GOVT. ACTION ON S.P.A.N.Z.

Press, Volume CII, Issue 30259, 11 October 1963, Page 17

GOVT. ACTION ON S.P.A.N.Z.

Influence On Share Market Alleged (From Out Parliamentary Reporter) WELLINGTON, October 10. The Government tonight denied Opposition charges that its handling of the proposals on the future of South Pacific Airlines of New Zealand had influenced the share market.

The allegation was made during the adjournment debate in Parliament that the Government had allowed members to be placed in a position that could stimulate activity on the share market.

Mr R. J. Tizard (Op., Otahuhu) said he was very concerned at the way discussions on the possibility of assisting (S.P.A.N.Z.) had been held in the Government caucus at a time trading in the company’s shares on the stock exchange was still possible. Discussion should have been held and a decision made before that, he said.

Mr Tizard quoted prices wanted by sellers on the Auckland exchange. from September 19 on, without recorded sales, and die position in Wellington on October 8 when it was announced SP.AN.Z. was appealing to the Prime Minister.

Sellers’ quotes had jumped to 3s 2d (5s shares) and buyers entered offering Is. That was evidence a speculative element was about. It was wrong for a Government to put its members in a position where there might be suspicion information could be leaked to outside. The Deputy Prime Minister (Mr Marshall) said the variations in share prices

might have taken place, but he had not followed them himself. “If they have, that is the assessment people have made. Certainly there are many people who are interested. including the staff of the company. “Weil Known” “These circumstances are well known. How can it be suggested that the Government has failed in any way in its duty?” he asked. Mr Tizard had said that a lot of people did not know what was involved, said Mr Marshall “I would include the member for Otahuhu among them,” he said. "This is a most irresponsible debate for an Opposition to initiate. If anything were calculated to shake people’s confidence or upset the share market, this debate would surely do it.’’ The Government was entitled to have discussions and make decisions it thought fit I in the interests of the coun- * try, the people the airline served, and the company, he said.

“The Government has marie no decision. Anything that may have been saiid is surmise. It is uninformed guessing. The Government cannot be charged with influencing investment. “From what the company itself said in public statements, it is known that it

has made certain proposals to the Government Such propositions cannot be disclosed and the Government has marie no decision,” he said. Mr A. J. Faulkner (Opp.. Roskiill) said the Opposition objected to matters of this nature being discussed beyond the members of the Cabinet.

The Government was subsidising a substantially Aus-tralian-owned private airline, from the public purse, in order to allow it to compete with a publicly-owned airline. ‘ ‘ Breached Position.”

He said the Prime Minister (Mr Holyoake) had breached his position as trustee of the nation's assets and now consideration was being given to extending this “very wrong principle.” Mr J. Mathison (Opp., Avon) said he wanted to remind Mr Shand that N.A.C. was prepared to run from Nelson to Christchurch but were stopped on the instructions of his fellow Minister.

Labour policy had, always been to encourage private enterprise in aviation. The two caotains who had started S.P.A.N.Z. had said it would run feeder services into N.A.C. main routes. Had S.P.A.N.Z. stuck to that, Labour would have been prepared to subsidise it. But it would not subsidise an airline that had 49 per cent Australian interest and competed with a State-owned airline. He recommended the Government to buy out the Australian interest in S.P.A.N.Z. and retain it on feeder services integrated under the aegis of N.A.C. The Ansett group was much too ambitious to accept a subsidy or a feeder service, he said. The Minister of Labour (Mr Shand) said the Opposition had started with charges against the Government, and was now attacking S.P.A.N.Z. Was the Opposition apposed to the Government assisting a small airline? He said that S.P.A.N.Z. was valuable to New Zealand because it had attempted to give a service to small towns which did not have one. Mr S. A. Whitehead (Opp., Nelson): Like Nelson? Mr Shand said the NelsonChristchurch service was one. “I don’t care about the member for Nelson butting in,” Mr Shand said. “I was Minister of Civil Aviation when some of these negotiations took place, and I know that N.A.C. was not prepared to put a service on for Nelson.” He said that the servicing of small centres was difficult, and he was not surprised that the company had run into difficulties. The Government had postponed, not remitted, airport dues. It must be remembered that N.A.C. had operated 10 or 12 years without paying those dues, which were a comparatively new charge.