RNZ’s Lisa Owen takes to RNZ’s chair over $12m budget blowout

After revealing it has dug itself into a financial hole, the only ray of light for RNZ this afternoon is that Checkpoint's host showed the type of interviewing, without fear or favour, a public broadcaster should offer.

There’s no other way of describing RNZ’s position today: the public broadcaster is in deep shit. 

This afternoon, RNZ published its annual report and confessed to a budget blowout of almost $12 million, an unbelievable figure given it is publicly funded and its entire income is just over $70m a year. 

The cause? A parade of errors and overspending. It wrongly counted $2 million from land sales as income in its budget, staff costs ran $3.2m over budget, including $1.4m in redundancy payments, and running costs went $6.4m over budget, much of it tied to RNZ’s move into the TVNZ building in central Auckland.

Until mid-October, the board was expecting a $400,000 surplus for the year. That’s around the time RNZ’s chief financial officer Hilary Parker resigned suddenly, and RNZ board member Richard Dellabarca jumped in to act in her vacated role.  

But wait, there’s more: RNZ expects to lose another $7.8m this financial year.

Now, the broadcaster will launch an independent review and cut 60 full-time jobs – or about one in six – by March. 

The only ray of light for RNZ this afternoon is that one of its journalists, Lisa Owen, showed the kind of interviewing a public broadcaster should offer – no fear, no favour – as she took to RNZ’s board chair Brent Impey live on Checkpoint.

Here are some of their frankest exchanges: 

Brent Impey: The board was unaware of anything other than a projected $400,000 surplus until mid-October.

Lisa Owen: Does that make the board incompetent?

Impey: I think the responsibility has to go at various levels. There’s senior management, there’s the CEO, there’s the audit and risk committee, and whatever the audit and risk committee did or didn’t do.

***
Owen: The CEO Paul Thompson says he accepts responsibility. Why is he still in the building? Why is he the CEO?

Impey: He’s given notice and he finishes at the end of December. [Thompson's resignation earlier this year came before any financial revelations.]

Owen: That’s $80,000 more in salary if he sticks around. Why. Is. He. Here?

Impey: He’s got a job to do over the next six weeks. He has fully accepted responsibility for what has happened and he did that today, as I understand, in the staff announcement.

***

Owen: In terms of your accountability as a board, you are the chair now, you weren’t at the time, but you were on the board, how could you have missed this? Were you not asking the right questions or enough questions?

Impey: Fair question. If I look at myself, I do take joint responsibility as a board member. On a personal note I wasn’t on the audit and risk committee, in fact I was on the editorial standards committee. Then there are some quite interesting things that flow from that, Lisa. If management has been provided with consistent monthly information on what the financial state of the business is, does the CEO and others have a right to rely on that information? Similarly to the audit and risk committee, certainly through to the board. That is why we’re going to conduct this independent review.

***

How is the organisation so dumb, Brent, to not see $12 million of money going down the gurgler?

Impey: I couldn’t agree more, in fact it’s almost indescribable, incomprehensible to have got to this position. 

Owen: Yet you’re all sitting here with your jobs?

Impey: Yes, someone’s got to run the place, don’t they? What do you suggest?

***

Owen: Redundancies. How many are there going to be and from what areas? 

Impey: A redundancy plan – a restructuring plan –has been put to the board. It proposes that the number of staff – there were 18 already that had previously been signalled – there will be a further 40 redundancies which will reduce the staff from 347 to 289, and we’ve asked the management right across the board to come back with their proposals.