
Culture and Heritage.
Legislative Implications
101. A new public media entity would require new establishing legislation and the repeal
of the Television New Zealand Act 2003 and Radio New Zealand Act 1995.
Amendments to the Broadcasting Act 1989 and other Acts would be required.
16
2nkya32fhw 2020-01-29 08:43:28
102. I will return to Cabinet in July 2020, once a detailed business case on the preferred
approach has been completed, to seek agreement to the policy for any legislative
changes required for implementation.
Impact Analysis
103. A Quality Assurance panel with representatives from The Treasury, the Department
of Internal Affairs and the Ministry for Primary Industries has reviewed the Regulatory
Impact Summary “Strengthening Public Media” produced by the Ministry for Culture
and Heritage.
104. The panel considers that the information and analysis summarised in the RIA meets
the quality assurance criteria. The RIA provides a clear context, description of the
constraints on the analysis contained within it and the rationale for the preferred
approach. The panel notes that this analysis supports in-principle decisions, and that
a detailed business case will be undertaken to inform more detailed regulatory
impact analysis when final decisions are sought. More work will also need to be done
on analysing the preferred option against objectives and decision criteria.
105. An impact analysis wil be completed for the report back to Cabinet in July 2020. It
wil be informed by the outcome of the detailed business case on the preferred
approach.
Human Rights
106. This paper makes no proposals that are inconsistent with the New Zealand Bil of
Rights Act 1990 and the Human Rights Act 1993. The preferred approach is
consistent with the values enshrined in these Acts.
Gender Implications
107. This paper makes no proposals with negative gender implications.
Disability Perspective
108. This paper makes no proposals with negative implications from a disability
perspective. Proactively released
Publicity
109. I intend to make an announcement following Cabinet decisions on this paper. The
announcement will describe the strategic case for change and the preferred
approach to establish a new public media entity and to confirm NZ On Air’s
continued role in providing contestable funding for public media content and
services, subject to the completion of a detailed business case.
110. The announcement will likely prompt questions and scrutiny from private media
about the nature and operating model of the new entity and the impact it may have
on their operating environment. These questions will be addressed through the
detailed business case process. There will be clear messages about the scope of the
announcement.
17
2nkya32fhw 2020-01-29 08:43:28
111. The announcement will also provide clarity about non-commercial services, i.e. that
the new entity wil continue to provide an advertising-free radio news service as is
currently provided by RNZ.
Proactive Release
112. I intend to release this paper proactively when the announcement is made. Proactive
release is subject to redaction as appropriate under the Official Information Act 1982.
Recommendations
The Minister of Broadcasting, Communications and Digital Media recommends that the
Committee:
Strategic context for Government’s investment in public media
1.
note that both private and public media institutions make a unique contribution to the
health and vibrancy of New Zealand society by supporting citizens to participate in
an informed democracy and providing a diverse range of entertainment and
information for audiences;
2.
note that digital disruption has led to New Zealand media being increasingly unable
to meet the needs and interests of New Zealand’s dynamic and diverse population;
3.
note that the current mandates, objectives and funding arrangements of NZ On Air,
RNZ and TVNZ are not aligned and constrain their ability to respond collectively to
digital disruption, and ultimately to inform, educate and entertain New Zealanders
with a range of trust and relevant, culturally specific content;
4.
agree that Government is committed to ensuring that future generations of New
Zealanders can access content that reflects their languages, experiences and
communities in ways that meet their needs and interests;
5.
agree that Government investment in public media should support public media
entities to contribute to the fol owing outcomes:
5.1.
New Zealand audiences choose to access mainstream and targeted content
and services that support:
Proactively released
5.1.1.
their needs and interests as people living in Aotearoa, and which in
particular reflect the language and experiences of Māori and Pacific
peoples, and other under-served audiences;
5.1.2.
their ability as New Zealanders to be informed and engaged members
of our participative democracy and open civic society;
5.1.3.
their access to a range and diversity of content that they value and
trust.
5.2.
Public media in New Zealand are:
5.2.1.
operational y and editorial y independent;
18
2nkya32fhw 2020-01-29 08:43:28
5.2.2.
securely and sustainably funded;
5.2.3.
able to respond effectively to an evolving operating environment and
relevant to changing consumer preferences, in particular younger
audiences;
5.2.4.
complementary to and collaborative with private media.
5.3.
