The media needed its government life ring, writes Stephen Parker, but now it has served its purpose.

The rescue package designed to help media outlets ride out the Covid lockdown has been underspent, and by a wide margin.

A briefing to Ministers on the outcome of emergency cashflow payments to media outlets has been released to Newsroom under the Official Information Act.

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The document says the $50 million assistance package, approved by the Government in April last year, brought financial stability to the media sector – although $10 million of it remains unallocated.

Much of the unallocated funding is in the pot for subsidising NZ On Air fees paid by media organisations when commissioning content.  There are also unallocated funds from transmission fee waivers, and a supplementary fund.

The life ring was needed 

A Ministry of Culture and Heritage briefing to Broadcasting and Media Minister Kris Faafoi, and Finance Minister Grant Robertson, flags the success and shortfall of the media funding package.

It says the Level 4 Covid lockdown triggered a sharp decline in advertising which had a severe impact on many media outlets, leaving them in a financially perilous state.

Emergency funding was a high priority, especially at a time of high demand for news and information.

One year on, officials say they are confident the speed and breath of the emergency cash flow support eased the pressure on the media sector. They also say the emergency fund is underspent by $10m.

Left over in the kitty

As part of the package, $16.5m was put aside to subsidise the cost broadcasters pay when they commission NZ On Air content.  This fund was also intended to incentivise local content commissioning throughout the year.

As it turns out officials say $7.52m, just under half of this initiative, will still be unallocated by the middle of this year.

Further pockets of unused funding in other initiatives add to the $10 million underspend. This includes $1.64m unallocated from the transmission fee waiver scheme (a $21 million dollar pot which favoured broadcasters) and $1.74m was left over from the supplementary fund (an $11m dollar initiative which included one off grants of over $12,000 to 335 magazines and small newspapers).

The one fund fully depleted was the $1.5m set aside for government agencies to purchase subscriptions from small news websites.

Overall, the $10m unallocated total represents 20 percent of the emergency rescue package.

In the briefing officials don’t offer reasons why the NZ On Air subsidy was not fully used.  In all likelihood it comes down to the difficulty with predicting the implications of lockdowns on media production..

As a saving grace argument, the officials point out the unallocated funding was still useful as a back-up pot of cash should more lockdowns have occurred late last year or early this year.

Days are numbered for the kitty

While the Ministry of Culture and Heritage is confident the rescue package provided the necessary shot-in-the arm to ease the pressure faced in the media industry it also believes that time has passed and … “there is less likely need for further short term cash flow relief.”  

What’s more, the unallocated funds could be handed back with Ministry officials…. “not recommending using the remaining funds to extend any of the existing initiatives or undertake new ones.”

That recommendation comes despite the report saying NZ On Air indicated it wants to use the $7.5m to rollover into the next financial year, effectively keeping the subsidy operating.

Without doubt this would have been a further cashflow prop for television and radio broadcasters, as well as for the major websites that commission NZ On Air content. Yet it seems a rollover is unlikely.

MCH officials have blocked this proposal advising Ministers that it…”may lead to an expectation and dependence in the long term.”


If anything, the remainder of the financial year for the media emergency funding package is being marked by a reverse cash flow with media outlets paying back money to the government.

This is the downstream reality of the Advanced Government Advertising Initiative operating from the $11m supplementary fund.

In the scheme 31 media organisations were given $4.83m in advanced payments for future government use of advertising space.. 

It was designed to help short term cash flow for media outlets as advertising dried up during lockdown.

However, beneficiaries of this initiative are required to repay the loans back to the Ministry as their business as usual government advertising work resumed directly with other government agencies.

Three organisations, NZME, Stuff and TVNZ, had secured loans payments of more than $1 million and have been reporting and repaying payments each month. A remaining 28 organisations are reporting and repaying on a quarterly basis through to the middle of this year.

This money round-about does have an impact on the balance sheet of the media rescue package, which has always been headlined as $50m.

One year on, the reality of what has come from off the MCH balance sheet is $35m.  This is due to the $10m of underspends, and $5m in loans being returned under advance advertising payments. 

The emergency cashflow funding for the media has served its purpose.  And the final price tag wasn’t nearly as high as advertised.

Stephen Parker is a former political editor for TV3. More recently he was the Chief Media Adviser at MFAT, and also worked in the Foreign Minister's office of both National and Labour-led governments.

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