MPs row over Ansett losses

By JOHN ROUGHAN

Opposition parties mounted a concerted attack on the Government's handling of the Air New Zealand crisis yesterday, claiming that the cabinet had known of Ansett's huge losses for weeks.

Act leader Richard Prebble claimed in Parliament that "a prominent New Zealand business leader" had contacted Prime Minister Helen Clark two months ago on behalf of Air New Zealand directors, and had told her Ansett was losing a million dollars a day.

She was told that Singapore was prepared to refinance the airline and that the situation was urgent, Mr Prebble said.

He claimed the Prime Minister told the caller that the Government was not ready to act "because this Government wanted to see Air New Zealand let Ansett go".

Acting Finance Minister Trevor Mallard replied: "I totally reject that."

The caller had indicated there were "significant operating losses", but the first time the Prime Minister had heard a figure of more than $1 million was when she read newspaper reports of speculation by Sir Richard Branson last week.

National's Belinda Vernon asked: "When Air New Zealand tabled its formal offer to the Government [on July 6] to increase Singapore Airlines' shareholding did it disclose losing $1.2 million a day in the Ansett operation?"

Mr Mallard: "No."

Ms Vernon: "What is the difference between the amount of Ansett losses disclosed to the Government in July and the $1.3 million a day disclosed by Air New Zealand last week?"

Mr Mallard, holding in his hand Singapore Airlines' July 6 application for the raising of the foreign ownership cap, said he had just reviewed the papers "and they do not use that figure".

Mr Prebble: "Is the minister prepared to reflect on his answers, given that the directors of Air New Zealand say that the losses revealed this week were known over two months ago, and the businessman who had the conversation with the Prime Minister states categorically he told her what the situation was?"

Mr Mallard: "Can I make it quite clear that the owners - the people who were proposing to increase their shareholding in the company - became aware of the financial situation of this company very recently.

"They had not done due diligence."

Opposition leader Jenny Shipley: "Can I ask the minister to carefully review the material and tell the House whether on either June 27 or July 12 any of the material the Government received included a figure of $444 million annualised loss, which is $1.2 million a day?"

Mr Mallard: "I have reviewed the application material received by the Government, and the figure the member mentions is not part of that material."

Mrs Shipley: "Has any action or lack of action by the Government contributed to the problems facing Air New Zealand and Ansett?"

Mr Mallard: "No. To the contrary. If the Government had not provided the constructive assistance it has done, the position of both Air New Zealand and Ansett would be considerably worse."

Mrs Shipley: "Did the Government's 'intransigence and dithering' cause Air New Zealand's A shares to drop from $1.94 in March 2000, when the Government was first approached by Singapore Airlines and Air NZ, to $1.09 when the Government was subsequently approached in late June, to an 76c now?

"Does she accept any responsibility for writing off the wealth of New Zealanders due to her Government's incompetence?

Mr Mallard: "As the Leader of the Opposition is aware, the decision was not for the Government alone. It required the consent of Air NZ's shareholders, Singapore Airlines and Brierley Investments Ltd and the Australian Government.

"None of them had given their consent before events overtook the proposal."

Deputy Prime Minister Jim Anderton weighed in: "Has the minister seen the comments of the acting chairman of Air NZ, Mr Farmer, that due diligence conducted before the purchase of Ansett was so limited it was practically worthless?"

Mr Mallard had seen the comments and said: "This Government, when it makes important decisions, does not do them in backrooms on informal approaches from their mates as Jenny Shipley and her hopeless team used to."

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