Public media play an integral role in contributing to New Zealand being:
5.3.1.
a connected, informed, cohesive, and independent nation;
5.3.2.
a healthy, participative democracy;
5.3.3.
confident in, and aware of our unique identity, cultures, and
languages.
Preferred approach to strengthen public media
6.
note that on 12 August 2019 Cabinet agreed that the Minister of Broadcasting,
Communications and Digital Media would lead a project to investigate three options
for strengthening public media (CAB-19-MIN-0398.02):
6.1.
a combined public media service incorporating TVNZ and RNZ;
6.2.
consolidating the news service of TVNZ and RNZ; and
6.3.
substantially increasing funding for NZ On Air;
7.
note that the Chief Executive of the Ministry for Culture and Heritage convened an
Advisory Group with representation from the relevant government departments and
the chief executives of RNZ, TVNZ and NZ On Air to develop advice on a preferred
option;
8.
note that the Advisory Group has collectively recommended the fol owing preferred
approach:
8.1.
to establish a new public media entity with the following core features:
Proactively released
8.1.1.
it is a single legislative entity;
8.1.2.
it has a clearly defined public media mandate and purpose, with the
core functions of a globally recognised public media entity;
8.1.3.
it provides public media services across a variety of platforms, some
of which will be advertising-free;
8.1.4.
it has a mixed funding model with revenue derived from Crown and
non-Crown sources;
8.1.5.
it operates as a not-for-profit entity;
8.1.6.
it has statutory provisions for editorial and operational independence;
19
2nkya32fhw 2020-01-29 08:43:28
8.2.
to confirm NZ On Air’s continued role in providing contestable funding for
public media content and services in a way that complements the new entity
and supports the wider media sector;
9.
note that officials have identified that the most appropriate organisational form for
the new entity would be either an autonomous Crown entity or a Crown entity
company and that it would be subject to the standard reporting and operating
disciplines associated with those forms;
10.
note that the proposed approach will allow the Government to optimise its
investment in public media by establishing a local public media entity that is multi-
platform, agile and has greater scale to be better positioned to respond to ongoing
digital transformation and to deliver for audiences;
11.
note that implementing the preferred approach wil be complex and require careful
management of associated risks over a multi-year process involving detailed
business case development, legislative change, organisational design, change
management and substantial Crown funding;
12.
note that implementing the preferred approach would result in a new entity being
established that would in the first instance draw on existing capacity and capability
within RNZ and TVNZ to meet its needs, and that RNZ and TVNZ would ultimately
be disestablished as a result;
13.
note that creating a new entity that draws on existing capability and capacity within
RNZ and TVNZ will present challenges due to differing company cultures and
mandates, and that creating a new entity provides an opportunity to cultivate a strong
unified culture that serves the public interest and prioritises audience needs;
14.
agree in principle, subject to the completion and Cabinet approval of a satisfactory
detailed business case, to establish a new public media entity and to confirm NZ On
Air’s continued role in providing contestable funding for public media content and
services, as set out in recommendation 8;
15.
note that core news services that are currently advertising-free will continue to be
advertising-free;
Next phases of work
Proactively released
16.
note that the scale and magnitude of change requires a detailed business case to be
completed to support Ministers to make final decisions on how best to implement the
preferred approach;
17.
direct officials to undertake a detailed business case to test the viability and most
effective means of delivering this approach and to ensure that the Crown is able to
optimise the value of its investment in public media;
18.
agree that the detailed business case should in particular consider the fol owing
issues:
18.1. the economic, financial, commercial and management viability of the proposal;
20
2nkya32fhw 2020-01-29 08:43:28
18.2. what is required to implement the proposal successfully, including managing
the interim period to implementation;
18.3. the overall cost of developing, implementing and operating the preferred
approach;
18.4. key options and choices around the design of the entity, its operating model,
including any options to optimise its commercial revenue consistent with its
role as a public media entity, its relationship with the NZ On Air funding model,
and its organisational form (either an autonomous Crown entity or a Crown
entity company);
18.5. the ability to implement the preferred approach in ways that are consistent
with achieving Government’s outcomes in relation to Māori media and Pacific
audiences;
18.6. how the preferred approach could be implemented to minimise any negative
impact on private media and optimise the opportunities for the new entity to
col aborate with and complement private media;
19.
invite the Minister of Broadcasting, Communications and Digital Media to report
back to Cabinet on the outcome of the detailed business case in July 2020 and to
seek confirmation of the preferred approach and an implementation plan;
20.
