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Murray Wright |
Executive Director |
withheld under section 9(2)(g)(ii) |
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James Cunningham |
Manager – Communications, Services & Infrastructure (CSI) |
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Birgit Jaegle |
Senior Advisor – CSI – monitors RNZ |
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Anna Doyle |
Advisor – CSI – monitors TVNZ |
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Steve Rich |
Appointments & Governance (A & G) Manager |
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Bill Frecklington |
Senior Advisor – A & G |
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Adam Wood |
Legal Advisor |
CCMAU’s activities are funded through two appropriations.
· Vote Crown Research Institutes (CRIs), currently $1.073 million (excl GST), enables the Minister for CRIs[1] to purchase advice on the science and innovation (S&I) sector portfolio, including advice on behalf of the Minister for Economic Development in respect of the New Zealand Venture Investment Fund Ltd and the Minister of Research, Science & Technology in respect of the Research and Education Advanced Network New Zealand Ltd.
· Vote State-Owned Enterprises (SOEs), currently $2.668 million (excl GST), enables the Minister for SOEs to purchase advice on SOEs and companies and entities in the other sectors that CCMAU monitors, including the purchase of advice on behalf of other responsible Ministers such as the Minister of Broadcasting in respect of RNZ and TVNZ.
Accordingly CCMAU’s monitoring of RNZ and TVNZ is funded under Vote State-Owned Enterprises.
We consider that the following issues will either require your attention over the near term, or you should be aware of them in case issues arise.
RNZ Graph
For technical reasons, the graphs showing
- Return on Assets & Equity;
- Dividends and Taxes; and the
- Net Gearing Ratio
are not currently available in html format. They can be viewed in the pdf version of this document
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Chair |
Brian Corban (April 2008) |
CEO |
Peter Cavanagh |
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Deputy Chair |
Alison Timms (October 2009) |
Shareholding Ministers |
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Alan Dick (April 2008) |
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Minister of Broadcasting |
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Judy Finn (April 2009) |
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Minister of Finance |
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Judith Fyfe (October 2007) |
Balance date |
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Christine Grice (October 2009) |
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30 June |
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Steve Murray (April 2008) |
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Sifa Taumoepeau (April 2008) |
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CCMAU Manager |
James Cunningham |
CCMAU Senior Advisor |
Birgit Jaegle |
In line with the
timeframes set out in the Crown Entities Act 2004, RNZ is required to
provide responsible Ministers with its Annual Report within 15 working days
of receiving the audit report. The audit report is expected by
31 October 2007; therefore Ministers can expect to receive RNZ’s Annual
Report by 21 November 2007. Under section 150 of the Crown Entities Act
2004, Ministers are required to table RNZ’s Annual Report in the House of
Representatives within five working days of receipt, with RNZ in turn
publishing the document within 10 working days after that. Under this
timeframe the date for tabling RNZ’s Annual Report would be Wednesday 28
November 2007.
CCMAU, in consultation with MCH, will prepare a brief synopsis of the key points contained in RNZ’s Annual Report, for shareholding Ministers, prior to your tabling of the document.
The unaudited financial information shows that RNZ generated a net profit after tax (NPAT) of $100,000, which was slightly ahead of budget. However, this NPAT result has been largely achieved through changes in RNZ’s depreciation policy and short-term restraint on operational expenditure (which we do not consider to be a sustainable practice in the long term.)
RNZ Charter
Following completion of the statutorily required five-yearly parliamentary review of the RNZ Charter, on 3 September 2007 Cabinet approved a new RNZ Charter. The document includes a definition of the words “commercial-free”, and an additional clause to the current Principles of Operation section of the Radio New Zealand Act 1995.
withheld under section 9(2)(f)(iv)
The previous Minister of Broadcasting had agreed that a baseline funding review of RNZ be conducted with the main aim being to assess the appropriateness of current funding for RNZ to sustain and/or enhance its performance and service levels to fulfil its Charter obligations.
Following a contestable process undertaken by MCH, in consultation with RNZ, CCMAU and New Zealand On Air, KPMG was appointed as the reviewer in September 2007. We are advised that KPMG expects to have the final review report available for shareholding Ministers sometime in November 2007. This will be available to inform the 2008 budget process.
Most SOEs and Crown entity companies do not hold annual meetings any longer and instead shareholding Ministers sign written resolutions in lieu of holding an annual meeting. It will be necessary for shareholding Ministers to either sign the resolution for RNZ prior to 31 December 2007, or hold an annual meeting prior to that date.
The 2007/08 business planning process was completed in June 2007, with RNZ’s Statement of Intent (SOI) being tabled in the House of Representatives in July 2007.
In summary, RNZ’s Business Plan and SOI continue to reflect the strategic goal of ‘rebuilding, integrating, consolidating and enhancing the institution of Radio New Zealand’.
For the forthcoming 2008/09 business planning round, a business planning outlook letter will need to be sent to RNZ setting out shareholding Ministers’ expectations. Typically this letter is prepared by CCMAU (in consultation with MCH and the Treasury) for Ministers ready to be sent out either prior to the Christmas break or in January.
