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Bailout Now Costs Over 1 Billion

David Carter
National Associate Finance Spokesperson

27 November 2001

BAILOUT NOW COSTS OVER 1 BILLION

The Government bailout of Air New Zealand is now costing taxpayers over 1 billion dollars and there is no guarantee that's where it will end, according to National's Associate Finance spokesperson David Carter.

This follows today's announcement that the Government is paying an average of 26c per share and that it is coughing up a further $150 million into the recapitalisation programme.

"The public of New Zealand quite rightfully are wanting to know why the Government wants to play airline investor when the health and education sectors, the core functions of government, are in such a shambles," says Mr Carter.

"Only just a month ago Dr Cullen was reported as saying that 'there is no reason to believe that any more money will be required', and that the original $885 million would be 'at or very near requirements.'

"Clearly it wasn't even remotely near requirements. We should not forget also that the Government had no choice but to set the share level at around 24c to protect the Prime Minister who is still under investigation for her inappropriate comments.

"What we have here is a Government way out of its depth in matters of economic management. They are not business people - they have demonstrated this throughout the entire Air New Zealand saga.

"Their dithering early on resulted in a private sector bailout collapsing that ended up costing hardworking taxpayers an initial $885 million, with the bill still climbing.

"So what we have here is Air New Zealand with a billion dollars of taxpayer money in the bank and our teachers, nurses and radiotherapists being told there is no money for them.

"With such a poor track record in understanding business, it is certainly no wonder that the Government is having so much trouble trying to find someone willing to chair Air New Zealand," says Mr Carter.

Ends


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