Throughout the year, there is bound to be much gnashing of teeth as government-funded organisations are told to cut costs because of the tough economic environment. Last week, Radio New Zealand provided a foretaste after being told by Broadcasting Minister Jonathan Coleman that it could not expect any new funding in the foreseeable future.

Immediately, questions were asked about how it could continue to provide a high-quality service. At a fraught commerce select committee hearing, the chief executive, Peter Cavanagh, said that "undoubtedly as resources become tighter and tighter, inevitably there will be some degradation of quality".

Radio NZ has been told by the minister to come up with ways to trim expenditure and raise more revenue under its own steam. Among the options being floated are going off air from midnight to 6am, seeking commercial sponsorship for Concert FM, shifting back to an AM frequency, except in Auckland, which would save $750,000, and scrapping its $200,000 advertising budget.

Already, it has decided not to send a representative to the Commonwealth Games in India. The striking feature of such steps is the small sums that would be saved.

Indeed, Radio NZ's budget last year was just $38.2 million, of which $34.2 million was public money. That points to the swingeing nature of the Government's programme. While it is reasonable that all state-funded bodies should tighten their belts, it seems excessive to be waving a big stick at organisations where the potential savings are trifling.

The same penchant was, however, evident in last year's Budget. Most controversially, cuts were made to adult night school programmes.

Again, the savings seemed hardly worth the trouble. Community education takes just 0.6 per cent of the tertiary education allocation, and the canned programmes provided value for money, if only because they gave hands-on instruction at schools that would, otherwise, not have been in use.

But the Government showed less resolve over country schools that were planned for closure because of their declining rolls. The savings could have been reasonably substantial, but when protests were mounted, the Education Minister quickly backed down.

A similar lack of focus and fortitude characterises the Government's cost-cutting drive in broadcasting. While keen to extract small change from Radio NZ, it lacks the boldness to extract major savings from its cousin, Television New Zealand. Cuts to staffing and suchlike are being made, but the Government has said nothing about the windfall that would arise from, for example, the sale of TV2.

Radio NZ board chairwoman Christine Grice has played down any talk of friction between her board and the minister, and has been making brave sounds about the public broadcaster living within its means. She told the select committee she was confident of meeting Government expectations without compromising standards.

More telling, however, is a 2007 report that found Radio NZ was 27 per cent underfunded and operating efficiently, but with no significant opportunities to redeploy resources more effectively or increase third-party revenue. It could not, in other words, make any more savings without damaging the quality of its service.

That, and logic, support Mr Cavanagh's pessimistic assumption. The quality of Radio NZ's service will be compromised for a minor monetary gain at a time when the broadcaster says audiences are at an all-time high. In other areas, substantial money could be saved without the public noticing very much difference at all. But that would require a far greater show of Government resolve.