Air New Zealand Haste Now Makes Waste

Tuesday, October 2 2001 Stephen Franks Press Releases -- Commerce

After months of dithering, the Government's desperation for an urgent end to the political embarrassment of Air New Zealand bungling, will cost tax payers potentially hundreds of millions of dollars extra says ACT's Commerce spokesman Stephen Franks.

"The Government is now determined to settle the position at all costs. The biggest outstanding issue is the potential liability for Ansett Australia debts. There is no point in putting any money into Air New Zealand if it could all just be sucked out to Australia.

"This means the wisest course now could be to stabilise Air New Zealand's operations, by offering a guarantee that tickets will be honoured come what may, and simply telling Australia, and BIL and Singapore, that there will be no government money for the company until Australian debts are known precisely.

"It is not in Australian interests to give us that certainty. While it hangs over Air New Zealand the company continues to bleed customers. It can't attract fresh capital. All of this helps Qantas. It also helps Australian politicians in the middle of an election campaign.

"So to get any Australian agreement to cap debts we will have to give something away, more than would otherwise be the eventual liability, if any. We had one bargaining chip ' the threat of statutory management, which could block the Australians getting anything much at all.

"But Helen Clark set fire to our negotiating strength with Australia when she effectively ruled out statutory management, telling small shareholders she would see them right.

"Michael Cullen has confirmed that Air New Zealand is cash flow positive. No panicky settlement is needed other than to end the political nightmare for Labour. Statutory management was a sensible solution to keeping the planes flying and staff employed while we stared down the Aussies (and the big shareholders). Now it is ruled out we can expect the Government to do a grossly over-generous deal.

"Under no circumstances should the New Zealand taxpayer be bailing out Australian unionists, and international investors, but that is what the bungling seems likely to lead to.

"Australian politicians feel they owe us no favours. For example we have reneged on defence commitments, and the common immigration approach. Even when we agreed to help Prime Minister Howard out of a jam by taking Afghan refugees, we spoiled it by taking a holier than thou attitude to Australian actions," Stephen Franks said.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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