Television New Zealand Bill — Third Reading 
Television New Zealand Bill — Third Reading 
[Volume:606;Page:3866] 
Television New Zealand Bill 
Third Reading 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 I move  
That the Television New Zealand Bill be now read a third time 
. This legislation demonstrates the Government’s commitment to quality public broadcasting and its awareness of the key role of public television. The primary value of these broadcasters lies in their contribution to the social and cultural wealth of our nation. This bill is a response not only to the legitimate demands of television-watching citizens but also to the broader expectations of those who recognise the cultural and social importance of television. The bill provides legislative guidance for the operation of TVNZ that is in keeping with the State television broadcaster’s central role. It provides for structural change. That change will support the organisation’s ability to effectively fulfil its new role as a broadcaster but it will also enable TVNZ to maintain a commercial focus in other broadcasting activities. Television New Zealand currently operates as a State-owned enterprise and as such it must put commercial returns above cultural or social imperatives. The Government has maintained the view that the form and structure of Television New Zealand must be changed if it is to be in a position to deliver on the charter that will guide its operation.  
The process of making this change and the decisions about the details of its nature were complicated by the mixture of activities undertaken by the organisation. When we first considered Television New Zealand’s structure it was recognised that the question of whether the transmission business should be separated from the television business was finely balanced. The main argument against separation was the transaction costs associated with making the split. The main arguments in favour of the separation were to do with increased transparency accountability and the need for the two arms to focus on their core business. Cabinet took a decision 20 months ago to defer consideration of a split for 2 years. We have now been able to reconsider that separation in time to incorporate its implementation in this bill effecting what I personally believe is a sensible and an efficient process of change and a sensible and an efficient structural outcome.  
We can see no compelling reason to operate two businesses of different natures and with different objectives in the same company structure. There is to be no overarching TVNZ group overseeing the operations of both TVNZ and the transmission-focused entity primarily BCL. Rather there will be a formal separation of those aspects of Television New Zealand a separation that given the organisation’s current structure will be able to be achieved in a relatively straightforward way. TVNZ’s transmission business is to be established as a State-owned enterprise and its television business will be set up as a Crown-owned company. A decision not to separate the businesses would have meant that the TVNZ group would have been inclined to extract revenues from BCL to fund the television business at BCL’s expense. That might not have been in the best interests of BCL. Nor do I believe it would have been in the best interests of the television business itself.  
Those who argue that BCL should be retained in the ownership of TVNZ appear to be influenced primarily by the effect on TVNZ of the loss of revenue it would suffer as a result of the separation. Clearly there will be a loss of income to TVNZ if it can no longer extract dividends from BCL but it will be far more beneficial to have ownership arrangements that maximise BCL’s commercial opportunities and for the Government to consider how and to what extent TVNZ should be compensated in order to fulfil its charter. We consider that such funding decisions are more appropriately made by the Government than by TVNZ’s directors.  
I would add given the desire for a change in TVNZ’s focus as a public broadcaster that it is questionable what benefits might have been derived from distracting members of the board and management of TVNZ on to matters associated with BCL’s operations and development as would have occurred under the previous structure. Since the original Cabinet decision the shareholding Ministers have approved BCL’s strategy of expanding its telecommunications operations. That will require a substantial investment and considerable attention from the board. A different mix of skills is needed for the governance of each business and that can be best achieved by separating the companies.  
Under this legislation the board of TVNZ will therefore be in a position to focus on its primary objective of implementing the charter while of course maintaining commercial performance. I consider that the achievement of this objective will be significant in the cultural and social life of New Zealanders and of New Zealand. The development of the charter is consistent with this Government’s policies of supporting New Zealand culture and emphasising the importance of a skilled and an educated society. The charter has been developed in the context of cultural recovery. It is informed by our confidence in the cultural distinction and the abilities and aspirations of New Zealanders. Its implementation will mean that the television broadcaster owned by the people of New Zealand will play an enhanced role in supporting the needs of an informed nation. Public broadcasting should clearly provide for the interests of all its audiences not just the audience preferred by advertisers. New Zealand viewers are not simply consumers and the charter makes explicit their entitlement to quality television programming across all content and in relation to both channels that has previously not been available.  
There are those who purport to detect in the charter an attempt by the Government to direct what New Zealanders can watch even as their colleagues make accusations about it being vague or having no real meaning. The TVNZ charter is not vague and meaningless. Neither is it a sinister piece of social engineering. Like the charters of other leading broadcasters around the world and like the Radio New Zealand charter introduced by the previous National Government—but members may remember largely written by me—on which it is partly modelled it is broad and indicative not prescriptive. Without dictating programmes it ensures that we will have a full range of interests provided for. Rather than denying choice it seeks to create the kind of choice that the market alone is incapable of creating.  
In my role as Minister I have no greater ability to direct the content of TVNZ programming that I or my predecessors or the Government in general have had in the past. The bill in fact reinforces the importance of editorial integrity. It does not intrude on independence. It does however set up the Government’s expectation that TVNZ will establish meaningful performance measures and report regularly to the Government. The process of developing those measures is already under way and I know that TVNZ is looking at the best practice of public broadcasters elsewhere. I acknowledge TVNZ’s willingness to do that.  
The bill will also I believe establish TVNZ in a leadership role within the broadcasting sector a role that as the State television broadcaster it is most appropriate that it should play. Amendments to the legislation have underlined that status and I look forward to seeing quality and innovation being the hallmarks of the organisation.  
