Rich Katherine: Questions for Oral Answer — Questions to Ministers 
Rich Katherine: Questions for Oral Answer — Questions to Ministers 
[Volume:609;Page:6345] 
10.  
KATHERINE RICH (NZ National) 
 to the  
Minister of Broadcasting 
: Does he stand by his statement of 27 March 2003 that “Following the passage of the Television New Zealand Act two separate broadcasting and transmission companies will come into effect on 1 July 2003”; if not why not? 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 The Government made the decision to separate the television and transmission arms of TVNZ in December 2002. In February officials advised that there was a possible Australian tax issue related to TVNZ (Australia) but expected this to be resolved in time for separation to occur by 1 July 2003. In case this issue did take longer to resolve the Act was drafted to allow until 31 December 2003 for separation to occur. When I released my 27 March statement it was still expected that separation would occur by the 1 July date. In May officials advised that that resolution would take longer and we are allowing them to discuss the matter. 
Katherine Rich 
: When the Government was told in March 2001 that shifting TVNZ (Australia) into the new State-owned enterprise would trigger a multimillion-dollar capital gains tax payment to the Australian Government why was this issue not addressed much sooner given that the Government has been aware of this risk since March 2001? 
Hon STEVE MAHAREY 
: I think the member is mistaken. The arrangements to separate the transmission and broadcasting arms of TVNZ are a new arrangement as decided in December last year—that is the Australian part of TVNZ is to be handled differently from what was originally decided. So the first date that officials were able to advise the Government on this issue was around February and as I said we expect that those issues will be talked through by officials and a suitable solution found without any costs. 
Mark Peck 
: Why did the Government revive the separation option for broadcasting and transmission businesses of TVNZ? 
Hon STEVE MAHAREY 
: The separation of the transmission business of TVNZ enables each company to focus on its core role given their different nature and their objectives. TVNZ is a Crown-owned company and it gives effect to the charter while maintaining its commercial process. The Transmission Holdings Ltd part of the business of course is in transmission and is a State-owned enterprise. I can report to the House that the separation is going well. Both companies are now operationally separate and trading profitably. 
Gerrard Eckhoff 
: Why did the Minister ignore the advice in the Arthur Andersen report that stated that the potential risks of the transfer of TVNZ (Australia) into a new State-owned enterprise are not counterbalanced by the new expected revenue arising from any transfer to BCL? 
Hon STEVE MAHAREY 
: The advice was not ignored and the arrangements that were expected by that report to cause a problem of course are not being entered into. 
Sue Kedgley 
: If the issues are not satisfactorily resolved by the end of the year as the Minister is hoping what will happen to TVNZ (Australia) on 1 January 2004? 
Hon STEVE MAHAREY 
: We are not expecting any difficulty as we will be arriving at a solution by that time. 
Marc Alexander 
: Is the Minister confident that the separation of the transmission and broadcasting arms of TVNZ will produce an efficiently operating and more transparent structure as opposed to the clumsy three-board hydra that was previously proposed despite the present short-term implementation issues that have surfaced? 
Hon STEVE MAHAREY 
: Yes. 
Katherine Rich 
: When the Minister said that he did not ignore the 2001 report from Arthur Andersen has he overlooked comments made in that report that putting its Australian subsidiary into a new State-owned enterprise could have a severe impact on TVNZ’s Australian arm creating “a risk of loss of key personnel” and “would put at risk the international business strategy of TVNZ” and that TVNZ (Australia)’s ability to make money would also be under threat if it were separated from TVNZ? 
Hon STEVE MAHAREY 
: No. We did not ignore that advice.