RADIO BROADCASTING.

Otago Witness, Issue 3830, 9 August 1927, Page 68

RADIO BROADCASTING.

LOAN FROM THE GOVERNMENT.

PRIME MINISTER’S EXPLANATION.

WELLINGTON, August 3. In the House of Representatives to-day Mr H. E. Holland (Buller) asked tluj Postmaster-general: (1) Under what legislative authority was the New Zealand Broadcasting Company loaned £15,000 by the Government? (2) Is it a fact that the Broadcasting Company has been granted an extension of its contract for a further term of five years?

Mr Nosworthy (the Postmaster-general), who is absent in the south, replied :—(1) The amount was loaned out of post and telegraph working expenses on the approval of Cabinet, and the item will appear in this year’s Estimates. (2) No. The extension is for one year and five months.

Speaking on the subject, Mr Holland said that, without any statutory authority, the Government had loaned £15,000 to a private concern in regard to which steps should have been taken to keep it within the control of the Government itself. There was, he said, no justification whatever for such a loan. Moreover, he said, the private company which had control was a partisan company. It had broadcasted a speech of the Prime Minister’s, a facility that was not available to any other of the political parties. Mr Coates said that statement was wrong. Mr Holland: I understand that was so. Mr Coates : I think the hon. gentleman is quite mistaken. Mr Holland: I am sure of it. The Christchurch papers reported that the speech was broadcasted from Christchurch. Mr Wilford: Is it not in competition with the post office? Mr Holland : Undoubtedly. Why was that amount lent? Why the necessity? Is it a company that is in such a bad wav that it must come to the Government for a loan to carry out its work, and what is the security given for the loan? Mr H. G. R. Mason (Eden) said that one of the principal men in the company was also a prominent man in the New Zealand Co-operative Dairying Company. Most of the Labour members anj some members of the Liberal Party also spoke on the subject in somewhat similar terms. It was alleged that prominent members of the company were strong supporters of the Reform Party, and that the Post Office collected the fees from the public for the company. Mr P. Fraser said that the control of the company had been placed in the hands of Messrs Goodfellow and Harris. The Prime Minister (Mr J. G. Coates) explained the position at length. He referred to the arrangements in connection with other proposed broadcasting companies which bad broken down for various reasons, one being the inability to raise sufficient capital. After a time the New Zealand Dairying Company applied for a license in Auckland. The Government was then faced with the question whether it was advisable to allow broadcasting stations to be erected indiscriminately all over the country or only at definite points in New Zealand. After discussing the matter with its technical advisers, it was decided that it would be unwise to issue licenses indiscriminately, and it seemed to him that the best alternative would be for the Dairying Company to join with those other stations in the construction of four stations at Auckland, Wellington, Christchurch, and Dunedin. From that time ho (Mr Coates had very little to do with it directly. Eventually the arrangement was made when Sir James Parr was Post-master-general. The general feature of the arrangement was that the company must give a good service to listeners-in. A Labour Member: We lent them public money.

Mr Coates: Yes, that is true—£ls.ooo. It was agreed to by Cabinet at 6 per cent., the repayment to begin three years after the money was lent and to be renaid at the end of the contract in five years. The money was lent much on the same lines as advances to coal mines and gold mines, and in several cases to local authorities. The company had the right to erect four stations eventually. In regard to the size of the station, it was thought by the Government that it should be one capable of broadcasting day and night from New Zealand to any place in the South Pacific. That had altered almost entirely the financial arrangements of the company, because the Wellington station was to be 10 times more powerful than the stations at Christchurch or Auckland. The matter was considered by the Government after being advised by its technical experts, and it was decided to have a station that could be kept going in any national or international emergency, and one that would reach out right through the Pacific. It was then that the Government decided to advance the £15,000 to the company as security. He understood that the Government had a first cal] on the station equipment, etc. An Hon. Member: The bank will have the first charge. Mr Coates; The first charge will be over several stations —Dunedin, Christchurch, Auckland, and Wellington. I see no danger at all provided the company gives a good service to the listeners-in-— one of the best they can give. An Hon. Member: You have no control. Mr Coates: I think we have considerable control. We are anxious to see the company make a success of it. The day may come when it may be necessary for the Government to do the same as in other countries —take the companies over and appoint a board in order that, broadcasting may be regulated. I think you will find that every necessary precaution has been made. Mr Tapley complained that so far Dunedin had been overlooked.