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ACT Leader Richard Prebble said the Government should, as shareholder of Air New Zealand, abandon the Qantas merger immediately.
"This whole scheme demonstrates the dangers of the Government owning transport companies.
"Nobody believes that ministers would have supported the Air New Zealand/Qantas deal but for the fact that the Government as a shareholder got its priorities confused.
"It's the Government's task to put the interests of New Zealand first and not its interests as a shareholder.
"I predict that the Government will also get its priorities muddled once it becomes a shareholder in Tranz Rail," Mr Prebble said.