note that there are risks associated with completing a detailed business case in a
compressed timeframe and that the report back wil identify any issues that could not
be fully assessed in the time available;
21.
direct officials to work together to identify opportunities for collaboration and how
shared outcomes can be best achieved between public and Māori media;
22.
note that the Minister of Broadcasting, Communications and Digital Media will be
considering governance arrangements for the next phase of work and will invite
relevant Ministers to participate on a Ministerial oversight group;
23.
note that the Minister of State Services will be consulted on machinery of
government issues before the July 2020 Cabinet report back;
Proactively released
24.
note that the Cabinet report back will also seek the policy approvals necessary to
develop drafting instructions for the establishing legislation for the new entity,
including those needed to develop its charter;
25.
note the Minister of Broadcasting, Communications and Digital Media’s intention for
Cabinet to consider the sustainability of the private media sector in 2020;
Financial implications
26.
note that the preparation of a detailed business case described in recommendation
17 above and related policy and legislative work wil create cost pressures totalling
$0.965 mil ion within the Ministry for Culture and Heritage;
21
2nkya32fhw 2020-01-29 08:43:28
27.
note that $0.600 million of the above costs can be met through transfers from
elsewhere within Vote Arts, Culture and Heritage with the remainder being met
through reprioritisation of existing departmental baselines and utilisation of available
departmental underspends at year-end;
28.
approve the following fiscally neutral changes to appropriations to meet the costs of
the detailed business case and programme management, with no impact on the
operating balance and net core Crown debt;
$m – increase/(decrease)
Vote Arts, Culture and
2019/20 to 2021/22
Heritage
Minister for Arts, Culture and
Heritage
Multi-Year Multi-Category
Expenses and Capital
Expenditure:
Policy Advice, Monitoring of
Funded Agencies and
0.600
Ministerial Services
Departmental Output
Expense:
Policy Advice
(funded by revenue Crown)
Departmental Output Expense:
First World War Centenary
(0.200)
-
-
-
-
(funded by revenue Crown)
Non-Departmental Other
Expense:
(0.400)
-
-
-
-
Commonwealth War Graves
29.
agree that the proposed changes to appropriations for 2019/20 above be included in
the 2018/19 Supplementary Estimates and that, in the interim, the increase be met
from Imprest Supply;
30.
agree that any Ministry for Culture and Heritage departmental underspends in
2019/20 be applied to meet the additional costs described above as necessary,
Proactively released
subject to confirmation by Joint Ministers following completion of the 2019/20 audited
financial statements;
s9(2)(f)(iv)
22
2nkya32fhw 2020-01-29 08:43:28
s9(2)(f)(iv)
Authorised for lodgement
Hon Kris Faafoi
Minister of Broadcasting, Communications and Digital Media
Proactively released
23
2nkya32fhw 2020-01-29 08:43:28
C O M M E R C I A L : B U D G E T : S E N S I T I V E
CAB-20-MIN-0004
Cabinet
Minute of Decision
This document contains information for the New Zealand Cabinet. It must be treated in confidence and
handled in accordance with any security classification, or other endorsement. The information can only be
released, including under the Official Information Act 1982, by persons with the appropriate authority.