For technical reasons, the graphs showing
- Return on Assets & Equity;
- Dividends and Taxes; and the
- Net Gearing Ratio
are not currently available in html format. They can be viewed in the pdf version of this document
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Chair |
Sir John Anderson (December 2008) |
CEO |
Rick Ellis |
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Deputy Chair |
Robert Fenwick (October 2009) |
Shareholding Ministers |
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Anne Blackburn (April 2009) |
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Minister of Broadcasting |
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Professor Bryan Gould (October 2010) |
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Minister of Finance |
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John Goulter (April 2011) |
Balance date |
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June McCabe (October 2010) |
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30 June |
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Philip Melchior (April 2009) |
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CCMAU Manager |
James Cunningham |
CCMAU Advisor |
Anna Doyle |
TVNZ’s Annual Report was tabled on 27 September 2007. TVNZ incurred a financial loss of $4.5 million in the year to 30 June 2007. This was due to the impact of restructuring costs, a reduction in PUTs (people using televisions) across all demographics and the below budget market share of TV ONE.
TVNZ undertook a strategic review at the end of the 2006 calendar year, to consider its position within the free-to-air broadcasting industry, in light of changing market conditions and changing media technologies. Following its strategic review, TVNZ embarked on a significant restructuring to reduce its cost structure and better position the organisation to meet current and future challenges. This process has resulted in TVNZ’s staff numbers being reduced by approximately 110 – 120 (from approximately 1,115 full time equivalents at 30 June 2006). Most of the redundancies have now occurred, and only a few of the staff made redundant, who may be redeployed, have not left TVNZ. The three progressive themes of TVNZ’s strategy are:
The Freeview direct-to-home (DTH) satellite digital television service was launched on 2 May 2007. The land-based digital terrestrial television (DTT) service will be launched in March 2008 and aims to cover 75% of the population.
TVNZ is receiving additional Government funding of $79 million (from 2006/07, over 6 years) for new content to be broadcast on its two new digital channels. TVNZ 6 launched on 30 September 2007, and is a family orientated channel incorporating Kidzone, Family and Showcase content. TVNZ 7 will feature current affairs, news, and documentary type content. TVNZ 7 is intended to launch in tandem with the Freeview DTT platform in March 2008. The digital channels and government funding of their content, is likely to attract ongoing media interest.
The rollout of the DTT transmission system is being conducted by the SOE called Kordia Group Ltd (Kordia), which CCMAU also monitors. Kordia provides a range of telecommunications, radio and television transmission services in New Zealand and Australia. It also recently acquired Orcon Internet Ltd.
Most SOEs and Crown entity companies do not hold annual meetings any longer and instead shareholding Ministers sign written resolutions in lieu of holding an annual meeting. It will be necessary for shareholding Ministers to either sign the resolution for TVNZ prior to 31 December 2007, or hold an annual meeting prior to that date.
The 2007/08 business planning process was completed in June 2007, with TVNZ’s SOI being tabled in the House of Representatives in July 2007.
In summary, TVNZ’s 2007/08 Business Plan and SOI reflect the implementation of TVNZ’s five year Strategic Plan that was presented to shareholding Ministers in late 2006 / early 2007. That plan sees TVNZ focusing on (amongst other things) being the local content leader, making the transition to digital technology and platforms, having its content on all platforms to ensure maximum market penetration, delivering on its Charter obligations, and achieving a 9% return on shareholders’ equity, on average, over the period 2007 to 2011.
For the forthcoming 2008/09 business planning round, a business planning outlook letter will need to be sent to TVNZ setting out shareholding Ministers’ expectations. Typically this letter is prepared by CCMAU (in consultation with MCH and the Treasury) for Ministers ready to be sent out either prior to the Christmas break or in January. The outlook letter for TVNZ has typically been more extensive than that for RNZ, reflecting the former’s size and the range of issues that had been facing it.
Accordingly the larger document was called “Shareholders expectations of TVNZ for 2007 and the future” and will need to be updated for the 2008/09 year. Typically this document is prepared by CCMAU (in consultation with MCH and the Treasury) for Ministers ready to be sent out either prior to the Christmas break or in January.
We understand that the Commerce Select Committee intends to conduct its annual financial review of TVNZ (for the year ended 30 June 2007) sometime during November 2007. No action will be required on your part, other than to be aware that this review is likely to be taking place and could lead to media comment.
CCMAU understands that the Commerce Select Committee does not intend for RNZ to appear before it in respect of its financial review.
CCMAU manages the Board succession processes for the Boards of RNZ and TVNZ, in consultation with, and with input from, MCH.
Withheld under section 9(2)(f)(iv)
There are no terms requiring your consideration on this Board until December 2008, when the first term of the Chair (Sir John Anderson) expires.
Withheld under section 9(2)(f)(iv)r
Shareholding Ministers annually approve the level of fees to be paid to the directors of Crown companies. CCMAU assists Ministers in the setting of directors’ fees by providing advice on fee levels and attending to administrative requirements. The methodology used to set these fees is reviewed annually to maintain appropriate alignment with market and other relativities. A review of Crown company directors’ fees is currently underway and a report has been submitted to the Minister of Finance with options for changes to fee levels. The Minister of Finance is currently consulting with other Ministers responsible for Crown companies to ascertain their views.
We recommend that you:
note the summary information on CCMAU and immediate issues affecting the broadcasting entities that CCMAU monitors, being the Crown entity companies called Radio New Zealand Ltd (RNZ) and Television New Zealand Ltd (TVNZ)
meet with the Executive Director and other relevant CCMAU staff to discuss this briefing.
[1] As you know, in the previous Cabinet, the Minister for CRIs was the responsible Minister. In the new Cabinet the Minister of Research, Science & Technology will assume this role.