In conclusion I thank United Future for supporting the separation of the television and transmission businesses within TVNZ and I acknowledge the role played by the Greens in amending the charter particularly in the area of screen violence. As the Minister of Broadcasting as a participant in New Zealand society and as a viewer of public television I look forward to seeing the public television broadcaster flourish as a Crown-owned entity no longer restricted to pursuing purely commercial objectives. I look forward to its response to the direction provided by the charter and to the cultural and social benefits that will result. As a final comment I thank the Hon Marian Hobbs the former Minister of Broadcasting who worked very hard on this bill. It is a pleasure to deliver it and I acknowledge the hard work that she did in the first place. 
KATHERINE RICH (NZ National) 
: 
 There is a question that has plagued many a previous Minister of Broadcasting over the years and it is this: how does the Government create a small publicly funded publicly owned television business? I have the answer to that: give a big one to Steve Maharey and Marian Hobbs. Over the last few years we have seen the Television New Zealand company becoming a mere shell of its former self. When National left office as the Government this company was worth $1 billion. It had a terrific capability to fund a large amount of local content. As a result of the last 3 years of dawdling messing around with the business vague statements and poor management that company is no longer the jewel in the State’s crown. Once valued at $1 billion I imagine that TVNZ would probably be worth less than that now. It is fast becoming a sad flat little company.  
This bill is a backward step for broadcasting for a number of reasons. One of the main reasons is that it reintroduces politics into the broadcasting industry to a level not seen since the 1970s. By making TVNZ a Crown-owned company we will see political interference in the media on a greater scale than ever before. We have seen 3 years of dawdling to get this far. This is the fourth year that the Government has been talking about the charter and very little progress was made in the last few years. Average progress was the equivalent of less than one word a day. Marian Hobbs herself confirmed that in the last 3 years there had been little change on screen. Over the last 3 years TVNZ has lost staff. People have become burnt out as a result of some of the interference that we have already seen at TVNZ. The station itself has lost income. Advertisers became fazed by the fact that they could hear there were to be changes made to the business so that would have affected long-term advertising contracts. Of course we have seen the decimation of value that I have mentioned before.  
But in the meantime we have seen no change in what has been shown on television. Yes there have been a few shows that have been creatively described as “charter friendly” in the interim but we have seen no programming. In fact we have seen a number of arguably non - charter-friendly decisions made—such as the axing of  
Backchat 
 the axing of  
60 Minutes 
 and the appointment of a reality television manager who is charged with making more format shows than were made previously.  
How much change will we now see? If one listens to what is said by members on the Government side of the House one imagines there will be a great sea change in programming. I question how that change can happen when all that the Government has come up with is $10 million plus GST. That is not even enough to produce a historic drama; that is not even enough to add many documentaries to those we see on screen. In fact on the day when the Minister announced that $10 million plus GST Annette King came out and described a similar sum as being “a mere trickle”. I think she was probably the Minister who was being more honest about the amount that has been put behind this charter. One simply cannot produce programming with such a small amount of funding. I suspect that most members in this House support a greater level of local content. We all like to turn on the television or the radio and to see or hear stories that reflect our country. But one cannot produce that with nothing. It costs money to make those programmes and the Government simply has not backed its rhetoric with funding.  
There is another reason that we are concerned about this bill. The direct funding of TVNZ totally undermines the contestable funding process that was put in place by National. If Governments want to get involved in the purchasing of local content that can only be done fairly through a contestable method—that is by using New Zealand On Air. If the Government is to continue the direct funding of TVNZ that totally messes up the process of funding good ideas as opposed to funding individual organisations.  
Let us talk a moment about political interference. Over the last 3 years we have already seen an increase in the way that the Government has started to interfere with the programming on television. I have spoken to many people within the industry who tell me there have been many occasions when news stories in particular have been pulled because there have been concerns that if TVNZ is critical of the Government it will not be well received on the ninth floor of the Beehive. I wonder why the John Tamihere story was pulled from the TVNZ news line-up last Friday. That is not a new thing of course because there has always been a Government involvement in radio. A particular interview about radio with the then Minister Marian Hobbs on Radio New Zealand was suddenly pulled from the schedule because of its close proximity to the last election. That was quite an interesting interview in itself. Marian Hobbs confirmed a number of things. She confirmed that TVNZ already in effect had a charter within its statement of corporate intent—something that I had argued for a long time. She also confirmed that there had been very little change in the programmes scheduled during the previous 3 years but more important she told the country what the real plan for TVNZ was.  
The Government’s real plan is to turn TVNZ into the Radio New Zealand of the television world. I remind members that the listenership of Radio New Zealand usually sits at between 5 and 10 percent—10 percent on a good day. At the moment over 70 percent of New Zealand viewers tune into TVNZ programmes. It is a mainstream medium which serves a wide range of New Zealanders. So increasingly if there is a move to minority-channel programming which is the express aim of this charter we will see a decline in viewership.  
The next point is that it is not clear how compliance with the charter is to be measured. The Minister can say that he thinks the charter provides a clear set of objectives but I question whether he has actually read it. If one reads the charter one learns it is all about motherhood and apple pie—just statements about how we want to see diversity on television a wide range of programming and about how we are supposed to have programmes that reflect all sorts of New Zealanders. We know that that was already in TVNZ’s statement of corporate intent. But the question is how that will be measured. The public has an expectation that it will be measured independently but that is not the case. TVNZ will decide how it will implement the charter and then it will measure that itself. So if TVNZ decides that one charter objective is to screen one drama and it succeeds in doing that then it can tick the appropriate box. I do not think that was the intention that the public had when the Government embarked on this process.  
I think there were great expectations that we would see a huge amount more of local content on TVNZ. But one simply cannot fund that when one has declining profits a financial deterioration of the company and a small amount of funding being handed over by the Government. A further point on political interference is that if TVNZ is to have to go cap in hand to the Government every year to get funding how will it be really objective about the performance of this Government? The truth is that TVNZ cannot be objective. TVNZ will be so nervous that money will be withheld from it that it will be more than cautious when it comes to developing its programmes.  
