'Good chance' TVNZ-RNZ merger will be shelved, says economist

Monday, 12 December 2022

There is a good chance the Government will put the merger of RNZ and TVNZ on the back-burner, Infometrics principal economist Brad Olsen says.

Its proposed Income Insurance Scheme could also be a casualty of the deteriorating economic outlook and the need to keep a lid on spending, he said.

However, a spokesperson for Finance Minister Grant Robertson said there was no change to what he described as the Government’s commitment to bring in the insurance scheme.

The Treasury will release its half-year economic update (Hyefu) on Wednesday and ANZ expects it will push back the forecast date for a return to surplus by another 12 months, to the year ending June 2026.

Robertson told a select committee late last month that he had been “very clear with my colleagues, in terms of the next Budget, that we are asking them to justify what they've been doing”.

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There is speculation that the focus on containing spending could provide an opportunity for the Government to shelve some policies that have not so far appeared to gain traction with the public, including the proposed merger of TVNZ and RNZ into a new public media entity.

Prime Minister Jacinda Ardern told RNZ on Monday that the Government had a lot on its agenda and “where we need to pare back, we will”.

“Over the summer period, I want every one of my Cabinet colleagues to be looking through the things that they have on their agenda and asking ourselves … whether those are things we should be prioritising at this point in time.”

She declined to say whether that could see the media merger sacrificed.

Broadcasting Minister Willie Jackson would not comment directly on that possibility when interviewed by Stuff on Friday.

He said he kept hearing from people who “hate the merger”, including journalists who said the Government had not explained why it was being proposed.

“We’ve said the ‘why’ 150 times. The media landscape has changed. Reduced revenue, reduced commerciality, business viability is all at risk – that’s ‘the why’.

“The time has come to set up a new model, very similar to the BBC or ABC.”

However, Jackson said the Government’s media policy was not all about the merger.

The merger was important, but its decision to develop legislation requiring online giants such as Google and Facebook to help fund the media through licensing deals was “equally important”, he said.

Olsen believed the Government’s proposed Income Insurance Scheme could be at risk, along with the media merger, despite strong backing from Robertson himself.

The insurance scheme, which would be funded by an ACC-like levy, would pay out 80% of people’s salary for up to six months, with payments capped at $104,728 a year, to people who lost their jobs due to redundancy, illness or disability.

Such schemes are very common in the OECD, but it has appeared a relatively tough sell here, with critics on both the political left and right.

Reserve Bank forecasts of a significant jump in unemployment in 2024 could also mean the scheme might need to launch into a headwind of high pay-outs.

Olsen believed there was a good chance both the media merger and the insurance scheme would be dropped, but said it was unlikely that ministers would announce any specific policies being cut when the Treasury released the Hyefu on Wednesday.

“There are probably some projects that will just very quietly not be talked about and not be actioned into the New Year. There's going to be a combination of a need for fiscal restraint, but also political reality given we are coming into an election year,” he said.

“Priorities cannot be ‘everything’ at the moment, and that means that some things will have to get left on the cutting room floor.”