BSA Decisions Ngā Whakatau a te Mana Whanonga Kaipāho

Summary  

[This summary does not form part of the decision.]

The Authority has not upheld a complaint about an item on The Project, which discussed the financing of the Government’s $50 billion COVID-19 rescue and recovery budget. It suggested New Zealanders are borrowing this money from the Central Bank in the form of payment for Government bonds. The complainant argued this was inaccurate because New Zealanders are borrowing the money from private institutions. He also complained the broadcast confused direct monetary financing with quantitative easing by suggesting the Reserve Bank was buying bonds directly from the Government (rather than from private institutions). The Authority found the broadcast was materially accurate overall and unlikely to mislead viewers.

Not Upheld: Accuracy

The broadcast

[1]  An item on The Project, 16 September 2020, discussed the financing of the Government’s $50 billion COVID-19 response:

Jesse Mulligan:           In May, Finance Minister Grant Robertson borrowed big, unveiling his $50 billion rescue and recovery budget…So who are we borrowing that money from? Our own Central Bank.

Jarrod Kerr:                 The Government issues a piece of paper that says IOU, and the Central Bank buys it, and then pays it back down the track.

Mr Mulligan:                This time last year much of our debt was foreign owned, but now our Central Bank has picked up the tab…

Mark Richardson:       We've borrowed this money off ourselves, and we could easily just say, bugger it, let's not pay it back, let's default on ourselves, but everyone understands the intricacies of quantitative easing and that's just not an option.

The complaint

[2]  Mr Cliff Hall complained the broadcast breached the accuracy standard:

• ‘We are borrowing the money from private banks, not our central bank.’
• ‘This is a critical error on a very important matter. For if in fact the government were borrowing from the central bank directly there may not be an obligation to repay the money or pay interest, whereas when the government borrows from a private bank there most certainly is that obligation to repay the principle and pay interest.’
• ‘What Jarrod is describing is “direct monetary financing”, which is NOT happening. The Reserve Bank is actually doing “Quantitative Easing” where the Reserve Bank buys the government bonds (“IOU’s”) held by private banks and other financial institutions, at a premium. This is the Reserve Bank effectively buying old government debt off the banks. In a completely separate operation the private banks loan new money to the government by buying government bonds (“IOU’s”).’
• ‘This is not just semantics. There is a massive difference between doing what we are doing and doing what you claimed we are doing. Direct monetary financing would have huge benefits for the country, whereas borrowing from private banks as we are doing loads future generations with debt.’
• ‘This error amounts to significant misinformation and hurts the cause of monetary reformers who are working so hard to educate the public on how money actually works.’

The broadcaster’s response

[3]  MediaWorks did not uphold Mr Hall’s complaint for the following reasons:

• ‘The Reserve Bank of New Zealand buys the bonds out of the market (off banks, insurance companies, superannuation funds and foreign holders). In essence, the Reserve Bank is creating electronic money to buy government bonds (IOUs) in a secondary market.’
• ‘As New Zealand Government Bonds are held on the Reserve Bank of New Zealand balance-sheet, not private banks, we stand by the reporting in this broadcast.’
• ‘The Project was advised that the Government is in effect borrowing money off the central banks - the point in the story has been simplified for ease of understanding but is accurate.’
• Comments by Mark Richardson at the end of the item drew attention to the fact that what was being discussed was quantitative easing.

The standard

[4]  The accuracy standard¹ protects the public from being significantly misinformed.² It states that broadcasters should make reasonable efforts to ensure any news, current affairs or factual programme is accurate in relation to all material points of fact, and does not mislead.

Our findings

[5]  We have watched the broadcast and read the correspondence listed in the Appendix.

[6]  We have considered the right to freedom of expression, which is our starting point. This includes the broadcaster’s right to offer a range of information and the audience’s right to receive it. We may only intervene and uphold a complaint where the broadcast has caused actual or potential harm at a level that justifies placing a limit on the right to freedom of expression. For the reasons below, we have not found such harm in this case.

Accuracy

[7]  The audience may be misinformed in two ways: by incorrect statements of fact within the programme; and/or by being misled by the programme.

[8]  The requirement for accuracy does not apply to statements which are clearly distinguishable as analysis, comment or opinion, rather than statements of fact.³ Where statements of fact are at issue, the standard is concerned only with material inaccuracy. Technical or unimportant points unlikely to significantly affect the audience’s understanding of the programme as a whole are not material.⁴

[9]  Being ‘misled’ is defined as being given ‘a wrong idea or impression of the facts’.⁵ Programmes may be misleading by omission, or as a result of the way dialogue and images have been edited together.⁶

Does the accuracy standard apply?

[10]  The statements in the broadcast, ‘So who are we borrowing that money from? Our own Central Bank’, and ‘The Government issues a piece of paper that says IOU, and the Central Bank buys it, and then pays it back down the track’, are statements of fact to which the requirement for accuracy applies.

Was the broadcast inaccurate or misleading?

[11]  How the Government was to fund its $50 billion COVID-19 rescue and recovery budget was a matter of significant public interest. The broadcaster has helpfully endeavoured to explain this funding, presenting a complex economic story in a simple and accessible way for its viewers.

[12]  We acknowledge that the broadcast’s paraphrasing of certain points may have led to the loss of technical accuracy in some respects. However, the broadcast was materially accurate overall. We are satisfied it was unlikely to mislead viewers.

For the above reasons the Authority does not uphold the complaint.

Signed for and on behalf of the Authority

Judge Bill Hastings

Chair

22 June 2021    

Appendix

The correspondence listed below was received and considered by the Authority when it determined this complaint:

1  Cliff Hall’s formal complaint – 17 September 2020

2  MediaWorks’ response to the complaint – 14 October 2020

3  Mr Hall’s referral to the Authority – 11 November 2020

4  MediaWorks’ confirmation of no further comment – 25 November 2020

¹ Standard 9 of the Free-to-Air Television Code of Broadcasting Practice
² Commentary: Accuracy, Broadcasting Standards in New Zealand Codebook, page 18
³ Guideline 9a
⁴ Guideline 9b
⁵ Commentary: Accuracy, Broadcasting Standards in New Zealand Codebook, page 18
⁶ Commentary: Accuracy, Broadcasting Standards in New Zealand Codebook, page 19