The other ironic thing in all this is that this legislation has been written and is being implemented by a bunch of people who do not even watch television who do not even have a love of television and who I am sure think spin doctors are just a subcommittee of the “Burns unit”. Probably they have not sat down and watched what most Kiwis like to watch in a very long time. 
Hon Roger Sowry 
: Do your  
Kath and Kim 
 impersonation! 
KATHERINE RICH 
: I will not; I will leave that for later. But I would say that members on the Government side of the House probably do not even know who Kath and Kim are. They probably think they are press secretaries for Marian Hobbs!  
We all want to see good quality television on screen but the point is that one cannot continue to produce programming if one does not pay for it and the Government has not stumped up with the cash for it. 
LARRY BALDOCK (United Future) 
: 
 In rising to speak to the third reading of this bill I say it is with some pleasure that United Future is able to see the bill come to this point in the House and that it was able to find a way forward through negotiation with the Government so that this bill did not sit and languish for ever on the Order Paper. Many people throughout New Zealand have been looking forward to an improvement in their television service and in their television programming and we believe that this bill will offer something of an improvement to viewers. I want to pay a particular commendation to my colleague Marc Alexander who has worked very hard through the Commerce Committee and the Committee stage of this House and has made many positive contributions to the bill. Television plays an important role in the lives of New Zealanders and we do look forward as we support the third reading of this bill and its passing into law to the delivery of some vast improvements for the public of New Zealand. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First is opposing this bill despite having an amendment to the charter requiring that Television New Zealand reflect programming of a family nature to promote the development of family life in New Zealand. New Zealand First believes that free and open communication is the foundation of the democratic State and that the role of the Government in broadcasting should largely be confined to essential regulatory matters realising that there are issues relating to community standards access impartiality and diversity that necessitate intervention. This bill does not give us that certainty in any way—rather the reverse. 
We are pleased to see an amendment to the charter put by the Green Party that focuses on the reduction of violence in television programmes particularly those for children. New Zealand First supports that amendment wholeheartedly. 
New Zealand First believes that this bill is a backward step for broadcasting rather than forward-looking as we have heard from the other side of the House. New Zealand First has concerns along with the general public that the Government will manage the content of what New Zealanders will see on television and that the Minister of Broadcasting in spite of the clause on ministerial and editorial independence will totally manage our television. For example we saw that with the John Tamihere statement last Friday. It was not played at all. We do not believe that it is the role of any Minister in any Government to manage our television viewing or edit daily events. To have a smoke and mirrors policy such as this is not advantageous to New Zealand. 
New Zealand First also has concerns about the charter. Although this charter appears to be very politically correct we do not believe that it is the role of the State to feature television programming that contributes towards “spiritual and ethical development that reflects the diverse beliefs of New Zealanders”. New Zealanders have always been free from any interference by the State in their spiritual beliefs and it is indeed a very sad world if we have to expect television to carry out that task. It is interesting to note that this charter is to be reviewed every 5 years which while maintaining a flexible approach means that the emphasis may change with subsequent Governments. 
New Zealand First questions the money that will be spent on providing the Maori television programmes mentioned in the charter. Although we appreciate that there should always be some Maori cultural programmes on Television New Zealand why have many millions of dollars been spent and why do they continue to be spent on setting up a Maori television station and programmes if that kind of programming will also be heavily scheduled on Television New Zealand? Is this acknowledgment that the Maori television channel will not be providing what New Zealanders require or want? 
As a new member I am puzzled as to why the Minister has not taken a call during the passage of this bill to explain why Television New Zealand is to be split into two separate companies separating off the profitable transmission arm Transmission Holdings Ltd. The separation off of this company and its landholdings—in some cases they are small and in other cases they are not so small—makes it an asset that could easily be sold off to overseas companies. It appears that it is another one of New Zealand’s assets that we will sell cheaply and have to buy back at a grossly inflated price when many millions of maintenance dollars are required. Unfortunately the history of asset selling does not bode well for New Zealand or New Zealanders. New Zealand First believes that strategic asset sales should cease. If considered appropriate and only where absolutely necessary management by private contracts under public ownership should replace the policy of State asset sales. 
This charter states that Television New Zealand will observe a code of ethics that addresses the level and nature of advertising to which children are exposed. The increasing rate of diabetes and obesity among our New Zealand children and young people can be partly attributed to the amount of television advertising of fast foods. New Zealand First is concerned to know whether the health aspect of New Zealanders or advertising revenue will be a priority for Television New Zealand. Thus far the Minister has not clarified this point in any way. Television New Zealand will have to come to the Government for funding and of course the commercial aspect of fast food advertising must come into consideration. The fast food industry is a substantial spender on advertising and it is to be hoped that the health of our nation will be considered. 
The charter for Television New Zealand needs to be regularly audited and the compliance measures need to be developed. I know that the Minister said that there is a company already concerned with this aspect but we are uncertain as to how this will continue in the future. 
Again we are quite concerned as to why this bill should be passed at all. It is quite surprising that the Minister has not taken a call at all on this aspect to enlighten us during the course of the debate. New Zealand First believes that if the Government’s aim is to increase the amount and the quality of local television programming this could be addressed through increased funding through New Zealand On Air rather than unnecessary restructuring which diverts the total funding away from programming. New Zealand First questions this change particularly in the light of the low operational funding that Television New Zealand has been allocated. We will not be supporting this bill. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I am very pleased to support this bill for a variety of reasons. One of the things that we will be able to experience now as a consequence of this charter is to see minority peoples and hear minority voices on our television more often than we have to date. New Zealand is a rich and diverse community and it is important that we see that reflected on our television. This bill will also enable us to have a platform for informed public debate that is not driven by commercial imperatives. It is important to have a participatory democracy and our television service as one of the main mediums of communication is important to that. 
