State-owned unit behind long-running school publication to be wound down.
Prime Minister John Key said yesterday that the School Journal would continue despite the decision to close the state-owned enterprise that produced it, Learning Media.
"There are still some very important parts of the business like the School Journal and that will be maintained," Mr Key said yesterday after Finance Minister Bill English and Education Minister Hekia Parata announced it would be wound down over several months.
Opposition parties say the decision to open up its traditional business to competition killed it off.
The company employs just over 100 people. It had its genesis as the School Publications branch of the old Department of Education and has struggled financially for many years.
Mr English said the company had been bailed out before by the Government, even when it had a monopoly contract.
But since losing an exclusive contract in 2011 to supply the Ministry of Education, its revenue had fallen by about 25 per cent and it was going to have difficulty paying staff.
"It has worked to restructure its operations and broaden its business strategy to adapt to this new environment, but unfortunately it has not been sufficient to ensure its long-term survival."
He said all staff entitlements would be met. The Government was in negotiation with creditors.
Mr English said: "In some cases, the taxpayer would have got better value if the businesses had been sold to someone else who may have been better able to manage it, but the Government policy has been 'no sales'."
In the last financial year, the company posted a net after-tax loss of $865,000, and the year before that an after-tax profit of $600,000.
The School Journal
First published in 1907, the School Journal was important in reflecting the New Zealand identity to its children. It provided illustrated stories about New Zealand for children aged from 7 to 13. Its staff and contributors have included Margaret Mahy, Joy Cowley, Patricia Grace, James K. Baxter, Roger Hall, Denis Glover, Jack Lasenby and Gavin Bishop.