About the initiative

A key focus of the first package of support for the media sector in response to the impact of COVID-19 is to provide near term cashflow relief. Of particular importance is providing this relief in a manner that that will reach a wide range of local media organisations and channels, so that we support media plurality.

Under this initiative Manatū Taonga Ministry for Culture and Heritage (MCH) will arrange payments in advance to local media businesses for advertising that will be placed during 2020/21 by core government organisations (32 government departments, 4 departmental agencies and 3 non-public service departments). The advance payments will be based on average advertising revenue received from those core government organisations over the last two financial years. This will bring forward up to $9 million worth of payments to local media businesses to provide cashflow relief for those businesses experiencing a revenue loss as a result of the COVID-19 outbreak and response.

Media businesses will repay the advance payments through the course of the 2020/21 financial year, as they receive advertising business from the core government organisations.

MCH is now seeking applications from local media businesses for this initiative. The eligibility criteria and application forms are below.

Eligibility

As one part of a range of initiatives within the first package of immediate support for the media sector, this initiative serves to reach those local media businesses that fit the following criteria:

  • Received Government advertising revenue in the current (2019/20) and/or previous (2018/19) Government financial year (see FAQs below for precise dates)
  • Have experienced a revenue drop (or predicted revenue drop) of at least 30% attributable to COVID-19 – this can be demonstrated through successful access to the Government wage subsidy scheme
  • Have taken reasonable efforts to mitigate the impact of COVID-19.

Application process

Once a media company has established if it is eligible to take part in the initiative (see the eligibility criteria above) complete the Application Form and Template for providing previous two years government advertising and send it to [email protected] no later than 29 May 2020

Estimated timeline

Below are the key stages in the roll out of this initiative.

Note - the target dates were updated 28 May.

  • Applications open: 18 May – 29 May 2020
  • Applications assessed:  18 May – 12 June 2020
  • Applicants advised of the outcome of their application: Week of 15 June 2020
  • Advance payment made to successful applicant: commencing Week of 15 June 2020

Frequently Asked Questions and Answers

1. What is a local media business?
For the purpose of this initiative a local media business is defined as:

  • A business that generates news or current affairs content that is focused on the New Zealand market (or a regional or local market in New Zealand);
  • A business that employs journalists in New Zealand;
  • A business that has an operational presence in New Zealand; and
  • A business that pays tax in New Zealand.

2. What are the exact dates you will use to obtain an average spend over the previous and current Government financial years?

  • Funding for media businesses will be based on the average annual revenue from Government advertising over the last two years (or a single year if advertising was only placed in one of the last two financial years).
  • Dates will be:
    • 1 July 2018 to 30 June 2019 for FY18/19
    • 1 July 2019 to 29 February 2020 for FY19/20
  • As the current financial year is still in progress, we will be using 8 months of spending data to forecast what the remaining 4 months was likely to have been.

For example: Government spent $14, 000 with Joe Blogs Media between 1 July 2018 to 30 June 2019 and then another $10,000 with Joe Blogs Media from 1 July 2019 to 29 February 2020. The average spend will be calculated as $14,400 a year using the following calculation:

$14,000 + $10,000 = $24,000

$24,000 ÷ 20 months = an average spend of $1,200 a month

$1,200 x 12 months = $14,400 average yearly spend by government

3. What does “at least 30% decline in revenue” mean?
For the purpose of this initiative this means a business has experienced at least a 30% decline in:

  • actual revenue, or
  • predicted revenue (e.g. for businesses who have seen a reduction in advanced bookings for advertising space), and
  • that decline is related to COVID-19.

The business must have experienced this decline between January 2020 and 9 June 2020.

Note: Receipt of the Government wage subsidy scheme may also be used to measure these criteria.

Definition of revenue - Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted.

Determining a decline in revenue - To determine a decline in revenue, the business must compare one month’s revenue against the same month the previous year (e.g. February 2020 compared with February 2019). The revenue of the month in the affected period must be at least 30% less than it was in the month it was compared against.

Businesses operating for less than a year or that have high growth - New businesses which have been operating less than a year or high growth businesses (e.g. that have had a significant increase in revenue) can apply for support under the scheme. To determine whether these businesses meet the 30% decline in revenue assessment, they must compare their revenue against a previous month that gives the best estimation of the revenue decline related to COVID-19. E.g. 30% loss of revenue attributable to COVID-19 comparing January 2020 to March 2020.