As I listened to the speeches from Opposition members through the Committee stage it was obvious to me that their knowledge of New Zealand history is only about 5 minutes long. I have said in a number of interjections when this demon of “State control” has been mentioned by Opposition members that they want to get into their history books and see what has happened in New Zealand in the past. 
Hon Murray McCully 
: She’s showing her age. 
JILL PETTIS 
: That member says I am showing my age. Does he not even know what happened to Uncle Scrim and “The Friendly Road”? He was taken off radio on the eve of the general election that saw the election of the first Labour Government. Talk about State control! It was a conservative Government that did that so the member’s own party history is not very pure either. 
Hon Murray McCully 
: What about  
Kath and Kim 
? 
JILL PETTIS 
: As for New Zealanders being able to see themselves on television there was an interjection from that member: “What about  
Kath and Kim 
”? Anybody who has watched that programme knows that it is not a New Zealand programme at all. It is an Australian comedy—a quite good comedy but it is certainly not about New Zealand at all. 
In response to Mrs Stewart’s comment about why we are bothering to have a Maori television channel when we already have Maori programmes broadcast on television today what about our having Television One TV2 and TV3? That situation has prevailed for a long time. How come it is OK for one group to have a selection but not another? So I take issue with the member’s comments about that. 
I am pleased to support this bill. It will be good for New Zealanders when we can have informed debate on our television instead of crass commercialism all the time. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise to speak against this bill in the third reading. I speak both in sorrow and in anger against this bill. What this Government is doing to Television New Zealand is appalling. How did we get to this? How did we get to this stage where we have come up with this sort of clone this hybrid which is not public broadcasting and is not commercial enterprise? 
Let us go back a bit further than 5 minutes in history. This bill stems from the personal desires of a few of the politically correct members of the Labour Government—the mountain-climbing tree-hugging  
The Sound of Music -  
watching socks and sandals wearing yodellers who want to force New Zealanders to watch what they think is good for them: a diet of nature documentaries endless reruns of films like  
The Color Purple 
 John Pilger documentaries and peace marches. [ 
Interruption 
]. As that member Jill Pettis said it is about time that New Zealanders watched on television what was good for them. I look forward to the day that we have a “Breakfast Bill” where New Zealanders are forced to eat for breakfast what is good for them too because that is about where we are going. 
As I am on the subject of food I want to say I cannot believe other members of this House who take no responsibility for their own actions and who say that if people get diabetes it is not their fault for drinking Coca-Cola and eating junk food—it is the advertisers’ fault for advertising them on television. Good grief! Whatever happened to taking control over what one eats and drinks? We should stop blaming everyone else. As for children parents have a responsibility to watch what they eat too. 
On Saturday this charter apparently comes into effect. Look at the nebulous ill-defined nonsense that we have in it! It states TVNZ has to be concerned with Maori interests. TVNZ will have to fulfil the objective of personal development. When I ask was the State ever responsible for the personal development of people? The State is responsible for protecting people’s lives and protecting their property not for directing where they should personally develop. The charter does not even state where they will personally develop; it might be backwards for all we know. Mass audience programmes must also deal with minority interests. What on earth does this mean? Does this mean that the  
Holmes 
 show which is a mass audience programme must deal with minority interests? What are those minority interests? Does it have to give voice to something like the “Takaka Floral Society” or the “Parliamentary Wimmin’s Knitting Club”? As for spiritual development this Government callously casts aside the constitutional conventions of the separation of powers. 
Be warned this is coming up again in the Radio New Zealand Amendment Bill The State I remind members of this House is meant to be secular. 
What was wrong with TVNZ that this Government had to fiddle around with a State-owned enterprise that was making $60 million a year and as I said turn it into a Crown-owned company that has already sucked up $10 million of taxpayers’ money to implement the charter? What was wrong with leaving it to New Zealanders to exercise their right to push the off button? 
Labour Governments and I am afraid National ones too should hang their heads in shame that over the years they have appointed tame chairs to the board of TVNZ who have used TVNZ as a cash cow—$60 million in 1999. There was nothing in the State-Owned Enterprises Act or in TVNZ’s statement of intent that stated that $60 million had to be returned as a dividend to the Government. TVNZ could have given the Government $1 million and kept $59 million to make good programmes. 
And who are we going to see on the TVNZ board now? That will be interesting. What assurance can we have from this Government that there will be no political interference from the board? Can United Future assure us that no deal has been done whereby very very close friends of United Future are appointed to the board in return for that party’s support for this bill? Will Craig Boyce the current acting chairman a director of Industry New Zealand and a very very close friend of Jim Anderton be made chairman? Jobs for one’s mates? Cronyism? That is how Governments interfere and manipulate the media and that is why the State should not own the media. Stephen Franks managed to get an amendment passed thank goodness that strengthens the sanctions against political interference. But political interference I say has already occurred with the introduction of this charter. 
The bill is also a document that sets out this Government’s politics of envy. If we look at the clauses that deal with financial reporting we see that the remuneration and other benefits of employees must be stated. This type of clause I say is the “anti – Paul Holmes” clause. This is the Ross Armstrong influence. He was the Prime Minister’s very very close friend—not any more—who rollicked into the position of chairman assisted by his travelling companion Kristy McDonald and said that Paul Holmes earned too much money. Paul Holmes gets up at 4 o’clock in the morning and works until 8 o’clock at night which people on that side of the House probably would not know about. How much is too much money? That is what this clause is about. It is about lopping the heads off tall poppies. Well Paul Holmes had his revenge when he retaliated by describing the chairmanship of Ross Armstrong as creating a climate of fear and it was true. What went on when Ross Armstrong was the chair of TVNZ what he did in terms of morale was the worst kept secret in town. It shows this Government’s cavalier disregard of the integrity of a once-great media company. 
