New Zealand: Radio NZ wields a sharp axe

4:00AM Sunday Oct 11, 2009

By Alice Neville

Radio New Zealand has made swinging cuts in the face of rising overheads and a Government budget freeze.

Measures announced by chief executive Peter Cavanagh this week include leaving some vacancies unfilled, shelving expansion plans and increasing the number of repeats.

Cavanagh told employees that non-discretionary costs for the 2009-10 financial year had risen by $1.5 million but the Government grant was frozen at the 2008 figure of $34.1m.

The cost increase was due to "major increases in rent, transmission and electricity charges, depreciation and programme contracts," he said in an internal email to staff. The cuts affect National and Concert radio.

Cavanagh said cost-cutting had been targeted at corporate overheads and non-programming areas wherever possible.

The number of board members will be reduced from six to five and they will meet less often.

Cuts will also hit rank-and-file staff. The Palmerston North office will be temporarily closed and plans for a new Gisborne office have been shelved.

Staff have been told to ensure they have no more than four weeks' annual leave owing, the number of outside broadcasts will be reduced, and some vacancies will be unfilled. More content will be repeated and public access to Radio NZ sound archives will be reduced.

Staff have also been told the organisation can't afford to fund entries for this year's New Zealand Radio Awards.

Cavanagh would not be interviewed but Radio NZ spokesman John Barr confirmed the contents of the email. "Radio NZ does need to make some immediate savings to maintain core services and the chief executive has held a meeting with staff to inform them of that."

Barr would not comment on whether there was a freeze on staff salaries or whether executives would consider pay cuts. The latest annual report says Cavanagh gets between $340,000 and $349,000 a year.

In November 2007, former Broadcasting Minister Steve Maharey hired accounting consultancy group KPMG to carry out an independent review of Radio New Zealand's funding.

The review was not released publicly, but reporters obtained it under the Official Information Act. It recommended Radio NZ's Government grant be increased by more than 20 per cent last year - about $7m a year - to safeguard existing services. Funding was increased by $2.6m, and frozen for four years in this year's Budget.

In his email Cavanagh took a swipe at the Government's broadcasting priorities, arguing that the bulk of its $158m outlay subsidised "the programme-making activities of commercial television broadcasters".

He said the cost of producing one hour of television drama in New Zealand is almost half a million dollars. That would pay for the entire output of Radio NZ National for a week.

Broadcasting Minister Jonathan Coleman said there was no new money for broadcasting in the 2009 Budget and ministers would have to consider "a range of demands" before submitting Budget bids for 2010.

Opposition broadcasting spokesman Brendon Burns said Radio NZ deserved special consideration.

Burns said it was our most comprehensive news service and cutting back on its services to save it from financial strife, when it was already run on "something of a shoestring", was very much false economy."

alice.neville@hos.co.nz

Source: The New Zealand Herald

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10602561

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