Further cuts will handicap TVNZ: MPs

Cutting back further on TVNZ's news and current affairs budget is short-sighted and will lead only to a downward spiral in the broadcaster's ability to operate in a competitive environment, Opposition MPs say.

It was reported today an intention by TVNZ to cut $5 million from the news and current affairs budget could affect up to 75 jobs, and would involve downgrading its Wellington and Christchurch bureaus and centralising operations in Auckland.

Broadcasting Minister Jonathan Coleman said the measures were an operational matter, so it would be inappropriate for him to comment.

Proposals follow a cost-cutting exercise last year in which 80 jobs were shed.

Labour's broadcasting spokesman Brendon Burns said cuts might temporarily assist the bottom-line and allow for an increased flow of dividends to the Government, but it would further impact on the company's viability.

Mr Burns said TVNZ was a market leader in free-to-air television because of its strong local content, built around evening news and current affairs programmes.

"On-going cuts to those will make them less compelling to viewers who already have plenty of other options. Added to that, there are very real worries that TVNZ is reducing its other New Zealand content, especially in drama and documentaries."

Meanwhile, TVNZ was "cannibalising" itself by providing some content exclusively to Sky TV from May, which would provide short-term gains but at the cost of viewers on TV1 and TV2.

Despite the broadcaster's shaky financial state, Dr Coleman has asked TVNZ to look at turning TVNZ 7 into a quality public broadcasting channel, funded by the commercial operations of TV1 and TV2.

Mr Burns said TVNZ needed to look seriously at the competition it faced from Sky and investigate reviewing broadcasting competition issues.

Green Party broadcasting spokeswoman Sue Kedgley said making more cuts to news and current affairs in order to squeeze out higher profits and a higher government dividend was an "idiotic" strategy when the prime news and current affairs time slot was critical in pulling viewers.

"A drop in audience share will then affect advertising revenue resulting in an ever increasing downward spiral," she said.

Centralising in Auckland also presented a risk that news would become weighted towards Auckland issues.

TVNZ made a profit before interest and tax of $10.1 million last year. That shrank to $2.1m after tax, interest and restructuring costs.