So what should be done? As I said the State has no business owning television broadcasting. The State does not own newspapers and neither should it. I would hope there would be an outcry if the Government tried to nationalise the  
New Zealand Herald  
or the  
Dominion Post 
. How do the employees of TVNZ feel now that they face a future in which there is a high probability they will be Government employees? Does this Government care about that? Has it even thought about it? I do not hold out huge hopes that TVNZ will continue to be supported solely by advertising revenue because if I were an advertiser and I read that charter I would run screaming from the room. 
This Government does not like business. It hates private enterprise. It forgets that advertisers are actually private businesses. But does the charter even mention business? No the charter talks about supporting the arts and featuring sport educational and personal development. There is absolutely nothing in that charter that deals with free enterprise and entrepreneurship. What about business programmes? Are they not as important as personal development? What about programmes on capitalism? And before Government members start criticising what I say I ask them to use their imagination for a moment and imagine if the ACT party were in Government and we drew up the charter. I am sure they would run screaming from the room too. 
The Minister of Broadcasting proudly said that TVNZ is no longer just commercially driven. I say that there is absolutely nothing wrong with media organisations being commercially driven. All that means is giving customers exactly what they want.  
North and South 
 magazine 
is hugely successful. It is totally commercially driven and it features serious current affairs articles. For those who believe that television cannot do the same I have just three letters—CNN.  
Hon JUDITH TIZARD (Associate Minister for Arts Culture and Heritage) 
: 
 It is a great pleasure to rise in support of this third reading of the Television New Zealand Bill. It is a bill that New Zealanders have been calling for for a long time. We had accusations from the last speaker that this bill is about political interference and the politics of envy and she immediately stumbled into personal abuse and smearing everybody who disagrees with her politics. That is a perfect example of why politicians should not be running the news media. However I say to her and to all of the pathetic market-driven wonks in the ACT party who believe that the market is everything that New Zealand has a history of having a mixed economy. There are some things that the State does because the market does not deliver them and because citizens are entitled to services. 
Katherine Rich 
: Don’t you ever watch television? 
Hon JUDITH TIZARD 
: Of course I watch television. 
Katherine Rich 
: What’s your favourite programme? 
Hon JUDITH TIZARD 
:  
Kath and Kim 
 actually. It is absolutely ludicrous to suggest that Government members are somehow or other out of touch. We were elected handsomely only 8 months ago because this Government is in touch with what people in New Zealand want. This bill will change the Government’s involvement in public television for the better. It will change from being a purely profit-driven State-owned enterprise to a public broadcaster that balances commercial social and cultural values. 
As Associate Minister for Arts Culture and Heritage I would say that I have heard more people in support of this legislation than for many bills. Some people who want to go back to the days when Bill Birch balanced his Budget by sucking TVNZ dry by insisting that TVNZ cater to the lowest common denominator—“And if they want current affairs let them buy it!” says Marie Antoinette from the ACT party! For good reason this legislation is broadly supported in this House and in the country. 
SUE KEDGLEY (Green) 
: 
 First of all I want to make it clear that unlike the ACT party the Green Party passionately supports publicly owned public service television in New Zealand. In our increasingly globalised world where our sovereignty our culture our identity and so forth have been steadily eroded we think it is absolutely crucial that we have a strong independent publicly owned television broadcaster that has a very specific mandate and purpose to promote our New Zealand identity New Zealand programmes and so forth on television which after all is the most powerful medium of communication.  
Frankly we think it is disgraceful that on one of our publicly owned channels TV2—the channel I might say that our young people and children watch—there is only 13 percent of New Zealand programmes and there is 87 percent of foreign programmes. This means that our children are growing up learning more about the values and life and attitudes in Los Angeles than they do about their own communities. That is why we passionately support any move that will give a new direction to TVNZ and require it to show more New Zealand programmes. It is the reason that we support the transformation of TVNZ from a predominantly commercially focused State-owned enterprise into a Crown-owned company and why we support the concept of a charter which we hope will give a new direction for TVNZ so that it is editorially driven rather than just ratings-driven as it has been for the last decade.  
The need for having a strong publicly owned television channel is all the more critical as we enter the digital era which pundits are predicting will result in increasing fragmentation of television markets into niche channels with increasing concentration and domination of the broadcasting industry by a small number of large mega-companies that own digital platforms and an environment that will become increasingly hostile and difficult for commercial free-to-air broadcasters. They will find themselves with increasing fragmentation declining audiences and so forth.  
If this is the era that we are to enter it is essential that we try to ensure that TVNZ in this risky and uncertain environment is as strong as financially robust and as financially independent as possible with a healthy income stream the ability to earn revenues from various activities and as much leverage as possible. That is why while strongly supporting the charter in this bill we are totally opposed to the last-minute amendment that arrived like a bolt out of the blue after the select committee stage had ended to split off the transmission arm from TVNZ—the revenue-generating arm of BCL that the previousMinister of Broadcasting described as a wonderful golden goose. It was the transmission arm that quietly contributed money and funding over many years. Some of that money went into New Zealand programming.  