4. What qualifies as ‘reasonable efforts’ to mitigate the impact of COVID-19?
For the purpose of this initiative a business must demonstrate that it has taken active steps to mitigate the financial impact of COVID-19 on its business. This could include:

  • drawing from cash reserves, equity, or debt capital markets (as appropriate)
  • activating your business continuity plan
  • making an insurance claim
  • proactively engaging with your bank to seek bank funding
  • right-sizing your business
  • making decisions about capital expenditure, or through relationships with creditors or customers.
  • seeking advice and support from, the Chamber of Commerce, a relevant industry association, or the Regional Business Partner programme.
  • applying and being successful in accessing one or more of the following:
    • the wage subsidy
    • the Business Finance Guarantee
    • COVID-19 leave

5. When will I find out if my application has been successful and I could expect payment to be made?

  • All applicants will be notified of the result of their application by 5pm 12 June 2020 at the latest. For successful applications this will include a summary of the payment(s) MCH will make and when. We may contact applicants prior to this if we need more information
  • MCH will advise applicants of the exact timing and any phasing of payments as appropriate following the review of their application.

6. I work for Government and handle the purchasing of advertising, how is this going to affect me? 
Government departments should continue to place their advertising in accordance with their usual practices. Media businesses will be required to repay the advance payments through the course of the 2020/21 year, but this process will be managed between MCH and the media businesses.  

MCH will request some reporting from other government departments to help with auditing and verification, and will be in contact with departments to provide more detail soon.

7. If I apply for this initiative, can I apply for any other initiative the government has released?
Yes, organisations that apply may also be entitled to other government support such as the wage subsidy or other initiatives being provided to the media sector. For more information about support packages available please visit https://covid19.govt.nz/

8. What Government departments will be covered by the advance payments?
The advance payments  will be made in respect of advertising from  the 32 Government Departments and 4 departmental agencies as defined in Schedules 1 and 1A of the State Sector Act 1988, and 3 non-public service departments listed below:

Cancer Control Agency Crown Law Office Department of Conservation
Department of Corrections Department of Internal Affairs Department of the Prime Minister and Cabinet
Education Review Office Government Communications Security Bureau Inland Revenue Department
Land Information New Zealand Ministry for Culture and Heritage Ministry for Pacific Peoples
Ministry for Primary Industries Ministry for the Environment Ministry for Vulnerable Children, Oranga Tamariki
Ministry for Women Ministry of Business, Innovation and Employment Ministry of Defence
Ministry of Education Ministry of Foreign Affairs and Trade Ministry of Health
Ministry of Housing and Urban Development Ministry of Justice Ministry of Maori Development
Ministry of Social Development Ministry of Transport National Emergency Management Agency
New Zealand Customs Service New Zealand Security Intelligence Service Pike River Recovery Agency
Serious Fraud Office Social Wellbeing Agency State Services Commission
Statistics New Zealand Te Arawhiti The Treasury
New Zealand Police New Zealand Defence Force Parliamentary Counsel Office

9. I had government advertising placed, but the placement was made by an advertising agency on behalf of government. Is this still counted as revenue from government advertising?
Yes, please include this in your revenue reporting

10. I am an advertising agency that places media on behalf of government clients that are a part of this initiative. How will this affect how I invoice my government client for their media?
You will still invoice your government client for the value of the media they have booked and any administration fee you typically charge. This initiative will place the credit with the organisation that you have booked the media through and will be reconciled between them and the government.

11. I provide billboards and poster advertising. Sometimes my product is a government advertisement - am I eligible under this initiative?
No. To be eligible your business must be a ‘local media business’. For the purpose of this initiative a local media business is defined as:

  • A business that generates news or current affairs content that is focused on the New Zealand market (or a regional or local market in New Zealand);
  • A business that employs journalists in New Zealand;
  • A business that has an operational presence in New Zealand; and
  • A business that pays tax in New Zealand

12. When providing a breakdown of previous advertising revenue, which organisations do I include?
Applications received to date have shown that there is some confusion regarding which Government agencies are in scope for the purpose of the Advanced Advertising Initiative.

The Initiative funding will be based on revenue received either directly or through an advertising agency from one of the 39 government agencies listed on our FAQs. For full details please refer to https://ssc.govt.nz/our-work/state-sector-organisations/. Your application should include revenue from organisations in the first three categories on this page – Public Service Departments, Public Service Departmental Agencies and Non-Public Service departments in the State Services (i.e New Zealand Defence Force, New Zealand Police, Parliamentary Counsel Office). No revenue should be included from any other state sector organisations listed on this page.

For example – Ministry of Transport is a government department and is included in the scheme. The NZTA is a Crown entity and is not included in the scheme.

12. Once advanced payments have been used for advertising how does my media business reimburse MCH?

Media businesses will reimburse MCH once they receive payment for advertising, see below diagram.


Updated on 29th May 2020