KEY POINTS:
The Government has no plans to increase the $10 million of taxpayer money it has so far provided to keep Team New Zealand afloat.
Associate Finance Minister Trevor Mallard, who has responsibility for Cup issues, said the postponement of the next America's Cup, possibly until 2010 or 2011, wouldn't force the Government to up its contribution.
America's Cup Management, the body set up to run the event, announced yesterday that the regatta would not run in 2009 as originally planned.
Mallard said the Government had been kept fully briefed about the likelihood of a delay and he had "full confidence" in team boss Grant Dalton's planning.
He had no doubts about TNZ's future viability and the delay wouldn't affect the syndicate's future Government funding.
"A delay will not negatively impact on the returns on the Government's investment as the buildup in New Zealand will still take place," Mallard said.
The tax returns from that buildup would offset a large chuck of the Government's contribution, he said.
During the last campaign the Government contributed $33.75 million to TNZ coffers, of which more than $22m was directly recovered through taxes.
Following TNZ's 5-2 defeat by Alinghi in July, Mallard announced that $10 million would be made available "to contract vital team members while negotiations occur around details of commercial sponsorship".
However TNZ, which relies heavily on sponsorship income, now finds itself with no event to market to potential backers.
Yachting expert Peter Lester described the situation as TNZ's "worst nightmare".
Lester said Dalton would "come under increasing pressure" to preserve the team's assets as the protracted legal battle over the next regatta's rules between holders Alinghi and BMW Oracle rumbled on.
Dalton, however, insisted the syndicate could stand pat for the foreseeable future.
"[The delay] was one of many possibilities we considered in our planning processes and have made preparations to ensure the team's viability," Dalton said.
"The team will continue to operate as it has since we returned to New Zealand in July.
"[We] will come together once there is some certainty in the dates and the shape of the 33rd America's Cup is clear. We will work through the detail of all the issues over the next few weeks."
The Herald understands key syndicate members will remain on salaried retainers until the details for the next regatta are finalised.
TNZ's major sponsor Emirates could not be reached for comment last night. Another major sponsor, Toyota New Zealand, referred all inquiries to Team New Zealand.
The Government's total contribution to the current campaign was "subject to ongoing negotiations" but the delay wouldn't harm the overall return on its investment, Mallard said.
