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Newsflash: Government Ditches F-16 Deal

The Prime Minster has announced the Government would proceed with its plans to terminate the F-16 deal saying spending on the air-force was not an important priority for New Zealand defence.

Helen Clark said the decision had been taken after a thorough consideration of the report commissioned from Derek Quigley.

National today released details of the Quigley report which recommends continuing with the F-16 contract but leasing less than the original 28.

Miss Clark thanked Mr Quigley for his report but said the Government judged the overall “capital expediture requirements” for the defence force were currently “unsustainable.”

While she admitted the offer from the United States was a good one, she said spending money on the on F-16s would only be justified if it was a priority, and the defence forces other priorities were also affordable.

“Unfortunately neither of those assumptions could be sustained” she said.

Meanwhile, opposition leader Jenny Shipley said the Quigley report had identified the key issue - that cancelling the contract would either commit New Zealand to a higher replacement cost further down the track ,or mean the end of the country's air strike capability.

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