We believe that to separate off that transmission arm will weaken and not strengthen TVNZ. It will shrink the potential revenue base of Television New Zealand eliminate the option of cross-subsidies from the transmission arm and most unfortunate of all it will make Television New Zealand increasingly reliant on advertising revenue at the very precise moment in its history when we are saying: “We don’t want you to be advertising and ratings-driven. We want you to be editorially driven.”  
When looking at this splitting off of the transmission arm the Government asked the accounting firm Arthur Andersen and Co. to investigate the case for splitting it off. Arthur Andersen contemplated this for about 6 long months. In the end that company said that there is no compelling case for separating it off because we could do all of those things that the Minister of Broadcasting said he wanted it to do under the existing arrangements. The Government wanted the transmission arm to focus on its transmission business and get on with it. That is exactly what the structure in the original bill allowed it to do. That was precisely why it was set up with a separate board to focus on the transmission business.  
Some members over here have suggested that the bill has wide support. I want to tell them what the Screen Producers and Directors Association had to say about the prospect of separating off the transmission arm of TVNZ: “We believe the split will have a catastrophic impact in the long term. It will irrevocably damage TVNZ’s potential to remain a strong national presence. We cannot see how such a move will do anything other than hobble TVNZ’s potential to deliver on charter obligations in a meaningful way.” That is what the production industry thinks about this move. The only possible logical explanation for separating it off in this way would be if one were readying it for sale. We can only assume that the hidden agenda of the Government is to ready the transmission arm for sale. 
In our view because of the way the bill has ended up with this last-minute amendment to separate off the transmission arm we have a bill that sends conflicting and indeed schizophrenic messages to Television New Zealand. It is a bill that on one hand gives and on the other hand takes away. On the one hand the bill gives Television New Zealand this new mandate that we will now have new programmes—New Zealand minority spiritual—and a new direction and requirement to make all those local programmes and on the other hand we have taken away the revenue base with which to make those programmes. We have shrunk the revenue base of Television New Zealand and made it more not less dependent on advertising revenue.  
How can Television New Zealand deliver its mandate and make more New Zealand programmes if there is no money to make them? What will happen if the advertising revenue shrinks in the next few years—as is predicted and as all the pundits say? Where will the income come from then? What will happen if a future Government removes the direct subsidy of $10 million that the Government has projected for the next few years? Frankly we like Katherine Rich think that $10 million is a tiny amount on which to base the implementation of the charter. It is a pitiful amount. But what will happen if even that pitiful amount is taken away by a future Government—as it most certainly will be if a National Government ever gets back into power? National has already told us that it will be taking away the subsidy so where will the cash-strapped Television New Zealand turn then to make all of those charter-driven New Zealand programmes?  
The other issue with which we are seriously concerned is the potential that a direct subsidy will inevitably mean political influence. At the back of the mind of the chief executive of Television New Zealand and the board will always be that nagging anxiety about that $10 million direct grant from the Government—if they come up with a programme that the Prime Minister intensely dislikes or if the Government dislikes the election coverage in an upcoming general election. In the back of their minds will always be the question: “Will we find that our subsidy will be reduced next year?”. We need only cast our minds back to 1975 when Mr Muldoon refused to raise the licence fee and made it clear that it was a way of punishing broadcasters for expressing independent or dissident views. The Government has a direct grant that we can hold over Television New Zealand—“He who pays the piper plays the tune.”—and always in the back of those executives’ minds will be that direct grant their concern about not alienating a current Government and the effect that that alienation has for the political neutrality of Television New Zealand.  
We are absolutely delighted that two of our amendments to the charter have been accepted. One requires Television New Zealand to take a leading role in implementing the code of violence. We have excellent codes on violence; it is just that they are completely ignored and no one has done anything to implement them. So now Television New Zealand has an explicit mandate not to show programmes with gratuitous violence etc. and we will be watching that very closely. The second amendment supports the independent industry in New Zealand because already the cash-strapped Television New Zealand casting around for extra revenue is looking at independent producers. It is trying to fleece revenue from independent production houses.  
Hon PETE HODGSON (Minister of Energy) 
: 
 I want to speak briefly to this legislation and to ask Sue Kedgley who has just resumed her seat to reflect please on whether Radio New Zealand or Concert FM are subject to political interference because they have no advertising revenue. Would she please reflect on whether it is possible to have no split between transmission and broadcasting yet have Television New Zealand as a Crown-owned company. No one I think is suggesting that BCL Ltd should be other than a State-owned enterprise. I say about the ACT party contribution that if we have a charter come into place that means that Television One is more different from the other main providers do we not therefore have better choice? Why might the ACT party argue against that? 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: 
 This is a sad day for New Zealand broadcasting. It is a day on which we see in Television New Zealand the era of the bow-tie-and-ballet-tights brigade being ushered in and the day when we see the framework established for our State broadcaster to become a simpering and compliant player in the New Zealand media.  
The third reading stage of a bill is of course the opportunity for members to recount the previous consideration of the legislation in its various stages. That is quite a saga because when this bill was originally introduced we had a very different structure in Television New Zealand. We had a structure consisting of a parent board and two subsidiary boards which was the result of some very considerable work and expense. At that stage the Prime Minister’s very good friend Dr Ross Armstrong was the chairman of Television New Zealand and he went to very considerable lengths to make sure that the structural change sought by officials was substantially modified in order to give him the position of absolute power he demanded. So at very considerable expense a major consulting firm and consultants were wheeled in and the former chairman’s very good friend Kristy McDonald QC was wheeled in to deliver at significant expense to Television New Zealand an opinion about how a format could be devised that would see a parent board and two subsidiaries and why it would not be too bad an idea for the chairman of Television New Zealand to become the chairman also of the two subsidiary companies.  
