Prime Minister Helen Clark has put cronyism ahead of the interests of New Zealand Post, National's Finance spokesman Bill English said today.

"A phone call from Helen Clark, instructing her Ministers to save Ross Armstrong's skin, was the only thing which has kept him in his job.

"State Owned Enterprises Minister Mark Burton vowed he would deliver a solution which was both 'credible and durable'. Today's announcement, that the two warring factions have decided to kiss and make up, is a complete sham. It is not credible and it will not last.

"Dr Armstrong's behaviour - which ranged from autocratic to underhanded - resulted in him losing the confidence of his board. The best thing which could have happened for the taxpayer-owned New Zealand Post would have been his departure.

"But the Government has no idea how to run a business. Instead of taking the tough decision, the Government used the threat of dismissal to force the two warring factions into a shotgun wedding. The board members have been pressured, on the direct instructions of Helen Clark, to pretend everything's now hunky-dory.

"Dr Armstrong will be grateful for his friends in high places.

"This sham reconciliation between the board and its estranged Chairman will cost New Zealand Post. The flagship SOE is being torn in different directions, just when it needs to focus on its fragile mail business and the risky People's Bank.

"Today's announcement is a disgraceful display of cronyism by the Prime Minister. Ross Armstrong should have either resigned or been fired. As it is, the Government has abandoned sound business management in order to protect Helen's Little Helper," Bill English said.

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