Hopeless KiwiRail bailout reporting by Radio New Zealand

This morning on 9 to noon on Radio New Zealand, Kathryn Ryan, the compere of the program, repeatedly claimed that the government pumped $1 billion into the KiwiRail Turnaround Plan between 2010 and 2014. I was so annoyed by this that I made a broadcasting standards complaint while the program was still being broadcast on my mobile as a one finger typist.

The report on 9 to Noon was in response to the government putting KiwiRail on notice, giving it two years to identify savings and reduce Crown funding required or risk the possibility of closure. Since KiwiRail was acquired in 2008 for $665 million as a commercial investment, Crown investments (taxpayers bailout) totalled $3.4 billion – see Figure 1.

Figure 1: State-owned enterprise welfare, Vote Transport and Vote Finance (KiwiRail), Budgets 08/09 to 15/16

Source: New Zealand budget papers, various years.

Table 1 shows that the KiwiRail Turnaround plan of $1.272 billion since the 2009-10 Budget is only a small part of the bailout of KiwiRail. 9 to Noon simply ignored the $210 million in the 2015 budget for KiwiRail for no explicable reason and instead talked about a $1 billion Turnaround plan rather than the $1.272 billion Turnaround plan.

Table 1: State-Owned Enterprise welfare, Vote Transport and Vote Finance (KiwiRail), Budgets 2008/09 to 2015/16, $million

	08/09	09/10	10/11	11/12	12/13	13/14	14/15	15/16
New Zealand Railways Corporation Loans		405	55	250	108		11
KiwiRail Turnaround Plan		20	250	250	250	94	198	210
KiwiRail Equity Injection					323	25		29
Rail Network and Rolling Stock Upgrade		105	71	10
New Zealand Railways Corporation Loans	55
New Zealand Railways Corporation Increase in Capital for the Purchase of Crown Rail	376
Crown Rail Operator Loans	140
Crown Rail Operator Equity Injection	7
Total	578	530	376	510	680	119	209	239

Source: New Zealand budget papers, various years.

Other parts of the bailout of KiwiRail include $405 million in loans to the New Zealand Railways Corporation in the 2009-10 budge – see table 1. There was a $323 million equity injection in the 2012-13 Budget – see table 1. KiwiRail has also caused write-downs in the Crown balance sheet of an incredible $9.8 billion since it was repurchased in 2008.

9 to Noon ignored at least two thirds of the cost to the taxpayer of bailing out KiwiRail by only limiting its reporting to part of the KiwiRail Turnaround Plan. It ignored the contribution in the most recent budget to that plan. That does not meet broadcasting standards of accuracy or professional responsibility.

Any reasonable listener will infer, as I did when listening, that the entire cost of the bailout of KiwiRail is represented by the Turnaround Plan of about $1 billion. If listeners were left with that impression, they were misled by 9 to Noon and Radio New Zealand.

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