• Maurice Williamson

New Zealanders will continue to enjoy quality public radio services, Minister Responsible for Radio New Zealand Hon Tony Ryall and Minister of Communications Hon Maurice Williamson said today.

NZ On Air funding for Radio New Zealand will increase 10% to $21.4 million for each of the next three years. RNZ currently receives $19.4 million a year from NZ On Air.

"This significant increase of $6 million over three years is double the $3 million for public radio funding stated in the Coalition Agreement," the Ministers said. "It will put RNZ on a sustainable financial footing for the future, providing certainty for our public radio services."

The decision to increase funding from NZ On Air follows the outcome of a review of RNZ, undertaken by members of the Board of RNZ and officials.

The review team identified a $2.78 million gap between revenues and total costs, based on figures supplied by RNZ. This arose primarily from a loss of revenue following the sale of news services to TRN, increases in costs and the failure of the Future State restructuring project to yield expected savings.

The review identified three options to meet the shortfall:

- increased funding from NZ On Air;
- increased revenue from the introduction of sponsorship;
- cost control.

The Review suggested that RNZ could earn $2.5 million a year from sponsorship. However, further analysis requested by Mr Ryall determined that this figure was based on an advertising format not provided for under the Radiocommunications Act
1989. The review subsequently found that the introduction of sponsorship 'credits' allowed for in the legislation would yield significantly less than the original sum.

"The increase of NZ On Air funding to $21.4 million will substantially fund the deficit for current operations," the Ministers said.

"The Board of RNZ has indicated its satisfaction with the extra $2 million a year and will work with the Government to share the gap through costs savings or additional sources of revenue.

"The decision to introduce sponsorship as a source of revenue will be left to the Board of RNZ. The Board has indicated to us that it will be able to meet RNZ's charter requirements without introducing sponsorship credits.

"The increase in funding will remove a great deal of uncertainty for the staff and management of RNZ who have continued to provide innovative and entertaining programmes for the public."