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PM John Key - Source: ONE News -
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The Prime Minister is defending his decision to loan $43 million of taxpayer money to private media companies.
John Key claims the loan scheme was designed to help the whole radio industry.
But a ONE News investigation has revealed MediaWorks was the big winner after some hard lobbying.
Key is known for being media friendly, but he's facing criticism from Labour that he's become too cosy with MediaWorks which owns TV3 and half of New Zealand's radio stations.
It has been revealed the government deferred $43 million in radio licensing fees for MediaWorks after some serious lobbying.
Key and the former head of MediaWorks, Brent Impey, talked at a TV3 Telethon event.
"I just raised it as an issue but we'd been looking at it for sometime. My view was it made sense. It's a commercial loan, it's a secured contract," Key said.
It's believed the loan is being made at 11% interest.
But in answer to parliamentary written questions, the Prime Minister said he had "no meetings" with representatives of MediaWorks to discuss the deal.
Two days later that answer was corrected, saying he "ran into" Brent Impey at a "social event" in Auckland where the issue was "briefly raised" and he "passed his comments on" to the responsible minister.
Labour MP for Hutt South Trevor Mallard said he doesn't believe the Prime Minister with his first answer,
"I mean you have a meeting with a chief executive, it doesn't matter if it is social, he asks you for money, you get a system going, you remember it," said Mallard.
The government maintains that all radio companies were allowed to delay payments of radio licences and says it's not a sweetheart deal for MediaWorks.
But MediaWorks are the big winners. The total government loan for all nine radio stations is $43.6 million. Of that, MediaWorks were loaned $43.3 million and the other radio stations were loaned $300,000.
And official documents obtained by ONE News show a request was made to rush the deal through Cabinet for MediaWorks.
The documents said: "An urgent decision is necessary due to financial restructuring decisions facing MediaWorks at the end of October."
Key defends deferring the stations' licence payments.
"Frankly I'd rather see people paying over a longer period of time if it means they stay in business," said Key.
ONE News reported on Thursday night that the $43 million loan was made to MediaWorks despite official advice warning against it.
In the documents obtained by ONE News, the Ministry of Economic Development said it "does not see a strong case" for the loan, and warned the deal will "carry a financial risk" for the government.
Treasury said the loan would effectively see the government "acting as a bank" and taking on additional risk.
Initially Communication and Information Minister Steven Joyce had declined the deal. But then Impey had taken the matter higher, lobbying Key during the Telethon, and eventually Cabinet approval was given.
Joyce told ONE News in Thursday's report that the lobbying didn't have an impact on the government's decision.
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