$1m spent - but air force jet sales stalled

The Government has paid accountancy firm Ernst & Young more than $1 million to sell decommissioned Defence Force aircraft - with still no outcome, MPs were told yesterday.

The mothballed Skyhawks and Aermacchi jets - 17 of each - have cost about $8 million to maintain and store, with costs rising by about $320,000 a month.

National MP John Carter said in Parliament yesterday that Ernst & Young had received $677,145 in disbursements, as well as an initial $400,000 payment.

On top of that, it was to receive a bonus payment with no result yet of sales, Mr Carter said.

Defence Minister Mark Burton said he was satisfied Ernst & Young was "working solidly on this process, and the test will be the outcome".

The Air Force is understood to have one "serious" potential buyer and two backup buyers for the Skyhawks.

The deal has to be approved by the United States State Department because some of the equipment on the Skyhawks is similar to that on the F16 fighter.

Malaysia is understood to be the approved buyer for the Aermacchis - but that deal has also yet to be finalised.

- NZPA