Strengthening Public Media
Portfolio
Broadcasting, Communications and Digital Media
On 28 January 2020, Cabinet:
Strategic context for the government’s investment in public media
1
noted that both private and public media institutions make a unique contribution to the
health and vibrancy of New Zealand society by:
1.1
supporting citizens to participate in an informed democracy;
1.2
providing a diverse range of entertainment and information for audiences;
2
noted that digital disruption has led to New Zealand media being increasingly unable to
meet the needs and interests of New Zealand’s dynamic and diverse population;
3
noted that the current mandates, objectives and funding arrangements of NZ On Air, Radio
New Zealand Limited (RNZ) and Television New Zealand Limited (TVNZ) are not aligned,
and constrain their ability to respond collectively to digital disruption and ultimately to
inform, educate and entertain New Zealanders with a range of trusted and relevant,
culturally-specific content;
4
agreed that the government is committed to ensuring that future generations of
New Zealanders can access content that reflects their languages, experiences and
communities in ways that meet their needs and interests;
Proactively released
5
agreed that government investment in public media should support public media entities to
contribute to the following outcomes:
5.1
New Zealand audiences choose to access mainstream and targeted content and
services that support:
5.1.1
their needs and interests as people living in Aotearoa, and which in
particular reflect the language and experiences of Māori and Pacific
peoples, and other under-served audiences;
5.1.2
their ability as New Zealanders to be informed and engaged members of
New Zealand’s participative democracy and open civic society;
5.1.3
their access to a range and diversity of content that they value and trust;
1
2nkya32fhw 2020-01-29 10:51:27
C O M M E R C I A L : B U D G E T : S E N S I T I V E
C O M M E R C I A L : B U D G E T : S E N S I T I V E
CAB-20-MIN-0004
5.2
public media in New Zealand are:
5.2.1
operationally and editorially independent;
5.2.2
securely and sustainably funded;
5.2.3
able to respond effectively to an evolving operating environment, and
relevant to changing consumer preferences, in particular younger
audiences;
5.2.4
complementary to and collaborative with private media;
5.3
public media play an integral role in contributing to New Zealand being:
5.3.1
a connected, informed, cohesive, and independent nation;
5.3.2
a healthy, participative democracy;
5.3.3
confident in, and aware of our unique identity, cultures, and languages;
Preferred approach to strengthen public media
6
noted that on 12 August 2019, Cabinet agreed that the Minister of Broadcasting,
Communications and Digital Media would lead a project to investigate three options for
strengthening public media:
6.1
a combined public media service incorporating TVNZ and RNZ;
6.2
consolidating the news service of TVNZ and RNZ;
6.3
substantially increasing funding for NZ On Air;
[CAB-19-MIN-0398.02]
7
noted that the Chief Executive of the Ministry for Culture and Heritage convened an
Advisory Group with representation from the relevant government departments, and the
Chief Executives of RNZ, TVNZ and NZ On Air, to develop advice on a preferred option;
8
noted that the Advisory Group has collectively recommended the following preferred
approach: Proactively released
8.1
to establish a new public media entity with the following core features:
8.1.1
it is a single legislative entity;
8.1.2
it has a clearly defined public media mandate and purpose, with the core
functions of a globally recognised public media entity;
8.1.3
it provides public media services across a variety of platforms, some of
which will be advertising-free;
8.1.4
it has a mixed funding model, with revenue derived from Crown and non-
Crown sources;
8.1.5
it operates as a not-for-profit entity;
8.1.6
it has statutory provisions for editorial and operational independence;
2
2nkya32fhw 2020-01-29 10:51:27
C O M M E R C I A L : B U D G E T : S E N S I T I V E
C O M M E R C I A L : B U D G E T : S E N S I T I V E
CAB-20-MIN-0004
8.2
to confirm NZ On Air’s continued role in providing contestable funding for public
media content and services in a way that complements the new entity and supports
the wider media sector;
9
noted that officials have identified that the most appropriate organisational form for the new
entity would be either an autonomous Crown entity or a Crown entity company, and that the
new entity would be subject to the standard reporting and operating disciplines associated
with those forms;
10
noted that the proposed approach will allow the government to optimise its investment in
public media by establishing a local public media entity that is multi-platform, agile and has
greater scale to be better positioned to respond to ongoing digital transformation and to
deliver for audiences;
11
noted that implementing the preferred approach will be complex and require careful
management of associated risks over a multi-year process involving detailed business case
development, legislative change, organisational design, change management and substantial
Crown funding;
12
noted that implementing the preferred approach would result in a new entity being
established that would in the first instance draw on existing capacity and capability within
RNZ and TVNZ to meet its needs, and that RNZ and TVNZ would ultimately be
disestablished as a result;
13
noted that a final decision on the future of RNZ and TVNZ will be made if the business case
supports the viability of establishing a new entity and Cabinet agrees to final proposals to
establish the new entity;
14
noted that creating a new entity that draws on existing capability and capacity within RNZ
