Skyhawks sale earns Government $120m

The Government will get $120 million for the sale of the Air Force's mothballed Skyhawk and Aermacchi jets, but the amount the firm that clinched the deal gets as a commission remains unknown.

Defence Minister Mark Burton has revealed about $35 million will be spent preparing the 34 jets, which were decommissioned in 2001 after Labour disbanded the air combat wing, ready for use by the American firm Tactical Air Services.

The $35 million includes the cost of storage, shipping, regenerating and the fee for accountancy firm Ernst & Young, which was contracted to sell the aircraft.

Blenheim company Safe Air has the contract to prepare the jets.

Mr Burton said the commission Ernst & Young would get was "comparable to what a real estate gets when they sell a house", but did not give an exact percentage.

The accounting firm has already been paid $400,000 as an initial fee for trying to sell the planes, and about $700,000 in disbursements over the past four years.

National defence spokesman John Carter said he wanted to know how much taxpayer money Labour would pay Ernst & Young in the form of a bonus.

"It has taken Ernst and Young more than four years to sell these aircraft, during which time storage costs have totalled nearly $7 million, so I would expect any bonus would reflect that."

Mr Carter called on Labour to release all the papers on the deal.

"Quite apart from the huge cost of this whole sad episode, Labour is responsible for wrecking a once-proud Air Force and forcing our highly trained pilots and engineers overseas," he said.

Mr Burton defended the sale of the jets saying it was an "essential decision".

"We were faced with a Defence Force that had been run down right through the 1990s across all three services. The fact is that of all of the capabilities in question, the air-strike capability had never been used in an operational deployment. I think it was the right decision."

The Skyhawks had been flown since 1970; the design dates from the 1950s.