New Zealand received an unplanned bonus from cancelling National's ad hoc and ill-timed decision to buy new fighter jets for the airforce, the Minister of Defence Mark Burton revealed today.

"ACT MP Owen Jennings asked in a written question what was the total cost of cancelling the F-16 fighter contract.

"I have reminded Mr Jennings that the US Government imposed no cancellation costs. New Zealand was only required to meet the US Government's costs incurred up until the time of cancellation and payments due under the lease agreement for a period of six months.

"These costs were more than offset by the impact of exchange rate changes.

"When funds forwarded to the USA were returned to New Zealand, a net gain of $4.779 million was realised.

"New Zealand is fortunate that it elected a Government in 1999 which recognised that the F-16 arrangement did not fit into any sensible long term defence strategy. That New Zealand was able to show a small profit in extracting itself from the deal is a bonus.

"But I won't be holding my breath for congratulations from Mr Jennings or his colleagues," Mark Burton said.

NB. See Question for Written Answer 5463.

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