That was a structure that was put in place in the original bill for one reason and for one reason only—to meet the requirements of the previous chairman the Prime Minister’s very good friend Dr Armstrong to be the chairman of everything that moved in the State broadcaster. This was the “Ross Armstrong structure” in the original bill. Why would it suit the Government so much to accommodate Dr Armstrong’s requirements? Well members should ask themselves about the answer to that question—it suited the Government very well to have its very good friend in the controlling position of every component of the most powerful medium in the country. Miraculously Dr Armstrong left us this bill came back from a select committee and a Supplementary Order Paper emerged that was very different from the format that was introduced. Miraculously the United Future party decided that it would accommodate the Government’s wish to see this particular measure through the House.  
The Associate Minister for Arts Culture and Heritage told us that this bill enjoyed broad support in the House. I want to correct her on that; that is very far from the truth. The simple facts of the matter are that the Greens have told us today that they oppose the bill the ACT party has told us it opposes the bill the New Zealand First Party has told us it opposes the bill and the National Party has said it opposes the bill.  
I want to ask the question again at this final stage: why is it that the United Future party is the only party prepared to help the Government get this bill which will distort the media through the House today? The answer is because it has been bought. 
Mr SPEAKER 
: The member knows he cannot say that. He will withdraw that comment. 
Hon MURRAY McCULLY 
: I withdraw. The members sitting in the House who represent United Future have another chance today to answer the question I asked them at the Committee stage. Have they been promised any directorships on either of the two entities that are being formulated as a result of this bill? Will any United Future persons miraculously pop up on either of those two boards? [ 
Interruption 
] Are those two members saying that that will not happen? Is Mr Smith telling me that that will not happen? Mr Smith is not telling me that it will not happen because Mr Smith knows very well that it will happen. Mr Smith knows that once this bill has been passed we will no doubt see an announcement from the Government that shows what the price tag has been to get United Future to vote for this bill. I say to those two members— 
Hon Judith Tizard 
: I raise a point of order Mr Speaker. You have already pulled up this member for saying that another party’s vote has been bought. He is now saying that we will know the price tag for this vote. I cannot accept that that is within the Standing Orders. 
Mr SPEAKER 
: The first comment was outside the Standing Orders. The second one is right on the edge but I thought I heard Mr Smith’s comments being made very clearly to the member. I ask the member to continue. 
Hon MURRAY McCULLY 
: I am a quick learner. I have a long enough memory to be able to recall in a week or two’s time when the board members are announced the discussion we have had today and on the previous phases of the bill. If there are United Future people—people associated with that party—on either of those two boards then the members who are sitting in the House today will be held to account for their silence on this matter.  
I want to take the opportunity of rehearsing some of the arguments that were made available to the House in the earlier stages of the bill and in particular I invite members of the public who are interested and members of the House who are here to consider some simple arithmetic. We have been told that as a result of this bill we will see the transmission arm of Television New Zealand BCL turned into Transmission Holdings Ltd and become a State-owned enterprise. We have separately seen a statement of corporate intent from the Government which makes it clear that the projection is that the two arms the transmission and the television arm together are going to make a profit of $17.9 million next year and $17.8 million in the year after. We have been told that that includes the $12.5 million that is being delivered to cover charter costs from the Government. In effect we have a $5 million profit being forecast by those two entities combined.  
It is not rocket science to work out that on those numbers the television arm of Television New Zealand is going to be running significant losses. Look at the profits of the transmission arm over the last few years. The Television New Zealand arm is going to be running very substantial losses. I ask members opposite to tell me how those losses are going to be made up. There is only one answer to that question. Television New Zealand will have to go cap in hand to the Minister of Finance on an annual basis. It simply cannot survive on any other basis than the goodwill of the Minister. I ask members opposite: do they really expect members to believe that Television New Zealand’s directors and management will not feel under the slightest degree of pressure that they should earn the $30 million or so they will be asking the Government for to survive each year by appeasing the Government with the quality of their news and current affairs coverage?  
Why is it that in terms of this legislation we have the weakest possible provision as far as editorial independence is concerned? Have United Future members thought about the reason for that watered-down provision? Do they not understand that we are about to enter an era where our State broadcaster the most powerful medium in our country is about to make an annual visit to the Minister of Finance who will no doubt have a conversation with the Prime Minister about whether it can get the $30 million or so it needs to survive? I have worked it out. Members on this side of the House have worked it out. I am surprised that United Future people tell me they have not worked it out. Members of the public are going to work it out. The result of this legislation being passed today will be a very sad very compliant simpering State broadcaster.  
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am pleased to rise in support of this bill. I am very pleased that after a long gestation period the bill is finally having its third reading. 
DAIL JONES (NZ First) 
: 
 On behalf of New Zealand First I say at the outset that we will be opposing the bill. I immediately take up the point made by David Benson-Pope the senior Government whip. He talked about a long gestation period for the bill. The gestation period for this bill began on 20 February 2003 barely a week ago. The bill we are being made to pass by the Labour Party the Progressives and United Future is a totally different bill from that which was introduced into the House on 11 December 2001. It had its first reading in December 2001 it was reported back from the Commerce Committee on 23 April 2002 and its second reading was on 16 October 2002.  
The bill has had no gestation period. I could describe it in many ways that would be totally out of order but clearly it has not been gestated in any way whatsoever. The bill deserves a gestation period and when the Supplementary Order Paper was introduced it should have been referred back to the Commerce Committee so that submissions could be heard and we could hear what the public really thought about it. For the Hon Judith Tizard to say that the public support this bill is an absolute nonsense. The public do not know what is in the bill because largely it has been here only 7 days. The Hon Judith Tizard has absolutely no idea what is in it. She knows as much about the bill as she does about the people of Auckland and their needs—absolutely nothing. No opportunity has been given to the public to consider this legislation. In fact I remember the days when if one behaved like that Geoffrey Palmer would get up and talk about  
Unbridled Power 
.  
