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 that an item on 1 News reporting on the upcoming Budget breached the accuracy standard. The reporter stated the Government unveiled a report the previous day showing the ‘very wealthy pay less than half the tax of the average Kiwi.’ The complainant considered this statement was inaccurate as that report found the wealthiest pay less than half the tax rate of the average Kiwi. While acknowledging this distinction, the Authority considered the brief statement was unlikely to significantly affect viewers’ understanding of the item where the focus was on the upcoming Budget and its omission of a cyclone levy or any ‘major new taxes.’ Further, in introducing the item, the host correctly noted the report found there was a gulf in ‘effective tax rates.’

Not Upheld: Accuracy

The broadcast

[1]  A segment of 1 News, broadcast on 27 April 2023, reported on the upcoming Budget, discussing the omission of a cyclone levy and any ‘major new taxes’ in the Budget and including comments from Prime Minister Chris Hipkins, Chlöe Swarbrick MP, Deputy National Leader Nicola Willis and an economist. The item was introduced as follows:

The build-up to next month's budget is underway and it's being dubbed the ‘no frills’ budget by the Prime Minister, with a cost of living focus. It's noticeable for what's not in it, with Chris Hipkins ruling out a cyclone levy to pay for Cyclone Gabrielle's damage. Instead, the cost, estimated between nine and 14.5 billion dollars will be met by borrowing and reprioritising spending. A wealth tax is off the table, that's taxing an individual's net wealth. Also ruled out in this budget are capital gains tax. That being made clear, hot on the heels of yesterday's revelations about the gulf in effective tax rates between the super-rich and middle income Kiwis. Political Editor Jessica Mutch McKay joins us shortly to talk over the implications. First though, her report on how Budget 2023 is shaping up.

[2]  In her report on Budget 2023, Mutch McKay stated:

The Government unveiled a report yesterday showing the very wealthy pay less than half the tax of the average Kiwi. So are we being softened up for a campaign tax announcement?

The complaint

[3]  Bryan White complained Mutch McKay’s statement ‘The Government unveiled a report yesterday showing the very wealthy pay less than half the tax of the average Kiwi’ breached the accuracy standard of the Code of Broadcasting Standards in New Zealand. This was on the basis the report referred to (the High-wealth individuals research project¹ by Inland Revenue | Te Tari Taake) stated the wealthy paid effectively half the tax rate as the average Kiwi, rather than half the tax.

The broadcaster’s response

[4]  TVNZ did not uphold the complaint, considering the statement was not a material point of fact in the context of a report on the upcoming Budget, and that ‘an average viewer would understand from [Mutch McKay’s] comment that the very wealthy pay less tax than average New Zealanders for their earnings.’

The standard

[5]  The purpose of the accuracy standard² is to protect the public from being significantly misinformed.³ It states broadcasters should make reasonable efforts to ensure news, current affairs or factual content is accurate in relation to all material points of fact, and does not mislead. Where a material error of fact has occurred, broadcasters should correct it within a reasonable period after they have been put on notice.

Our analysis

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

[7]  As a starting point, we considered the right to freedom of expression. It is our role to weigh up the right to freedom of expression against any harm potentially caused by the broadcast. We may only intervene when the limitation on the right to freedom of expression is demonstrably justified in a free and democratic society.⁴

[8]  The standard is concerned only with material inaccuracies. Technical or other points unlikely to significantly affect viewers’ understanding of the programme as a whole are not considered material.⁵

[9]  We acknowledge the complainant’s concern that the IRD’s report found the ‘wealthiest New Zealanders pay tax at half the rate’ of the average Kiwi.⁶ The statement that the report showed ‘the very wealthy pay less than half the tax of the average Kiwi’ is therefore technically inaccurate, if interpreted literally.

[10]  However, taking the item as a whole, we reached the conclusion the statement would not have significantly affected viewers’ understanding of the report and therefore was not material. The key factors supporting our view are:

• The host correctly noted the report found there was a gulf in ‘effective tax rates’ when introducing the item.
• The particular item was focused on the upcoming Budget, described as a ‘no-frills’ budget, and the lack of cyclone levy or any ‘major new taxes’.
• The statement was brief, and made once in the context of a five‑minute report on the Budget.
• The complaint is based on a literal interpretation of the statement. We consider most viewers would have understood the statement as referring to tax rates rather than actual amount of tax paid (and that the very wealthy did not pay less tax, in terms of sum, than the average Kiwi), particularly given then recent coverage of the issue.⁷

For the above reasons the Authority does not uphold the complaint.
Signed for and on behalf of the Authority

Susie Staley
Chair
3 October 2023

Appendix

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

1  Bryan White’s formal complaint to TVNZ – 27 April 2023

2  TVNZ’s decision on complaint – 23 May 2023

3  White’s referral to Authority – 14 June 2023

4  TVNZ’s confirmation of no further comment – 24 July 2023

¹ Inland Revenue | Te Tari Taake “High-wealth individuals research project” (April 2023) <www.ird.govt.nz>
² Standard 6, Code of Broadcasting Standards in New Zealand
³ Commentary, Standard 6, Code of Broadcasting Standards in New Zealand at page 16
⁴ Introduction, Code of Broadcasting Standards in New Zealand at page 4
⁵ Guideline 6.2
⁶ Thomas Coughlan “IRD report: Wealthy pay half tax rate of average Kiwis” NZ Herald (online ed, 26 April 2023)
⁷ See, for example, Felix Desmarais “Richest Kiwis effectively pay lower tax rate than ordinary NZers – report” 1 News (online ed, 26 April 2023)