RNZ-TVNZ merger: Veteran Kiwi producer says draining NZ On Air's funding will 'wipe out local production companies.'

The veteran Kiwi producer known for Whale Rider and Shortland Street says the Government's decision to siphon off $40 million of NZ On Air's funding will "wipe out local production companies".

The funding will go to the new mega-entity of TVNZ and RNZ drastically cutting the funding available for other producers.

Shows like 7 Days, Head High and Westside are made by independent local producers only possible with a subsidy from New Zealand on Air.

There are fears they could now be on the cutting block now, due to the proposed creation of Aotearoa New Zealand Public Media (ANZPM) - a new media monster made by merging TVNZ and RNZ.

"It’s the biggest broadcasting policy change in a generation," Screen Production and Development Association president Irene Gardiner said.

“No one has made clear to us how much money is still going to be with NZOnAir to be spent on local production across all of the other platforms, and just exactly how much money from local production is going to be with the new ANZPM,” Gardiner said.

Founder and publisher of The Spinoff Duncan Greive said the new entity might be able to out-compete the private sector, not only on talent and programming, but by offering low rates for advertising.

"This is the government's big attempt to say, actually, we're going to create public media to serve everybody. If that succeeds, that's great, it’s much more equitable than the current situation,” Grieve said.

“But if it doesn’t, it’s a very large amount of money going into this entity. It’s also just a big break from what has historically been the way that we’ve gone about this, which is for 30 odd years we’ve had NZ On Air as the way we fund public media.

“This is a huge sea change away from that, which functionally means a bit less NZ On Air funding flowing out into the private sector and a lot more into the state’s own media entity.”

Those across the TV and film industry say the legislation is being rushed - and the funding available for independent producers will drastically shrink.

ANZPM will get about $500 million annually in government funding and advertising revenue.

Next year, NZ On Air would have had $145.7 million to fund content and platforms but $84.8m of that is now being absorbed by ANZPM.

Half of that is the traditional operating cost of RNZ - leaving NZ On Air with $61 million to fund things like drama, comedy, Pacific radio, captioning and music.

John Barnett, the producer behind shows Outrageous Fortune, The Almighty Johnsons, and the blockbuster Whale Rider, said it's bad for all New Zealanders.

"Companies are going to collapse, people are going to lose jobs."

Barnett said changing the way funding will be used means New Zealanders will miss out on content.

"Taking away that funding means that neither the new organisation nor New Zealand on Air actually have enough money to make the things we all watch, the things we grew up with."

But Broadcasting Minister Willie Jackson is writing off the concerns.

"I think there's some unnecessary panic at the moment."

A number of high-profile producers Newshub approached did not want to speak on the record for fear of falling out of favour with the new media behemoth that will soon have the lion's share of commissioning funding.

Irene Gardiner says it’s critical that local production is protected.

"It's to do with national identity, the New Zealand language, New Zealand stories and the impact that has on our cultural life," she said.

Public media expert Peter Thompson said the draft legislation has a number of gaps.

"I think that's one of the reasons why there's been some concern from the commercial sector because they're not clear whether or not this new entity will compete directly with them, or whether it's going to complement their functions."

There's not much time left - the goal is to merge TVNZ and RNZ by July next year.

"What's happening with the public media entity is collaboration," Jackson said.