and TVNZ will present challenges due to differing company cultures and mandates, and that
creating a new entity provides an opportunity to cultivate a strong unified culture that serves
the public interest and prioritises audience needs;
15
invited the Minister of Broadcasting, Communications and Digital Media to report back to
Cabinet on the preferred approach in paragraph 8 above after the completion of a
satisfactory detailed business case;
16
noted that core news services that are currently advertising-free will continue to be
advertising free;
Proactively released
Next phases of work
17
noted that the scale and magnitude of change requires a detailed business case to be
completed to support Ministers to make final decisions on the preferred approach and how
best to implement the preferred approach;
18
directed officials to undertake a detailed business case to test the viability and most
effective means of delivering this approach, and to ensure that the Crown is able to optimise
the value of its investment in public media;
19
agreed that the detailed business case should, in particular, consider the following issues:
19.1
the economic, financial, commercial and management viability of the proposal;
19.2
what is required to implement the proposal successfully, including managing the
interim period to implementation;
3
2nkya32fhw 2020-01-29 10:51:27
C O M M E R C I A L : B U D G E T : S E N S I T I V E
C O M M E R C I A L : B U D G E T : S E N S I T I V E
CAB-20-MIN-0004
19.3
the overall cost of developing, implementing and operating the preferred approach;
19.4
key options and choices around the design of the entity, its operating model,
including any options to optimise its commercial revenue consistent with its role as a
public media entity, its relationship with the NZ On Air funding model, and its
organisational form (either an autonomous Crown entity or a Crown entity
company);
19.5
the ability to implement the preferred approach in ways that are consistent with
achieving the government’s outcomes in relation to Māori media and Pacific
audiences;
19.6
how the preferred approach could be implemented to minimise any negative impact
on private media and optimise the opportunities for the new entity to collaborate
with and complement private media;
20
invited the Minister of Broadcasting, Communications and Digital Media to report back to
Cabinet in July 2020 (the July 2020 report) on the outcome of the detailed business case and
to seek final decisions on the preferred approach and an implementation plan;
21
noted that there are risks associated with completing a detailed business case in a
compressed timeframe, and that the July 2020 report will identify any issues that could not
be fully assessed in the time available;
22
directed officials to work together to identify opportunities for collaboration and how
shared outcomes can be best achieved between public and Māori media;
23
noted that the Minister of Broadcasting, Communications and Digital Media will be
considering governance arrangements for the next phase of work, and will invite relevant
Ministers to participate on a Ministerial oversight group;
24
noted that the Minister of State Services will be consulted on machinery of government
issues before the July 2020 report;
25
noted that the July 2020 report will also seek the policy approvals necessary to develop
drafting instructions for the establishing legislation for the new entity, including those
needed to develop its charter;
26
noted the Minister of Broadcasting, Communications and Digital Media’s intention for
Cabinet to consider the sustainability of the private media sector in 2020;
Proactively released
Financial implications
27
noted that the preparation of a detailed business case referred to in paragraph 18 above and
related policy and legislative work will create cost pressures totalling $0.965 million within
the Ministry for Culture and Heritage;
28
noted that $0.600 million of the above costs can be met through transfers from elsewhere
within Vote Arts, Culture and Heritage, with the remainder being met through
reprioritisation of existing departmental baselines and the utilisation of available
departmental underspends at year end;
4
2nkya32fhw 2020-01-29 10:51:27
C O M M E R C I A L : B U D G E T : S E N S I T I V E
C O M M E R C I A L : B U D G E T : S E N S I T I V E
CAB-20-MIN-0004
29
approved the following fiscally neutral changes to appropriations to meet the costs of the
detailed business case and programme management, with no impact on the operating
balance and net core Crown debt:
$m – increase/(decrease)
Vote Arts, Culture and Heritage
2019/20 to 2021/22
Minister for Arts, Culture and
Heritage
Multi-Year Multi-Category Expenses
and Capital Expenditure:
Policy Advice, Monitoring of Funded
Agencies and Ministerial Services
0.600
Departmental Output Expense:
Policy Advice
(funded by revenue Crown)
Departmental Output Expense:
First World War Centenary
(0.200)
-
-
-
-
(funded by revenue Crown)
Non-Departmental Other Expense:
(0.400)
-
-
-
-
Commonwealth War Graves
30
agreed that the changes to appropriations for 2019/20 above be included in the 2019/20
Supplementary Estimates and that, in the interim, the increase be met from Imprest Supply;
31
agreed that any Ministry for Culture and Heritage departmental underspends in 2019/20 be
applied to meet the additional costs described above as necessary, subject to confirmation by
Joint Ministers following completion of the 2019/20 audited financial statements;
32
s9(2)(f)(iv)
33
34
Proactively released
Michael Webster
Secretary of the Cabinet
Hard-copy distribution:
Prime Minister
Deputy Prime Minister
Minister of Broadcasting, Communications and Digital Media
5
2nkya32fhw 2020-01-29 10:51:27
C O M M E R C I A L : B U D G E T : S E N S I T I V E
Document Outline