This is a clear example of unbridled power by the Labour Party and the United Future party. In less than a year—almost 6 months—the United Future party has taken part in one of the greatest examples of unbridled power one will ever see. A Supplementary Order Paper was brought in changing the bill dramatically from what the select committee suggested and the bill has been ripped through the House in 7 days. That is unbridled power. Of course it is to do with the fourth estate—the most important part of our constitutional process. We would have expected anything to do with control of the fourth estate to go back to a select committee. But no Mr Murray Smith—a lawyer in the United Future party—is not concerned about constitutional matters. The United Future party in general has no regard for the way in which this minority Labour Government is pushing this bill through the House. We are sure that United Future stands to gain something by passing it through the House.  
In fewer than 7 days we have seen a dramatic change in the way in which the bill will operate and the United Future party and the Labour Party Government do not give two hoots about it. We have gone from the provision of a Television New Zealand Crown entity group consisting of a Crown company holding company with two subsidiaries one of which conducts a television business and the other a transmission business to a situation whereby the legislation provides for the existing State enterprise Television New Zealand to be split into a Crown entity conducting a television business and a State enterprise conducting a transmission business. I believe that is a dramatic change in the legislation and I believe that the people of New Zealand were entitled to make submissions on it. Those people have been deprived by United Future and by the minority Labour Government of having the matter properly considered by a select committee. Why was that the case? Were they concerned? I cannot use other words to describe the way in which they might think about it. Were they so greatly concerned that there would be a public uproar about it that they did not want it to go before a select committee? One can only wonder because that chance will not be given to us now.  
One of the interesting things about the bill when it was introduced was that it stated in clause 3(c) that the purpose of the bill was to: “ensure that the subsidiary responsible for the transmission business operates as a successful business:”. That provision has been deleted from the bill. There is no requirement that either part of those new organisations should be commercially successful. Well we know that the one that will not be getting any funds will not be commercially successful. It is doomed from today. They will be going to the respective Minister and the Prime Minister with their hands out asking for more money.  
Someone has mentioned the situation of the Muldoon administration of which I was a part. It came into power only at the end of 1975. For many many years the licence fee through many many Governments was a political hot potato: “Oh no you haven’t been good to us so I don’t think we’ll increase it this year.” That would go on for ever. Various Governments of various hues were involved in what to do with the licence fee. Finally of course it was removed. But whenever a State organisation is dependent in some form or another on the Government for funds one cannot say that the Government will not have some influence on how the media the fourth estate would operate—in this case the television industry.  
The minority Labour Government supported by United Future is leaving our State television system wide open to Government abuse based on the facts as we already know them in New Zealand over many many years. It is an absolute disgrace. Constitutionally it is a disgrace. State television is not meant to be run commercially and it is leaving itself wide open to Government influence. [ 
Interruption 
]  
During the course of the Committee stage which the Hon Judith Tizard who is trying to interject had little influence upon New Zealand First supported a catholic range of amendments to the charter. We felt that it was important that all the ideas put forward by members of this House should be incorporated in the charter. Essentially the charter is just a load of baloney. It will do absolutely nothing. The charter is just a load of baloney. It uses some fancy fancy words but at the end of the day it is a load of baloney. The charter contains some very interesting things but most of it is just absolute rubbish. For example it states that TVNZ will feature programming that contributes towards intellectual scientific cultural spiritual and ethical development that reflects the diverse beliefs of New Zealanders promotes informed and many-sided debate and stimulates critical thought thereby enhancing opportunities for citizens to participate in community national and international life. That is one of about 25 things that are incorporated in the charter. Another one states that it will include in programming intended for a mass audience material that deals with minority interests. How does one possibly do something like that in the one programme? It is an absolute nonsense.  
One of the things that New Zealand First was very concerned about was that there is nothing in the charter that promotes family life. I am disappointed that United Future which has made such a feature of family life when it took so much credit for the new legislation that was introduced last Thursday and when it took credit for its dealings with Michael Cullen failed in all of those dealings to ensure that family life was included in the charter. Despite the fact that the charter is baloney one would have thought that United Future members might have given at least some consideration to having family life included as one of the things that the charter must consider—the promotion and the support of family life.  
I moved an amendment stating that the charter would feature programming of a family nature that supports the family and the development of family life in New Zealand. Regrettably that amendment was lost. One can only try.  
It was opposed by the Labour Party. Darren Hughes the new Labour Party member for Otaki who was the Labour Party whip at the time who voted for the Labour Party saying no he did not support family life. I wonder whether the people of Horowhenua know that their young new member thinks that family life should not be included in something like this. ACT opposed it and the Green Party opposed it. I raised the matter of family support specifically because it is something that is dear to my heart and it has been since 1976 when I first became a member in this House. I supported a Green amendment that included the need to give regard to the environment which was defeated by all other parties in the House. Only the Greens and New Zealand First supported it. I also supported an amendment from Mr Alexander from United Future about violence.  
We are concerned that those organisations have been set up so that they can be sold off. That really is one of the 15 foundation principles of New Zealand First. The way in which those two entities have been set up and established is a prime way for this New Zealand minority Labour Government to sell off anything that is profitable as it has done in the past. I did not hear the Minister Mr Maharey deny that point when he spoke. That is our concern as well. I predict that this minority Labour Government will try to do that in the future. 
A party vote was called for on the question  
That the Television New Zealand Bill be now read a third time. 
Ayes 67 
Noes 47 
Bill read a third time. 
Labour 52; Green Party 7; United Future 8. 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8.