More than 100 jobs are under threat with the closure of the government-owned company that publishes the School Journal.



Learning Media has produced the reading tool - familiar to generations of Kiwis - and other education resources for the last 79 years. It employs 109 staff, including editors, designers, project managers and software programmers.

Many now-famous New Zealand authors, including Margaret Mahy and Witi Ihimaera, have contributed to the School Journal.

The Government is winding up the firm because annual revenue has fallen by a quarter.



Finance Minister Bill English and Education Minister Hekia Parata announced the decision this morning, saying it is not "financially viable".

A statement from Learning Media chair Jenn Bestwick confirmed the board agreed with ministers that "the company does not have a viable on-going business".

English told reporters the company could not recover after it lost a contract guaranteeing a monopoly on Education Ministry publishing last year.

The firm was getting to the stage where it could not pay staff, he said.



"There just isn't a way for this company to dig its self out of the hole it's in ... even when it had a monopoly contract," he said.



Learning Media assets will now be sold off, but English declined to place a value on these.



The Government is reviewing the performance of all small government-owned companies.



"There are companies there like any other companies out in the market place who have struggled over recent years. And some of them will find a way to come right.

"Some of them may continue to struggle and we will have to make decisions around how to deal with those companies, but that is a few months ahead of us yet," English said.

Larger state-owned enterprises like NZ Post and TVNZ would not be sold off, he said.

The Public Service Association said the Government should have bailed out Learning Media by putting it back into the Ministry of Education.

Making the company compete for public service contracts "tilted the focus away from producing quality educational material", national secretary Brenda Pilott said.



"It's frustrating that the Government has chosen to stand back and watch Learning Media fail."



Parata said a contract ensured the School Journal's survival for now. She would not say how long that contract lasts.



"I'm saying that the role of education is to constantly assess whether the resources we have are meeting the educational needs. The Journal has been able to do that for quite a long period of time and I expect it will into the future. But we review everything."

Bestwick blamed challenging market conditions.

"Declining revenues in traditional publishing have undermined the company's profitability and despite strategies to diversify into digital publishing and to develop products for other sectors and markets, the company has not been able to maintain a viable business," she said.

The School Journal will still be available to schools.

Deputy Secretary for Education Andrew Hampton said schools will not be affected as they will still receive all publications and be able to access online resources.

The Ministry wanted the "critical expertise" of Learning Media staff to continue to be available to the education sector, he said.

"In particular, we want to make sure Maori Medium capability remains available, along with expertise in Pasifika culture and language."



The Green party says the Government's obsession with cost-cutting had killed off the company.

"This is a tragedy for New Zealand education. This is a tragedy for generations of Kiwis who have grown up reading the school journal," MP Catherine Delahunty said.



Learning Media was created in 1939, when the School Publications Branch in the Department of Education was formed. It became a Crown Company in 1993 and a State Owned Enterprise in 2005.